As I begin my fourth year as state attorney general, I continue to believe there is no better job in state government and I am grateful to the people of Connecticut for the opportunity to serve.
My primary goal for the year ahead is to continue the outstanding work of my staff in representing the interests of the state and the citizens of Connecticut. Their efforts earned more than $537.2 million in revenue for the fiscal year that ended June 30—including $311.4 million for consumers and businesses and $222.5 million for the state’s General Fund. That’s nearly $19 earned on every dollar spent on the Office of the Attorney General’s $29 million budget.
Our vigorous defense of the state and state officials in hundreds of lawsuits has saved the state many millions of additional dollars. I’m proud of our achievements and want to build on that success in 2014.
To do so, I made several changes to my senior management staff following Nora Dannehy’s departure as deputy attorney general in October. Again, I have put together a terrific team, led by Deputy Attorney General Perry Zinn Rowthorn, who served previously as associate attorney general for litigation. Associate Attorney General Margaret Chapple has moved to the litigation associate position and Antoria Howard, former head of the Employment Rights department, is the new associate attorney general for management and administration.
No significant changes are planned in the internal organization of the office, but we continue to look for ways to make best use of our staff and resources. For example, we recently hired an electronic discovery specialist to assist litigation efforts across the agency. Following the success of the Privacy Task Force, we have put together another multidisciplinary team, the Healthcare Competition Working Group, to monitor competition issues in the delivery and pricing of health care.
Our staff attorneys are capable and dedicated. On our own, or through joining with other states and sometimes federal partners, we continue to pursue—and win—cases of state, regional and national import to protect state interest in public health and safety, and in competitive and open markets.
For example, environmental attorneys are working to protect Connecticut’s air from pollution blown in from other states, in part by forcing federal regulators to require out-of-state polluters to control their air emissions. Our antitrust attorneys, leading efforts joined by federal and state partners, won important settlements with e-book publishers and a decisive victory against Apple this summer over anticompetitive practices in e-book marketing. The result was millions of dollars in restitution for consumers nationally, with more anticipated.
In December, our finance attorneys helped to negotiate a $2.1 billion settlement agreement involving Ocwen Financial Corp. of Atlanta, and its subsidiary, Ocwen Loan Servicing, 49 states and the Consumer Financial Protection Bureau. Like the $25 billion National Mortgage Settlement announced in 2012 with the five largest loan-servicing companies, this latest agreement is part of our ongoing civil law enforcement effort to ensure loan servicers treat borrowers fairly. To date, our efforts have resulted in approximately $500 million in mortgage loan principal reductions for Connecticut homeowners, helping them avoid foreclose and shoring up the stability of neighborhoods.
We are leading litigation of national scope and significance against the securities ratings agency Standard and Poor’s Financial Services, and its parent, The McGraw-Hill Companies Inc. We believe S&P, despite claiming objectivity, took its own financial interests into consideration when rating structured securities, including mortgage-backed securities at the heart of the 2008 economic downturn. Our claim under the Connecticut Unfair Trade Practices Act has become a model for actions brought by 18 other states and the District of Columbia, and has informed the efforts of the Department of Justice, with which we continue to work closely.
Much of our work involves defending state agencies and officials in litigation. Those efforts include defending Connecticut’s gun control legislation enacted in response to the Sandy Hook tragedy from legal challenges. It is my strong belief that Connecticut’s new gun law is appropriate and lawful, and I am proud to defend it vigorously in court. Already we have succeeded in having one challenge dismissed in federal court, and we have filed dispositive motions in two other cases.
Other important issues that will command the attention of this office include the rapid changes in the way health care is delivered and paid for in Connecticut. Nonprofit hospitals have merged and other mergers are likely. National for-profit corporations are looking to Connecticut to acquire nonprofit community hospitals. And, both for-profit and nonprofit hospitals appear increasingly intent on acquiring previously independent doctors’ practices.
These trends raise questions about competition, the availability and cost of services and the impact on health care jobs. The consequences for competition and consumers are potentially significant, and Connecticut’s laws are outdated and ill-equipped to address these trends.
My role under Connecticut’s Hospital Conversion Act, for instance, is quite narrow: It is limited to protecting the charitable assets of the nonprofit hospitals acquired by for-profit hospitals, and to examining the financial viability of any acquisition. The Office of Health Care Access has some authority to ensure continued quality care and access, but those tools may prove insufficient and outdated.
The General Assembly should consider changes to require additional oversight and safeguards on hospital conversions, as other states have done. Legislators may also want to consider other measures, such as requiring all hospitals to notify my office whenever they acquire a group medical practice. Such notice would allow our attorneys to monitor competition and better enforce Connecticut’s antitrust laws.
Of particular note, I plan to propose legislation to ensure that so-called facility fees—charges added to the bills for professional services to cover the overhead costs of hospitals—are disclosed clearly to consumers in advance of care. These fees can be particularly confusing and burdensome when charged to patients of previously independent physician practices who may not be aware that their doctor has become associated with a hospital, subjecting them to hospital facility fees.
Finally, my approach to the job has not changed. I came into the Attorney General’s Office focused on finding the appropriate balance between enforcement of laws and the promotion of a healthy business climate in Connecticut. It is important that everyone understand where the lines of the law and regulation are drawn and that enforcement of those rules is consistent. I continue to hear both sides of an issue before deciding on a course of action.
However, when it is necessary and as we have demonstrated repeatedly, my office will not hesitate to seek an appropriate remedy in court or to vigorously and fairly defend the interests of the state.•