Debate between Hughes, Cohen continues

Chris Dickerson Oct. 28, 2008, 7:59am

Fran Hughes

Steve Cohen

CHARLESTON, W. Va. (Legal Newsline) - The war of words between Darrell McGraw's top aide and the executive director of a statewide legal reform group continues.

Chief Deputy Attorney General Fran Hughes and Steve Cohen of West Virginia Citizens Against Lawsuit Abuse squared off on the Oct. 25-26 edition of "Decision Makers," a weekly talk show hosted by Bray Cary and broadcast on West Virginia Media Holdings stations across the state.

After Cohen was critical of what he called stonewalling on the part of the Attorney General's office in responses to Freedom of Information Act requests, Hughes invited him to the office to look at documents.

"We have sought information, your newspaper (The State Journal) has Bray, for an accounting and we've been nothing but stonewalled, which is a violation - it's a criminal violation," Cohen said. "And it's coming from the Attorney General's office."

Hughes countered.

"First, I want to refute Mr. Cohen's statement that we haven't provided him with any documents," she said. "As far as I know, there has been a request for money that has been expended from our consumer protection fund. That has been delivered. To suggest we've done anything criminal is irresponsible. ...

"They are criticizing our office ... that we do not provide them with information. You can come into my office. I invite you today to come to the office. Any document that you want to see, you will be able to look at. We are a public office."

A good part of the broadcast debate -- as well as the rest of the debate that was posted online - focused on the $10 million Oxycontin settlement of 2004.

"A $10 million settlement reached just hours after the attorney general was re-elected in 2004 - the first cut went to campaign contributors to Darrell McGraw's political machine," Cohen said. "They delivered more than $40,000 in campaign cash to him. They were hired in this case. They collected $3.3 million when the suit was settled.

"The remaining amount of money has yet to be delivered to the plaintiffs Darrell McGraw named in those cases. They have been converted into a political slush fund for Darrell McGraw to distribute for his pet projects. That's an abuse."

Hughes said the AG's office can't ask taxpayers to risk millions of dollars on "cutting-edge, pioneering litigation" with the risk of no payoff.

"For instance, in the Purdue Pharma case, we were the first party in the country to make Purdue Pharma pay for their unlawful activities," she said. "That case cost $462,000 to get ready for trial. You can't ask taxpayers, 'We need this money. We might be successful. We might not. You'll get a return on your money, maybe, in five years.

"So we've used the private sector, and very successfully. The proof is in the pudding. Obviously, we've chosen the most capable of attorneys because they've succeeded."

Hughes also defended how McGraw's office was charged with distributing the settlement money rather than turning it over to the Legislature. She said 99.9 percent of the money McGraw has brought into the state since he became AG has been turned over to the Legislature.

"There have been very few instances when we've been able to direct the money," she said. "Sometimes you have cases where you cannot readily and easily and cheaply identify who the individual victims are. But you know there is a class of victims. And in the Oxycontin case, the major plaintiffs in the case were people and families who suffered because they (family members) became unwittingly addicted to Oxycontin.

"We had almost four years of really intense discovery in the case. We discovered the state agencies' losses were minimal. We, at the insistence of the defendants, on the morning of trial settled the case. The terms were at the insistence of the defendants."

Cohen continued his attack.

"The fact is Darrell McGraw named three plaintiff state agencies (DHHR, PEIA and Workers' Compensation) in that case," he said. "He has not delivered restitution to them. And the damage to West Virginia is - take Secretary Walker's agency, for example ... the federal government is withholding a federal Medicaid match. And the Attorney General didn't consult with the heads of these agencies when he settled."

"Not true. Not true," Hughes responded. "They had representation there."

Greg Burton at Workers' Comp and Tom Susman at PEIA have both said they were never consulted," Cohen said. "And once the Attorney General settled the case, he didn't deliver the money to the plaintiffs he named.

