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Archive for Friday, March 2, 2001

AG’s assistant defend foundation creation

March 2, 2001

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— A House Democrat seeking answers about a $75 million charitable trust created by Atty. Gen. Carla Stovall said Thursday that he was preparing a legal challenge to take to the Kansas Supreme Court.

Rep. Joe Shriver, D-Arkansas City, has raised several questions about the attorney general's settlement last August with Blue Cross-Blue Shield of Kansas. The settlement resulted in creation of the trust dubbed the Sunflower Foundation: Health Care for Kansans.

Shriver, along with colleagues in both parties, argues the settlement funds were state money that should be appropriated by the Legislature. He has spent hours in recent weeks poring over case files.

He contends that Stovall exceeded the power granted to her office by the Legislature decades ago, to "fashion an out of court settlement to control both the board of Sunflower Foundation and the appropriation of its funds for the benefit of her office."

Blue Cross-Blue Shield of Kansas filed suit in 1997 seeking clarification of whether it was a charity under Kansas law. The state contended the company was a charitable organization and that the people of Kansas had a claim on some of its assets.

In the settlement reached last August, the company agreed to pay the people of Kansas $75 million for the years it operated as a charity, from at least 1941 until its tax status changed in 1969.

Stovall used the money to create the Sunflower Foundation, with a nine-member board overseeing use of interest on the money for public health programs.

The House Appropriations Committee, of which Shriver is a member, has delayed endorsing the attorney general's $21.7 million budget for the next fiscal year because of questions about the settlement.

John Campbell, senior deputy attorney general, told the committee Thursday that Stovall did not exceed her powers but instead carried out duties under common law.

"For more than 400 years, attorneys general have been protecting charitable trusts on the behalf of the people," Campbell said.

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