Some of the $3 million being paid to Arizona by Western Union to settle a case stemming from the company’s money transfer business will be used for an unrelated purpose: to help expand a study of potential discrimination in the awards of state contracts.
“It’s a study to determine how we’re doing as a state and what strategies we can be doing to make sure it’s a fair process,” said Mike Haener, a spokesman for Governor Napolitano.
Without admitting wrongdoing, Western Union last month agreed to pay the $3 million to resolve a case in which the state Department of Financial Institutions said 14 Arizona outlets of the Colorado-based money-transfer company did not properly report transfers and document information on senders and receivers.
Money transfers have come under increasing scrutiny from federal and state authorities because of the potential for use in financing operations that smuggle illegal immigrants and other contraband.
A consent order between the state and Western Union calls for the company to pay a $1.6 million civil penalty to the Department of Financial Institutions and $1 million to a state task force on identity fraud.
$400,000 will go to expand study
The rest of the settlement, $400,000, goes to the state Department of Transportation to expand a federally funded study of that agency’s contracting practices. The expansion will allow the study to cover additional state agencies, Mr. Haener said.
“This is a way to do that study without additional taxpayer dollars,” Mr. Haener said. “I don’t think we attempted to get it (an appropriation) from the Legislature but this is an important issue for the governor. We’ve been trying to find ways to fund that.”
Dick Badler, a Western Union spokesman at the company’s headquarters in Englewood, Colo., said Western Union had suggested to Arizona officials during their settlement negotiations that some of the money to be paid by Western Union be designated for a specific worthwhile purpose.
“Let’s try to find a program where we can do some good. The state came back at us with this program as part of the negotiation. Then the $400,000 was earmarked for this fund,” Mr. Badler said. “That’s how it got in there.”
The state’s study of its contracting practices was launched in the wake of the transportation department shelving its program to give preferences to minority businesses.
The Arizona agency took those actions after the 9th U.S. Circuit Court of Appeals ruled last year that the state of Washington had not shown that discrimination existed before it started giving minority-owned businesses preferences for contracts under a federal program.
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.