"In private law practice, that would be grounds for disbarment and worse. Here, we have the chief legal officer of the state doing the identical thing. And he needs to be held accountable."

The back-and-forth continued.

"Can Darrell McGraw identify the representatives from the three plaintiff state agencies he named in this lawsuit who signed off on this agreement?" Cohen asked Hughes.

"They had legal representation," she said.

"Do they have names?" Cohen asked.

"What do you ... I don't understand ..." Hughes responded.

"Darrell McGraw claims that the three plaintiff state agencies he named in this lawsuit were represented in the settlement.," Cohen replied.

"I can give you their names," Hughes said. "They did not sign the settlement agreement, but they were there had they objected. In fact, we invited ... there wasn't one pleading that we filed, anything that wasn't shared with any of the name plaintiffs. Unfortunately, we discovered as we engaged in discovery that the damages to the state agencies was minimal. You do that sometimes. You file a lawsuit and you think it looks one way. And when you get into it, it starts shaking up to be different than what you originally thought."

"So the plaintiffs had no input in the settlement is what the Attorney General is saying?" Cohen asked.

"No, that's not true," Hughes said. "That's not what I said. I said they didn't sign the settlement order."

Cary then intervened.

"Actually, what you said was they didn't object," he said to Hughes. "To me, there is a difference between concurring, going along with and approving versus not objecting. Because one is just a lack of action, and if you didn't ask you wouldn't get an objection. I guess what Steve -- and I'm trying to understand -- did the Attorney General's office contact the head of the three agencies and ask them if they were in agreement with the settlement or was it just either communicated with them or sent to them?"

"They had legal representation there that were informed," Hughes replied.

"So you took their lack of saying anything as approval?" Cary asked.

"No, that's not what happened," she said. "They had legal representation at the settlement hear ..."

"People you appointed, right?" Cary asked.

"No, their own," Hughes said.

"And this is where we need to probe," Cohen chimed back in. "We need to know ..."

Cohen then asked Hughes who these people are.

"But these are public officials," Cohen said. "Do they have names?"

"Yes, they do."

"May we hear them?"

"Let's see, Health and Human ..."

"Secretary Walker's agency, who did she send to the settlement hearing?" Cohen asked.

"She had her general counsel there, a woman by the name of Susan ... I forget her last name," Hughes said. "Workers' Compensation had Kim Stitzinger-Jones, who was their legal representative. And they were consulted throughout the negotiations.

"They didn't sign the settlement order because, under the law, they couldn't. They weren't appointed as Special Assistant Attorney Generals, they weren't going to be involved in the trial. But they were there, and they were consulting."

Hughes continued, saying she found it "highly unusual" that Workers' Comp officials complained because that agency's damages were "so minimal."

"And that fact that those same officials, who are now running (the privatized company) BrickStreet, through the work product of the Attorney General's office, were provided $32 million to transition from a workers' compensation system to BrickStreet," she said. "And yet, they still are criticizing the Attorney General's office. We're the gift that keeps on giving."

Cohen continued his criticisms.

"Four years after the settlement of this case, we still don't know how much is going to be delivered to that agency, or any of the three agencies," he said.

"I can tell you," Hughes said. "We delivered to the DHHR, that's another mischaracterization. They were given money. They were given $254,000. Again, if you would read some of the documents, you would know this information."

"Then why is the federal government withholding millions in Medicaid reimbursement?" Cohen asked.

"Well, again, the administrative tribunal said that what CMS did was unreasonable and not based on evidence," Hughes replied.

Cary then chimed in again, saying that earlier this month when McGraw was on "Decision Makers," the AG said his office "had it covered."

"I didn't quite understand what that meant," Cary said.

"We have not spent that money that we believe that, if the case goes forward," Hughes said. "One, we object that they're entitled to any money. But if, in fact, they are able to obtain any claim, it has to be based on the evidence. And we've set aside the money to pay that claim."

Cary asked where the money sat aside came from.

"From the Oxycontin settlement," Hughes said.

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