Cooper, legislature battle in court over who controls millions in federal, VW funds

Attorneys for Gov. Roy Cooper and the legislature were back in court Wednesday — this time to battle over who controls federal block grant funds and the money distributed from a Volkswagen settlement.

There are three federal block grants in particular that Cooper argues he is responsible for spending — a substance abuse prevention and treatment block grant, a maternal and child health block grant and a community development block grant. Federal funds for those grants total more than $107 million per fiscal year, according to the state budget.

Martin Warf, an attorney who represents Senate President Pro Tem Phil Berger and House Speaker Tim Moore, contends that the funds from those grants go through the state treasury and can be appropriated by the legislature per the state budget act.

Cooper’s attorney Jim Phillips argues that state law determining whether the legislative or executive branch is in charge of federal block grants has not been settled.

“Just because funds are in a bank account maintained by the state treasurer, that does not mean the funds belong to the state,” he added.

In a separate but similar issue, Phillips said the governor has been charged as the agent of the state with regard to funds from the Volkswagen settlement, which totals about $92 million. There was a certification form, he said, signed and submitted by Cooper that dictates his role with regard to spending.

“The General Assembly, despite the fact they are not contemplated in the federal court decree, stepped forward and took control of these custodial funds,” Phillips said. “Control of these custodial funds are beyond the legislature’s domain.”

All of the funds at the center of this battle must be used for specific and limited purposes no matter who controls them.

Cooper’s arguments center on his power to execute the federal laws associated with the custodial funds, but Warf said there is a difference between executing the law and following the law.

Following the law would mean that the legislature has the power to appropriate the funds in question, Warf added.

Superior Court Judge Henry Hight said he expected to make a decision in the case by Friday evening.

The complaints are part of a larger lawsuit over a power battle between Cooper and the legislature that is being heard piecemeal by different judges.