Cuomo rips AG’s handling of JPMorgan settlement money

February 03, 2014 01:43PM

New York Attorney General Eric Schneiderman’s move to dole out at his own discretion the Empire State’s portion of a $13 billion settlement with JPMorgan Chase has sparked criticism from the governor.

Schneiderman has called for 85 percent of the state’s $613 million, the share allotted in a federal settlement involving mortgage-backed securities, to be administered at his guidance to nonprofit housing groups around the state. But Governor Andrew Cuomo, who preceded Schneiderman as AG, says the funds should go through the state government’s housing programs’ usual appropriation process.

“I thought the attorney general was operating on behalf of the state, and here the attorney general’s operating on behalf of the attorney general,” Cuomo told the Crain’s editorial board. “The attorney general is bringing a case and settling a case, and his office is somehow the beneficiary of the case.”

Schneiderman shot back by pointing to a lawsuit Cuomo brought as AG back in 2009, alleging rate collusion by UnitedHealth Group and other health insurance agencies. The $90 million settlement, Schneiderman said, was funneled through a nonprofit Cuomo set in place with Syracuse University.

The JPMorgan settlement deal is positive for New York homeowners, a spokesperson for Schneiderman told Crain’s.

“Attorney General Schneiderman decided to allocate $81.5 million of the $613 million recovered from JPMorgan Chase to state programs that provide relief to homeowners,” Scheiderman’s spokesperson told Crain’s. “The attorney general looks forward to allocating funds from this historic settlement in an open and transparent way to help as many New York families as possible.” [Crain’s]Julie Strickland