The issue, which had been the subject of quiet dispute and a flurry of letter-writing over the last month, spilled into public view at a recent Senate budget hearing, with the two sides describing a stalemate that also dragged in Treasurer John Kennedy.
At one point, Landry asserted a $200 million settlement payment that lawmakers slated to help balance this year's budget should be held by Kennedy's office in escrow pending his clearance.
In a May 4 letter from Landry to Kennedy, the attorney general described himself as the "constitutional and legal officer" for the state and told the treasurer to "hold any funds wired from BP in escrow in the Treasury pending further instructions from me."
The treasurer has decided against complying with that request, and he said he won't hold up the $200 million since lawmakers clearly decided how that should be spent. However, Kennedy has asked state lawmakers to intervene and settle the disagreement over how another $32 million should be handled.
"We're all adults here, and we need to sit down and resolve this. To me it's just clear that the Legislature has the final say," said Kennedy, a Republican.
The oil spill money is among a variety of financial and legal issues over which the Democratic governor and Republican attorney general have been at odds since both men took office in January.
Louisiana recently received a $20 million payment for fees and costs from the oil spill litigation. The state is expected to shortly receive $19 million for natural resource damage assessment costs.
Millions more will be coming in annually. State and federal laws govern much of the $6.8 billion the state is expected to receive from BP PLC for the 2010 oil spill. Most of the money is required to be set aside for coastal restoration projects and environmental rehabilitation.
But there are gray areas about some of the pots of money, like the $20 million payment for legal expense reimbursement.
The Edwards administration said Landry's office was owed $5 million for documented legal expenses tied to the case. The treasury was owed a $16.6 million repayment for a loan from state reserves used to reimburse prior legal expenses for the attorney general's office, a loan the Edwards administration — through its coastal agency — is on the hook for repaying.
But both Edwards' coastal office and Landry's office sent requests to Kennedy for the full $20 million.
In a May 8 letter to Kennedy, the governor's executive counsel Matthew Block said it appeared the attorney general's office wanted to be overpaid for costs from the spill litigation.
"This request by the Attorney General is asking for the same money twice," Block wrote.
Kennedy determined that lawmakers earlier had earmarked $7 million to the attorney general and sent the money, more than the $3.4 million the Edwards administration wanted to provide.
Lawmakers agreed they wanted the $7 million to reach Landry's office, but even that drew complaints from senators that Kennedy didn't move the money as they specified through Edwards' coastal office.
Now, Kennedy wants guidance on what he should do with the remaining $13 million and the $19 million payment coming in early June, after his office couldn't broker an agreement between Edwards and Landry.
"Those parties have not been able to resolve their strong disagreement over these funds and have submitted competing letters and instructions to the Treasury over the last several weeks," Kennedy wrote to legislative leaders.
Senate Finance Committee Chairman Eric LaFleur, D-Ville Platte, expects lawmakers will make their intentions for the money clear in the remaining days of the current legislative session.