The attorney general's budget in Nebraska dropped dramatically in 1991, shortly after Republican Don Stenberg took control of the office. But state taxpayers didn't save a dime.
Instead, the costs of an expensive water lawsuit were transferred out of Stenberg's budget to another state agency.
It was the first of several such transfers during Stenberg's tenure that allowed him to keep his budget relatively low and stable, something he now uses to criticize Jon Bruning, his successor and opponent for the GOP U.S. Senate nomination, for doubling the agency's bottom line.
When Bruning came to office, then-Gov. Mike Johanns asked him to take back the lawsuits that had been farmed out to other agencies. Bruning did so, and now his budget rises and falls with each major lawsuit filed against the state.
Bruning and Stenberg are both considered Republican primary frontrunners, with each man vying for the support of the tea party movement. Stenberg scored some successes this week, earning an endorsement from the national conservative advocacy group FreedomWorks. Bruning had previously been endorsed by another national group, the Tea Party Express.
In this environment, the question of who is the true fiscal conservative could prove key.
The debate also underscores an age-old problem: When politicians wrangle over budgets, facts are often lost in the rhetoric.
In the end, both men had very similar spending habits in public office, if you level the playing field by factoring in the lawsuits. Stenberg's state spending grew by an annual average of 3.3 percent over his dozen years in office, while Bruning's has grown by 4.1 percent over his first eight years, according to legislative fiscal analysts.
But there is another way to see the difference.
Stenberg's budget would have more than tripled — and far exceeded Bruning's — had the tab from two river disputes with Kansas and Wyoming and a nuclear waste lawsuit been a part of his bottom line in the way that such lawsuits are for Bruning.
Stenberg doesn't dispute the math but calls it unfair to hold him politically responsible for three expensive lawsuits that state lawmakers and then-Gov. Ben Nelson placed under the budgets of different agencies.
The three Stenberg-era lawsuits cost the state $57 million. The most expensive lawsuit waged during Bruning's tenure, concerning state aid to public schools, cost $6 million.
"It would be very unfair to look at it (like that), because these are extraordinary events. Jon Bruning was fortunate, up until now, to not have to deal with those issues," Stenberg said.
He also called it unfair to compare only state spending. If federal tax dollars and fees collected by the Attorney General's Office are considered — and the lawsuits are factored in — Bruning's spending growth would have further outpaced Stenberg's. Bruning's total budget grew by an annual average of 7.1 percent over his eight years, while Stenberg's grew at 4 percent.
The growth in the federal and fee parts of Bruning's budget can be attributed, in large part, to his office collecting more in federal dollars to fight Medicaid fraud and collecting more in fees from a drunken-driving program.
About half of the federal dollars collected by Bruning's office are used to pay for a Medicaid fraud unit state lawmakers adopted in 2006. In addition, a license revocation procedure for drunken drivers has grown dramatically during Bruning's tenure, raising more than a half million in fees to pay the attorney general's program expenses.
Stenberg argues that federal dollars are not "pennies from heaven" and that Bruning needs to be held accountable for his office's total expenditures.
Bruning counters that state lawmakers required him to create the Medicaid program and that it has recouped $39 million in lost dollars. (Most of that money has come from settlements in national drug lawsuits.)
During his tenure as attorney general, Stenberg touted his budget-cutting ways. At one point in the 1995-96 budget, he actually decreased his office's state expenditures by nearly 2 percent.
Along the way, some criticized Stenberg for keeping his budget low by pushing some of the state's biggest and most expensive litigation onto the budgets' of other state agencies.
For example, when Stenberg came to office, the water lawsuit with Wyoming was moved to the budget of the Nebraska Department of Natural Resources. The decision to place that lawsuit — and the subsequent one with Kansas — under another agency were made by the Nebraska Legislature and Nelson.
But Stenberg approved and supported those decisions. And he defended those decisions again in recent weeks.
He said it was important that lawyers with extensive trial experience handled the cases. It would have been difficult for him as attorney general to hire such lawyers for cases with limited lifespans, said Stenberg.
"When the lawsuit was over, we'd have to let go any lawyer we would have hired," he said.
The state's legal costs for the river lawsuits: $36 million.
Stenberg also came under fire for farming out a low-level nuclear waste lawsuit for political reasons. Stenberg recused himself and his office from the lawsuit that alleged then-Gov. Nelson and his administration had wrongly denied a license for the compact to build a waste facility in Boyd County.
At the time, Stenberg was making his first bid for U.S. Senate against Nelson, and he said he did not want to be accused of politicizing the case.
Bruning and others have since argued that Stenberg's political ambitions cost the state millions, because he allowed the case to be handled by a Washington, D.C., law firm under the auspices of the Nebraska Department of Environmental Quality.
The case cost Nebraska taxpayers $21 million in legal fees. In contrast, the three utility companies and multi-state compact that sued the state spent a combined $6 million.
Bruning has called the legal fees "outrageous." One of his first decisions in office was to return oversight of the lawsuit to the Attorney General's Office. He also has since taken back control of all water lawsuits.
Johanns, a fellow Republican, had urged Bruning to assume control over all major lawsuits. Johanns told The World-Herald he believed it would be cheaper if state attorneys managed the cases rather than farming them out to expensive law firms and to other state agencies.
"I visited with Bruning on a number of different occasions," said Johanns, who said he is "neutral" in the Senate race. "We were looking at ways to save money, and I told him it would be great if we could handle some of this work internally."
Stenberg argued that the decision to place the low-level nuclear waste lawsuit under the authority of the Nebraska Department of Environmental Quality made sense — whether or not he was running for Senate.
The department was the agency that denied the license for the site. And, he noted, the attorneys tabbed to represent the state were chosen by Nelson.
Had his office handled the lawsuit, Stenberg said, he would have been blamed for losing the case. "Had we attempted to defend that lawsuit in-house, the critics who now say we should have done that would say we should have hired a top-flight law firm," said Stenberg.
Since he has taken office, Bruning admits he has not had to deal with litigation as large or as expensive as that brought during Stenberg's years. But he has had some major lawsuits that have spiked his budget.
For example, his office spent $6 million to defend the state in a lawsuit brought by the Omaha Public Schools over the state aid formula. Much of that money was spent on an Omaha law firm Bruning hired to handle the case.
His office oversaw payments to the firm, and several of his office's attorneys helped with the case, Bruning said.
The school aid lawsuit was the major culprit causing Bruning's budget to rise dramatically between 2004 and 2008.
It hit a high of $8.2 million in 2008 and dropped to $5.5 million in 2010-11.
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