Attorney General Matt Denn Wednesday proposed a plan to allocate money from a financial crisis settlement, designed to aid Delaware’s most economically distressed and crime-ridden communities.
Denn has moved aggressively in efforts to deal with high homicide rates in the state and Wilmington after taking office earlier this month. Law enforcement and judicial officials have warned that the high murder rate cannot be reduced through incarceration alone.
Concern mounted in the state after the publication of a Newsweek article entitled Murdertown USA. The article drew fire from Wilmington Mayor Dennis Williams. However, the state’s chief prosecutor said she could find no inaccuracies in the story.
Also, companies in Wilmington have expressed concerns about the safety of employees, due to scattered instances of crime in downtown.
Funded by settlements with Bank of America and Citi over allegations of actions with respect to investments that contributed to the financial crash, “Lifting Up Delaware’s Communities” consists of three main components: Investing in people and neighborhoods, providing help to our high-poverty schools, and promoting affordable housing and development in economically impacted areas, Denn stated.
The banks are accused of offering and creating a market for subprime mortgages that led to a wave of foreclosures when borrowers were unable to pay or simply walked away from their obligations. The mortgages also contributed to the decline of some inner city areas and suburbs, leading to vacant homes and further activity.
“We believe that this ambitious investment in Delaware’s economically impacted communities has the potential to transform parts of our state,” said Denn, “and we have faith it will have a real impact on people who desperately need help.”
Gov. Jack Markell noted the plan supports efforts in some of the highest need areas of the state, which can then serve to enhance all of Delaware.
“Thriving cities shelter their people in safe and comfortable homes,” Markell said. “They support vibrant neighborhoods, and that allows businesses to prosper, and it also lures visitors as well.”
The plan includes $16 million in programs to help youth succeed, provide treatment for Delawareans with substance abuse disorder, help inmates being released from our prisons to avoid going back to jail, and fund a variety of policing, housing, economic and other activities for struggling communities.
The settlement of investigations into the actions by Bank of America and Citi, in addition to providing direct relief to some homeowners and the state’s pension funds, has resulted in the state having $36,615,801 that it is permitted to spend to remediate harm the state suffered from the mortgage and financial crisis, and improve housing.
The settlement funds are not meant to be used to simply supplant existing state programs or for programs that do not target economically impacted areas or individuals.
“In the past, the Attorney General’s Office has independently exercised its common law authority to distribute lawsuit settlement funds,” said Attorney General Matt Denn. “But given the unprecedented sum of money involved in this settlement, we believe it is a sound practice to consult with the Governor and General Assembly regarding the expenditure of the funds.”
The Attorney General has already consulted with the governor and obtained his agreement regarding the use of the funds, and will now seek to enter into a similar agreement with the General Assembly’s Joint Finance Committee.
Wilmington City Council President Theo Gregory thanked the Attorney General for acting so quickly.
“I wanted to thank and express my appreciation for the foresight in the recognition that there’s an urgency to get started, and that Matt Denn hit the ground running,” Gregory said.
The Join Finance Committee is expected to address the proposal in early February.
