Questions raised about Hatch-negotiated deal

When the state of Minnesota and Capitol One Bank ended a consumer protection lawsuit two years ago, the settlement came in at $749,999. That's one dollar less than than the amount that would've sent then entire payment into the state general fund. Legislative Auditor Jim Nobles says the amount of the settlement caught his attention, as did the community organization that ended up getting about a third of the money. "A significant amount of the settlement went to ACORN, an organization that in my view at the time at least was a political organization," Nobles told lawmakers on Monday. "And so I questioned why would the attorney general divert money to that kind of organization?"

Nobles says he hasn't found anything illegal in the Capital One settlement, but he hasn't ruled out looking closer at the ACORN payment. He say the issue could be included in a regularly scheduled audit of the attorney general's office next year. "As I sort out the issues I need to address, and if anybody comes forward with information on possible improprieties in that settlement, I can certainly look at it," he said.

Nobles asked both Attorney General Lori Swanson and her predecessor Hatch to respond to his questions about the settlement. Swanson, who was Hatch's top assistant at the time, deferred to her former boss.

ACORN's political action committee endorsed DFLer Hatch in his run for governor in 2006. But Hatch denies any relationship between the settlement and his political campaign. In a letter to Nobles, Hatch recalled it was Capital One that suggested ACORN as a recipient. He also noted that ACORN and the ACORN PAC are legally distinct entities.

Hatch blamed DFL Representative Steve Simon of St. Louis Park for pushing the issue. Hatch says Simon lost his job in the attorney general's office and is now trying to get even.

Simon says he resigned from that job and was on good terms with Hatch.

"I just don't get why someone would make up facts, and more to the point, divert attention from what are some serious and troubling allegations," Simon said. "And I just don't think there's any sort of place for that kind of character assassination."

Questions about the Capitol One settlement came to light during interviews the Office of the Legislative Auditor conducted as part of a preliminary investigation of alleged ethical lapses in the attorney general's office. Nobles announced last month that he found those allegations were credible, but there was no evidence of any wrongdoing that fell within his jurisdiction.

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