Florida refuses to return tobacco settlement money
without court authorization
Copyright © 1998 Nando.net
Copyright © 1998 The Associated
- WEST PALM BEACH, Fla. (May 22, 1998 02:20 a.m.
EDT http://www.nando.net) -- Cigarette makers have
asked a judge to order the state of Florida to return $149 million turned
over without court authorization by a bank holding tobacco settlement
- The state has refused to give back the money it demanded earlier this
week from NationsBank -- a move some are calling unconstitutional.
- All the money paid so far as part of the state's $11 billion deal
with the tobacco industry has been held in court-supervised escrow
accounts while appeals are exhausted.
- The escrow agreement said no money could be released without
permission from Circuit Judge Harold Cohen, who has allowed the state to
spend about half of the $750 million the industry has paid so far.
- But lawmakers grew tired of waiting for all the money, so they
passed a bill ordering Comptroller Bob Milligan to get $149 million from
NationsBank. Gov. Lawton Chiles signed it into law a week ago, and on
Tuesday, the bank gave the state the money.
- But Wednesday, the bank apparently realized it should not have
released the money without Cohen's approval and demanded the state return
it by 9 a.m. Thursday or face legal action.
- The state refused -- angering the private attorneys who represented
the state in its lawsuit against the industry and are now fighting the
government over legal fees.
- "Our government absolutely, willfully, intentionally and unlawfully
expropriated this money," attorney W.C. Gentry said. "The bank obviously
stupidly and ignorantly turned it over. Now they're frantically trying to
get it back."
- Steve Yerrid, another private attorney who represented the state,
filed a motion saying the state should be held in contempt of court. Jim
Beasley, an attorney representing three of the state's private lawyers,
called the state's action "blatantly unconstitutional."
- But state Sen. Pat Thomas, a Democrat who sponsored the bill to
seize the money, insisted that lawmakers are on firm legal ground.
- "We did not do it without full recognition there might be a
problem," he said. "But we did not do it without full legal counsel."
- NationsBank spokesman Jerri Franz said Thursday the bank wants to
resolve the issue to everyone's satisfaction.
- Some of the private attorneys want to be paid under their 25 percent
contingency fee contract. But the settlement, reached in August, called
for the fees to be determined by arbitration.
- Cohen recently ordered the state and the tobacco industry to put up
$50 million each for the attorneys until a final fee is determined. The
state has refused to comply, maintaining that none of the settlement funds
should be used to pay its own attorneys.
- Last week, Cohen said he thought the new law was unconstitutional
and ordered $187.5 million -- 25 percent of the money paid so far by
tobacco -- out of the NationsBank account and into the court registry to
protect it from legislative appropriation.
- By KAREN TESTA, Associated Press Writer
- Copyright © 1998 Nando.net
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