McGraw backers will argue for $4M in state case
WHEELING, W. Va. (Legal Newsline) - Campaign contributors given state contracts by West Virginia Attorney General Darrell McGraw will try to stake their claims to portions of nearly $4 million in fees in August.
On Aug. 20, attorneys for four firms involved with a settlement between the State and Visa and MasterCard will argue for $3.9 million in fees at a final approval hearing in Ohio County Circuit Court. Members of two of those firms are contributors to McGraw, seeking re-election this year.
"(T)he settlement agreements provide that Visa shall pay up to $3,000,000 and MasterCard up to $900,000 for the State of West Virginia's reasonable attorneys' fees and costs arising from the work involved in filing and pursuing this lawsuit and in bringing this settlement about, in an amount to be approved and awarded by the Court," a notice on McGraw's website says.
"Those payments shall be made to an account designated by the Special Attorneys General that assisted the Attorney General or as otherwise ordered by the Court. Those payments are in addition to the other payments described above and shall not affect the payments for the sales tax holidays or the payments to the State's Attorney General Consumer Protection Fund."
The firms representing the State are: Bucci Bailey & Javins in Charleston; Wexler Toriseva Wallace LLP in Wheeling; Hagens Berman Sobol Shapiro LLP in Seattle; and Cuneo Gilbert & LaDuca LLP in Washington, D.C.
Teresa Toriseva donated $844 to McGraw and is the president of the West Virginia Association for Justice, formerly known as the West Virginia Trial Lawyers Association. Guy Bucci has donated $1,000 to McGraw, running for re-election this year against Charleston attorney Dan Greear.
Much of the settlement -- $11.6 million -- will create three sales tax holidays on appliances that carry the "Energy Star" label and cost $2,500 or less.
The proposed settlement, reached in January, originally called for $12.1 million set aside in a trust account. The lawsuit, filed in Oct. 2003 in Ohio County, alleged the companies violated the state's antitrust and consumer protection laws.
McGraw said the two forced an increase cost of business for merchants accepting their credit and debit cards, and the costs were passed on to shoppers by increasing the costs of almost every retail product.
West Virginia is the only state to collect anything concerning those allegations from the companies. Target, Sears and Wal-Mart all settled with the companies in 2003.
Another outside counsel agreement has recently made headlines for McGraw.
Three of the four attorneys recently appointed as Special Assistant Attorneys General in an investigation into teacher annuities have given the maximum $1,000 contributions to McGraw's re-election campaign.
McGraw appointed Charleston attorneys Jim Lees, Anthony Majestro and James Peterson as well as Jonathan Turak of Moundsville to look into whether the Variable Annuities Life Insurance Co. convinced thousands of teachers and school service personnel to invest in its low interest fixed-rate annuities.
Majestro, Peterson and Turak each have contributed $1,000 to McGraw's campaign. Also, members and family from Peterson's firm gave a total of $5,000 to the McGraw war chest. People at Turak's firm gave a total of $2,000.
Over the years, members of Peterson's firm have given more than $20,000 to McGraw's election efforts. Turak and Majestro's firms have also given to McGraw in the past.
Private attorneys also earned more than $3.3 million of a $10 million settlement with OxyContin-manufacturer Purdue Pharma in 2004. That settlement drew criticism from state lawmakers who were unhappy the State's general fund never received any of the settlement funds.
Instead, McGraw dished out the remaining money to programs and organizations that fight substance abuse.
McGraw and Chief Deputy Attorney General Fran Hughes have long defended their practice of hiring outside counsel to pursue cases against businesses.
"Think of the terms," she said in 2006. "We don't know how long we want you to work, or how much it will cost you, or how much you'll be paid. The attorneys selected are highly skilled, and have the capital and the infrastructure to try large cases.
"Any judicial officer receives contributions from the bar, but Attorney General McGraw does not appoint special assistant attorneys general based on campaign contributions. Not many attorneys have the expertise to engage in antitrust litigation."
Another member of the Bucci firm is state Del. Carrie Webster (D-Kanawha), who was the lead sponsor of recently passed legislation that will require organizations that donate more than $5,000 to a campaign to disclose their financial backers.
West Virginia Citizens Against Lawsuit Abuse said Webster was doing McGraw's dirty work by leading the charge to enact the bill.
"Webster knows McGraw's practice of hiring his campaign contributors makes him vulnerable in the election if the public is aware of his shenanigans," CALA Director Steve Cohen said. "She is railroading this complicated bill through the legislature in a brief special session to insulate her lawsuit sugar daddy and husband's employer from criticism this fall."
From Legal Newsline: Reach John O'Brien via e-mail at email@example.com.