AG will alert W. Va. lawmakers of potential windfalls

John O'Brien Mar. 18, 2008, 4:33pm


CHARLESTON, W. Va. - West Virginia lawmakers have passed a bill that will require the state's Attorney General to notify them of any large amounts of money that might be coming their way.

During a Sunday special session, both chambers of the Legislature and Gov. Joe Manchin pushed the bill through, according to a report in the Charleston Daily Mail.

"The Legislature finds that there are numerous actions, suits and proceedings filed against state government agencies and officials that may affect the public interest," says the bill, titled H.B. 104. "Depending upon the outcome, this type of litigation may have significant consequences that can only be addressed by subsequent legislative action.

"Government agencies and their officials require more notice of these actions and time to respond to them and the Legislature requires more timely information regarding these actions, all in order to protect the public interest."

And that public interest will be served by requiring the Attorney General, currently fourth-term Democrat Darrell McGraw, to notify the Governor, the Department of Administration, the President of the Senate and the Speaker of the House of Delegates of any legal action that may result in a financial gain of more than $250,000.

The money could come from a settlement, jury award, state or federal seizure or a forfeiture of assets in a criminal case.

Those to be notified also will be given copies of pleadings and related documents in actions that could result in a settlement or judgment prior to a court-approved agreement dictating how the money will be spent.

The bill is a twist on another that fizzled out, even though it was sponsored by 18 of the 34 state senators.

Its stated purpose was to "reaffirm the Constitutional authority of the Legislature to appropriate public moneys; to establish procedures for appropriation of moneys received in certain actions; and to require reporting expenses in these actions in order to provide the Legislature with information necessary for it to properly exert its authority to appropriate."

Legislators and McGraw have disagreed over his past spending of settlement dollars.

Twice in recent months, the federal Centers for Medicare and Medicaid Services, which supplies about 75 cents of every dollar the State spends on Medicaid, has notified the state's Department of Health and Human Resources that it will be withholding Medicaid funds because it does not believe it was given what it was owed from two of McGraw's lawsuit settlements.

A $4.1 million withhold, currently being appealed, results from the $10 million agreement with Purdue Pharma, reached in 2004 over the company's painkiller OxyContin. Another $634,525 potential withhold relates to a settlement with Dey Inc., which McGraw's office claimed inflated the prices of the prescription drugs it manufactured, thereby defrauding the state's Medicaid program.

The Purdue Pharma settlement was intentionally structured in a way that prevented the Legislature from receiving any funds.

Sen. Jesse Guills, R-Greenbrier, a member of the Senate Finance Committee asked McGraw in a January meeting who would be responsible for paying the federal government back.

"If we lose this contest, who will pay the $4.1 million?" Guills asked.

"The burden is back on the Legislature," McGraw replied.

Guills also asked where that money would come from.

"Perhaps sharper pencils than mine can find 0.005 percent of that money," McGraw said, referring to $2 billion figure he's secured in settlements since becoming AG.

McGraw said his office had three options when reaching the OxyContin settlement.

"We could take the money agreeable to the judge and the drug company," he said. "We could've turned it over to the DHHR, and the money would have gone back to the federal government. Bye-bye.

"Or we could've given it to the Legislature, which would have been obliged to give it to the DHHR. Bye-bye."

McGraw had another dicey encounter with lawmakers when he met with the House Budget Committee. Del. John Doyle, D-Jefferson, criticized McGraw's actions.

"The minute your office or any office gets money for the State of West Virginia, that money is instantly the property of the taxpayers of West Virginia," Doyle said, according to a report in the Charleston Daily Mail. "Therefore, the Legislature must decide how it is spent."

Trial lawyers hired by McGraw to represent the State in the settlement received more than $3 million in attorneys fees.

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