Auditor files lawsuit against Gov. Nixon over $170 million in unaccounted funds

A letter from state auditor Tom Schweich's to Gov. Jay Nixon details constitutional problems uncovered in a June audit of the governor's office.
Gov. Jay Nixon speaks to state representatives and the media during the annual State of the State address Jan. 19 at the state capitol building in Jefferson City. Nixon is currently being sued for withholding more than $170 million that could be put toward Missouri universities. Maneater File Photo

State auditor Tom Schweich’s office filed a lawsuit against Gov. Jay Nixon on Aug. 26 in Cole County Circuit Court, stating Nixon violated amendments III and IV of the Missouri Constitution by withholding more than $170 million from more than 45 state programs.

Funds intended for Bright Flight Scholarships, community colleges and state universities, veterinary student loans and Parents as Teachers were among the programs whose funding was withheld by the governor, according to a news release from Schweich’s office.

The release also stated the auditor believes the governor withheld funds from the Republican-controlled legislature but not from any Democrat official.

The constitutional violations surfaced in June after a regularly scheduled audit of the governor’s office. The auditor notified the governor of the funding discrepancies in a letter sent Aug. 19.

"The governor has no excuse to violate the Missouri Constitution," Schweich said in a news release. "He has the same obligation of transparency and accountability as any other elected official."

The governor’s office declined to work with the legislature to allocate the $170 million to the areas where it was appropriated and stated the auditor’s report was incorrect, according to the release.

"Our office does not like litigation," Schweich said in the release. "We prefer matters to be resolved by dialogue. I recommended the governor work with the legislature on this issue. Instead of correcting his actions and working with the legislature, the governor has said, 'The auditor is wrong.' These withholdings are critical as they will result in programs ending and jobs being lost."

According to the auditor’s office, Nixon did not account for where the $170 million was appropriated when he submitted the proposed budget to the legislature. These funds, not included in his proposition for the fiscal year, bypassed the legislative branch’s approval, which is needed to approve that use of funds. According to the Missouri Constitution, governors are only allowed to withhold funds when insufficient revenue comes in to fund budget appropriations, the auditor's office news release stated.

The governor's spokesman Scott Holste said Nixon's actions are within the realm of the governorship. Last week, Missouri's AAA credit rating issued by Standard and Poor's was reaffirmed. The highest rating a state can be issued, AAA, indicates an extremely strong ability to honor fiscal commitments.

"A key basis for this rating has been Gov. Nixon's fiscal discipline in managing Missouri's budget," Holste said in an email. "To achieve this, the governor has used his constitutional authority to fulfill his responsibility to reduce spending to balance the budget."

Maintaing an AAA rating while experiencing natural disasters statewide earlier this year, Schweich said, does not justify a lack of transparency in state funds.

"There is no dispute that the victims of the tornadoes and floods must be fully compensated for their tragic losses," Schweich said. "But the process must be legal and transparent. There are many legal and transparent ways to do this."

Holste said the governor will continue to conduct affairs in the way he feels is appropriate for the state.

"The governor will continue to fulfill his responsibility to balance the state budget, fund essential government services and help our communities recover in the wake of the many natural disasters this year, including the devastating tornado that hit Joplin," he said in an email. "Gov. Nixon will continue to ensure that Missouri will meet its obligations to help communities recover and rebuild from these disasters."

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