Judge affirms block against W.Va. campaign disclosure laws

John O'Brien Oct. 20, 2008, 3:17pm



CHARLESTON, W.Va. (Legal Newsline) - While West Virginia Attorney General Darrell McGraw's office appeals, an injunction against recently passed campaign advertising disclosure laws will remain.

U.S. District Judge Thomas Johnston, who blocked enforcement of the laws on Friday, denied Secretary of State Betty Ireland's request for a stay of the injunction Monday. Only a few weeks remain until McGraw, whose office is representing Ireland, is up for re-election.

The laws, which require groups that spend a certain amount on political advertising to disclose their financial backers, are being challenged by the Center for Individual Freedom and West Virginians for Life, an anti-abortion group.

"The relief granted by the injunction effectively rewrites West Virginia's election law some 17 days before the general election, which will undoubtedly result in a free-for-all of mud-slinging campaign attack ads by special interest groups that have no duty to report their expenditures or their sources of funding," Managing Deputy Attorney General Thomas Smith wrote.

Johnston was not swayed by Smith's argument, writing in his Monday order that the injunction will stand because of the reasons he laid out in issuing it. He said the plaintiffs were likely to succeed with their challenges, which claim the laws violated their right to free speech because they will have to fear payback from elected officials they campaigned against it.

"The Court is also mindful that the 2008 general election is now less than three weeks away, and is somewhat concerned that changing the rules this late in the game could cause disruption," Johnston wrote Friday in a 56-page opinion.

"The (Charleston Gazette) has reported just this week that virtually no independent expenditures have been made this fall in West Virginia's Supreme Court race, contrasted with nearly $800,000 in the 2008 primary.

"Could this be the autumn chill of unconstitutional laws? Or could it be that this year in West Virginia there is just less interest in our political discourse? The Court has little from which to draw answers to these questions, other than to note that no one has produced any evidence from which one could expect a substantial disruption on account of this Court's ruling.

"Accordingly, although disruption is a concern, it is overshadowed by the necessary vindication of First Amendment rights."

The CFIF, a nonprofit that says its mission is to protect Constitutional rights, has infuriated McGraw, who said he is filing a complaint against the group over its advertisement against him. He says the statements made in the commercial, which criticizes a 2004 settlement over the prescription painkiller OxyContin, are untrue.

State legal reform group Citizens Against Lawsuit Abuse criticized the bill that amended existing laws and passed this summer and its champion, Del. Carrie Webster, D-Kanawha, in July.

Webster works for the Charleston law firm Bucci Bailey & Javins, which was hired by McGraw to pursue a lawsuit against VISA and MasterCard. The firm is one of four to represent the State, with both in-state firms (the other is Wheeling's Wexler Toriseva Wallace) featuring McGraw contributors.

The four firms could collect nearly $4 million in attorneys fees in a settlement that provided a sales tax holiday on "Energy Star" home appliances.

Cohen also noted that Webster's husband, Greg Skinner, is a member of McGraw's staff.

The vice president of the West Virginia Association for Justice (formerly the state's Trial Lawyers Association) supported the law.

"An out-of-state special interest group should not be allowed to spend whatever they want to influence the outcome of a West Virginia election without disclosing who they are and who they represent," Michael Romano said.

McGraw, who is running for re-election against Republican challenger Dan Greear, said he plans to file complaints with the Internal Revenue Service and the Federal Communications Commission over CFIF's ads.

The ads criticize McGraw's controversial 2004 settlement with Purdue Pharma over allegations that its prescription painkiller OxyContin was creating addicts and harming the state's Medicaid program. Purdue Pharma settled for $10 million, with more than $3 million going to outside counsel hired by McGraw to pursue the case.

The rest is being spent by McGraw, whose top aide admitted the settlement was structured in a way that prevented the federal Centers for Medicaid and Medicare Services from claiming its share. The CMS provides nearly 75 cents of every dollar spent on Medicaid in West Virginia.

The CMS is planning to withhold millions of dollars from its next Medicaid appropriation to the state.

The ad says McGraw is "spending $10 million from a settlement meant to help workers and the elderly, instead divvying it up between his trial lawyer buddies and a fund only controlled by McGraw."

The ad compares McGraw to an old dog who can't learn new tricks. It does not mention McGraw's opponent or the November election, instead urging viewers to "Call Darrell McGraw -- tell him to return the people's money."

In the Gazette report, Chief Deputy Attorney General Fran Hughes said, "Everyone has the constitutional right to face their accusers. We don't get the opportunity to face these people who are spending hundreds of thousands of dollars trying to influence an election.

"We are not going to allow false statements to be used by people who won't reveal who is behind them."

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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