Illinois attorney general's billions in collections part of job, also something to be watched: Economics prof

By John Sammon | Jun 5, 2018

CHICAGO – While he said state attorneys general are in business to collect a state’s money when it is owed, an economics scholar also said overzealous attempts to use the power of the office to generate collections for the state could be a possibility to be watched.

“The attorney general, as the chief legal officer for Illinois, does collect hundreds of millions of dollars for the state,” J. Fred Giertz, professor of economics at the University of Illinois' Institute for Government and Public Affairs in Urbana-Champaign, told the Cook County Record. “At the margins, there is always the concern about pushing too far.”

Giertz’s comments came in the wake of an announcement by Illinois Attorney General Lisa Madigan that her office had collected $864 million in revenue during 2017 and more than $14 billion since she took office in 2003 on behalf of the state.

Much of the money ($339 million) came from litigation and collection efforts involving the collection of funds for damage to state property, child enforcement, fines and penalties, according to Madigan's office. In addition, the 2017 amount collected included $19.5 million for Illinois pension systems from a settlement with Moody’s Investment Service to resolve an investigation into the marketing of what Madigan’s office termed “risky residential mortgage-backed securities leading up to the 2008 economic collapse," the release stated.

IL Attorney General Lisa Madigan  

“Since becoming attorney general, I have brought in more than $14 billion for Illinois, including nearly half a billion dollars in funding for our state’s pension systems as a result of the 2008 financial crisis,” Madigan stated in the April 11 news release. “I am proud of my work to generate needed revenue for the state of Illinois, especially during difficult economic times.”

In addition, Madigan, a Democrat, reported that her office collected more than $250 million through tobacco litigation and more than $254 million in estate tax revenues. Madigan also reported that her Consumer Fraud Bureau mediated nearly 25,000 complaints in 2017 and provided more than $6 million in mediated savings for Illinois consumers.

Bottom line, the release states, is that for every dollar of taxpayer funding her office received, the office generated $28.01 back to the state.   

Giertz said much of the collections are routine settlements or from participation in multi-state lawsuits.

“Some is also collected through the efforts of various pension funds where the AG is the nominal legal representative," he said. "Some may also be directed from the AG’s initiative. In this regard the AG’s duty is to collect the obligations due the state.”

Giertz explained that the cost of pursuing damages in some cases may exceed the likely damage awards.

“In other cases, actions may involve aggressive attempts to set policy,” he said.

Regarding consumer fraud, Madigan said in her press release that, of the 24,669 consumer complaints filed last year, identity theft ranked number one for the first time since 2007. Education-related complaints jumped to the No. 2 spot with 2,399 complaints filed, partly as a result of the country’s student debt loan crisis.

“Every year my Top 10 list shows that scam artists, predatory companies and cyber criminals devise schemes to steal people’s money,” Madigan said in a press release. "My office will continue to aggressively pursue fraud and provide people with the help they need.”

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