Republican lawmakers are questioning the structure of an $850 million settlement between the state of Minnesota and 3M Co. that leaves them out of how the money is spent.
3M agreed to pay the money last month, resolving a massive lawsuit alleging damages to natural resources and groundwater in the Twin Cities’ east metro. State agencies will use the money to improve and safeguard drinking water.
House Republicans argued Monday that the settlement was designed to prevent the Legislature from having a say in how those funds are used. State Rep. Jim Knoblach of St. Cloud said new legislation may be needed to “make sure the money goes to the people it needs to go to.”
State Rep. Sarah Anderson, R-Plymouth, said she shares other lawmakers’ concerns that the settlement money “we have left isn’t consumed by bureaucracy and it actually goes out to people in the east metro who’ve been impacted by this.”
The state initially sought $5 billion from Maplewood-based 3M, alleging that chemicals used to make Scotchgard and other products seeped into the groundwater.
The 11-page agreement between the state and 3M makes clear the “grant” from 3M won’t go to Minnesota’s general fund, but will stay in a remediation fund managed by state agencies and overseen by Hennepin County District Court.
Ben Wogsland, a spokesman for state Attorney General Lori Swanson, said the Minnesota Pollution Control Agency and Department of Natural Resources will set priorities for ensuring safe drinking water in the east-metro area and enhancing natural resources in the region.
THE IMPACT OF EARLIER TOBACCO DEAL
When the settlement was announced in February, Swanson noted it was designed so that the money would specifically target clean-water efforts in the east metro. A working group was being established to determine how the money would be spent.
“Minnesota learned a lesson from the tobacco trial, where the settlement money never compensated the victims. Instead, much of the money was sidetracked by the legislature to sell bonds to balance the budget. In this case, the money is being used to address some of the problems created by PFCs in our drinking water,” Swanson said in a statement then.
In 2011, the state borrowed hundreds of millions of dollars against money from the 1998 tobacco settlement to close a budget gap. Critics then said it was diverting money away from intended programs.
GOP LAWMAKERS ALSO CITE CONSTITUTION
Republican state Reps. Pat Garofalo of Farmington and Steve Drazkowski of Mazeppa said the state constitution requires legislators to appropriate all money the state spends, yet the court-authorized settlement locks out the Legislature.
“I think we need to take a much deeper exploration,” Drazkowski said. “This does not seem to be consistent with our constitution.”
HOW MUCH WILL STATE’S ATTORNEYS GET PAID?
Private attorneys hired by Swanson’s office will receive $125 million of the settlement.
Anderson wondered why a private law firm is being paid what amounts to $48,000 a day to represent the state in the matter since 2010.
Barbara Naramore of the Pollution Control Agency said the law firm, which received 15 percent of the settlement, would not have been paid if the money hadn’t been awarded.
State Rep. Debra Hilstrom, D-Brooklyn Center, said it was a big case, with more than 27 million pages of documents involved. The case included more than 100 court hearings.
Minnesota also hired outside attorneys to handle the 1990s lawsuit against big tobacco companies.