CALA, AG's office attack each other

Chris Dickerson Jun. 8, 2007, 4:00pm

West Virginia Citizens Against Lawsuit Abuse has billboards like this one, located near the state Capitol, promoting its report on the practices of Attorney General Darrell McGraw's office. (Photo by Chris Dickerson, The West Virginia Record)





CHARLESTON, W. Va. - Armed with a report and a statewide ad campaign, a watchdog group is urging legislators to rein in some of West Virginia Attorney General Darrell McGraw's practices.

West Virginia Citizens Against Lawsuit Abuse this week launched a statewide ad campaign featuring billboards and radio spots highlighting what it calls McGraw's abuse of power, namely his hiring and spending practices.

Also, WV CALA has a 16-page report that it prepared for lawmakers that "questions McGraw's ethics and seeks legislative action to make him accountable for public funds he controls."

McGraw's chief deputy, meanwhile, responded by sending a letter to legislators saying CALA and its report are funded by "large out-of-state corporate interests" and that the group's mission is "to foster a legal environment that shields its contributors from accountability when they break the law."

And one state senator says he sees "glaring" problems in the AG's office that need to be addressed.

"West Virginia citizens are being ripped off because Attorney General Darrell McGraw can't keep his hands off public funds," WV CALA Executive Director Steve Cohen said. "The Legislature needs to rein in McGraw's appointment of cronies from the personal injury bar and prevent him from converting lawsuit settlement dollars into, what is essentially, a political slush fund."

Cohen said WV CALA has billboards going up across the state, including one in the shadow of the state Capitol. He also said the group has radio ads running on stations acrss the state.

In addition to being given to all lawmakers, the CALA report is in the hands of its 33,000 members. It also can be found online at

To read CALA's report, click here.

CALA's report also says:

* McGraw has jeopardized Medicaid coverage for West Virginia's neediest citizens.

* McGraw has failed to pay state agency clients -- Workers' Compensation, PEIA and the Health Department -- for the damages he obtained on their behalf in a lawsuit.

* McGraw instead chose to enrich his campaign contributing personal injury lawyer friends and keep the remaining settlement money in his own personal slush fund.

* McGraw recently paid $125,000 to a former employee who alleged that his office was using lawsuit settlement dollars to benefit McGraw family political campaigns.

* A recent poll which showed that more than four in five West Virginians want McGraw's hiring practices to be regulated.

* Fran Hughes, McGraw's chief deputy, recently told state Senators that the AG's office would stop its spending of lawsuit awards, but shortly thereafter the office distributed $1 million of the settlement monies.

"McGraw later appeared to repudiate such promise by expressing fears that the Legislature would 'blow' state lawsuit awards," Cohen said. "Basically, McGraw has used the OxyContin settlement money for his own pet projects.

"The report was prepared for the Legislature so it can begin to bring reform to Darrell McGraw's office."

Hughes wrote a letter to lawmakers dated June 5. In it, she says WV CALA is anything but the grassroots organization it claims to be.

To see a copy of Hughes' letter, click here.

As a 501(c)(6), "CALA does not pay taxes on any of its contributions," Hughes wrote. "Even more telling, the industries which contribute are able to write it off as a business deduction. Please ask CALA to share with you its contribution list."

Hughes goes on to say CALA "disguises its real intentions by pretending to a grassroots organization comprised of ordinary citizens simultaneously expressing their dismay at our legal system."

"It works its sophisticated deception aimed at duping West Virginians into believing that only by giving up their rights to access to the courtroom can the State have economic development," Hughes wrote. "Unchecked and unfettered corporate power accountable only to shareholders is the real threat to fairness for all citizens."

Hughes wrote that CALA's report was prepared by the same people McGraw's office regulates under consumer protection and antitrust laws. Attached to the letter is a copy of a definition of a 501(c)(6) organization.

"The reason they attack the Attorney General's office is because we have been effective in stopping their unlawful activities," Hughes wrote in her letter. "Indeed, we were the first state in the nation to hold Purdue Pharma accountable for its illegal and what we now know to be criminal marketing practices."

Cohen dismissed Hughes' complaints about CALA.

"One would expect the top deputy to the state's chief legal officer to know that West Virginia Citizens Against Lawsuit Abuse is a legally chartered non-profit organization under West Virginia law with 33,000 grassroots members in every West Virginia county," Cohen said.

Cohen said CALA wants the Legislature to pass a sunshine law making McGraw's appointments of special assistant AGs subject to public scrutiny.

Last month, The Record reported that McGraw's spending of lawsuit settlement dollars has caused the federal government to threaten withholding state Medicaid funding for West Virginia citizens.

"The timing of this report is not only because of the legislative interim meetings this week, but also because the federal government just put West Virginia on notice because of Attorney General's conversion of lawsuit settlement funds into what is essentially a political slush fund," Cohen said. "He has jeopardized Medicaid funding for the state."

Hughes' letter to lawmakers also mentions the Medicaid letter.

"The letter contained a quote from The West Virginia Record, a newspaper owned by the United States Chamber of Commerce," she wrote. "People who work in Washington, D.C., for CMS don't sit around reading The West Virginia Record. This letter was instigated by people who have a vested interest in stopping the Attorney General from enforcing consumer laws against the pharmaceutical industry."

She says these vested interests "will stop at nothing, including harming the state's Medicaid program.

"The Oxycontin settlement was purposely structured to avoid CMS taking a majority of the money," Hughes wrote. "CMS has no viable claim to the Oxycontin settlement moneys because of how the settlement was structured.

"While we appreciate there has been a difference of opinion concerning the distribution of this money, we believe that the way the settlement was structured greatly enhances West Virginia's position and minimizes the chances that CMS will be able to receive any of this money."

Hughes' letter to lawmakers also mentions her comments in January to a Senate committee about future distribution of the Oxycontin settlement money.

"I am truly sorry if my inartful words contributed to the confusion regarding the Attorney General's office's intent regarding future distribution of the Oxycontin settlement money," she wrote. "I never represented that we would discontinue the distribution ...

"What I did represent was that the Attorney General's office would not construct any new settlements vesting the Attorney General's office with the sole discretion on how to distribute the money. We want to work with the Legislature, we respect the role of the Legislature, and we ask that our role as the Chief Legal Officer be respected."

Meanwhile, state Sen. Andy McKenzie said he has questions.

"I think there clearly are some glaring problems and issues that the Attorney General's office needs to step up and respond to," said McKenzie, R-Ohio. "The way Darrell McGraw expects corporate America to operate is the exact opposite of how he runs his office. It's secretive and closed.

"He doesn't want people to know what's going on there, and he doesn't want people to even ask questions about it. He should operate his office the same way he expects businesses to operate. Right now, it's just the opposite of what he expects from corporate America."

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