Where credit is due

Nevada Attorney General Adam Laxalt this week announced he had “allocated” $1.2 million to the University of Nevada Medical School for an OB/GYN program.

However, state law prohibits him from doing so.

Nevada Assembly budget chief Maggie Carlton said she started getting calls after Laxalt’s announcement, and she has asked legislative staffers to start checking it out. Senate budget vice chair David Parks is making similar inquiries.

“I got calls from people wanting to know what is going on,” Carlton said.

The Nevada Constitution reads, at article 4, section 19, “No money shall be drawn from the treasury but in consequence of appropriations made by law.”

In The Nevada Constitution/A Reference Guide, Michael Bowers wrote, “The government of Nevada is precluded by the terms of this section from spending money that has not been appropriated by the legislature. In this regard, the legislature has virtual plenary [comprehensive] power.”

The attorney general’s office itself found in a formal April 28, 1920 legal opinion issued by A.G. Leonard Fowler, “Public moneys may only be disbursed pursuant to a valid appropriation of the Legislature. This is elementary.”

In a statement this week, Laxalt said, “The funding is part of $3.8 million that UNR Med will receive over five years, resulting from a settlement between Pfizer pharmaceutical company and the State of Nevada. The settlement resolved claims that Pfizer had unlawfully promoted certain postmenopausal hormone therapy medications.”

Former state attorneys general said lawsuit settlements normally go into the state general fund and are later appropriated to state programs and agencies by the Nevada Legislature.

Laxalt may be piggybacking on an old case settled by his predecessor. Surprisingly, while the Laxalt announcement attracted wide news coverage, no journalist raised the question of why a state attorney general was disbursing funds to state agencies.

While state officials like Laxalt can recommend such spending of settlements, Carlton said, “Usually they go through the board of examiners and then come through us.”

Some state legislators were upset by Laxalt’s announcement because they feel it puts them in a difficult position if they have to approve or disapprove funding he has already promised.

“This is the typical M-O for this particular office, which is it’s better to ask for forgiveness than permission,” Carlton said.

Carlton’s budget committee navigated a dispute with Laxalt during this year’s legislature over a request by gambling regulators that they be allowed to hire independent counsel because they had lost confidence in Laxalt.

Former Nevada attorneys general Richard Bryan and Frankie Sue Del Papa both said lawsuit settlement funds are normally appropriated by the Nevada Legislature, but that some settlements may contain language that affects the distribution. We asked Laxalt’s office for a copy of the Pfizer settlement document, but it was not supplied.

“I don’t ever recall the issue coming up [of the attorney general allocating funds], but my impression is that it would go to the general fund for disbursement by the legislators,” Bryan said.

He said one instance where money might not go to the general fund would be “a recovery under a provision of federal law enforced by the state where the money recovered would go to the victims.” That does not apply to this case.

Even if there were a stipulation in the lawsuit settlement that the money be used in a certain way, the Nevada Legislature would still have authority to use the funds how it saw fit. Otherwise, attorneys general could use settlements to set public policies or create programs that are the province of the legislature. Asked if a lawsuit settlement agreement can override the Nevada Constitution, Carlton said, “No, it can’t.”

In the best known state lawsuit settlement, the tobacco companies provide millions of dollars in payments over many years. But although state attorneys general and journalists tried to create the impression that the states were legally required to spend the money on health care or tobacco prevention programs, in fact the settlement contained no such provision. Nevada’s version of the agreement said the uses for the money was to be “determined by the governor and the Legislature through the normal appropriation process.”

There was an expression of opinion inserted that the money be used for health care, but that was non-binding. Even it upset some legislators who considered it an intrusion. In the end, the tobacco settlement funds were used approximately 60 percent for health-related needs and 40 percent for Millennium Scholarships. And the decision was made by the Legislature.

One of the things Carlton is having researched is whether the Pfizer case is a new settlement or an old case she recalls dating back to 2014 that was negotiated by Laxalt’s predecessor. We located a 2014 press release issued by Catherine Cortez Masto, then state attorney general, in which she said a case had been settled with Pfizer in which the corporation “agreed to make an $8 million donation that will go towards the University of Nevada School of Medicine and the University Medical Center to fund Nevada health care programs affecting women’s health issues.”

If the case turns out to be the same lawsuit that was negotiated by Cortez Masto in 2014, legislators have had two opportunities—at the 2015 and 2017 legislatures—to approve the Pfizer funding either for the medical school program or for other uses, which means the appropriation of funds to the medical school was legislative, not executive, though Laxalt’s news release this week took credit for it: “Today, Nevada Attorney General Adam Paul Laxalt announced the allocation of $1.2 million to the University of Nevada, Reno School of Medicine (UNR Med) to create a new OB/GYN department based in Reno with UNR Med community and hospital partners.” Cortez Masto did not attend Laxalt’s announcement.

If Laxalt’s announcement concerned Cortez Masto’s case, there was no immediate explanation for the difference in dollar amounts between the two, although the legislature may have made adjustments.

The 2014 Pfizer case was prosecuted by Cortez Masto’s deputies, Kristine Kuzemka and Sheri Ann Forbes.