W.Va. delegate seeks to reform AG practices

John O'Brien Feb. 4, 2010, 9:11am


CHARLESTON, W.Va. (Legal Newsline) - A West Virginia Republican lawmaker has introduced a bill that would require funds gained through litigation by the state Attorney General's Office to be placed in the General Revenue Fund.

Del. Patrick Lane's House Bill 4242 would also require the attorney general obtain the approval of the Joint Committee on Government and Finance for any settlement. It would also force the attorney general to seek bids from private lawyers seeking state work.

Lane told the Charleston Gazette that the bill is a response to practices by current Attorney General Darrell McGraw.

"The attorney general's a lawyer, and he has a responsibility to his client," Lane said in the report. "And as a West Virginian, I don't think he's fulfilling that responsibility."

Lane, 35, is an attorney in Charleston.

The bill provides the following amendment to state code:

"That, notwithstanding any provision of law to the contrary, he or she shall not enter into any proposed settlement in any civil action until the Joint Committee on Government and Finance approves of the settlement: Provided, however, that any proceeds from any judgment or settlement from any such civil action shall be deposited into the General Revenue Fund to be appropriated by the Legislature. In contracting with private attorneys to pursue legal action on behalf of the state, the Attorney General shall seek bids from attorneys licensed to practice in this state and shall contract with the best qualified attorney submitting the lowest bid."

Chief Deputy Attorney General Fran Hughes did not return a message seeking comment, but she said McGraw's office is under attack by the state and U.S. chambers of commerce, and that the bill is unconstitutional, the report says. Legal Newsline is owned by the U.S. Chamber Institute for Legal Reform.

Legislators have pointed to McGraw's handling of a $10 million 2004 settlement with OxyContin-maker Purdue Pharma. More than $3 million went to private attorneys hired to pursue the case, and the rest went to McGraw's Consumer Protection Fund instead of the Legislature's General Fund.

An Oct. 29 decision by the Departmental Appeals Board ruled that McGraw should have paid the federal Centers for Medicare and Medicaid Services its share of the $10 million settlement. It was the second time in 2009 that the Appeals Board ruled McGraw wrongfully kept settlement funds from CMS.

McGraw has used the money from the settlement on substance abuse programs around the state, as well $500,000 to the University of Charleston for a pharmacy school. The withhold will be $2,732,968.

Hughes admitted to the Legislature that the money was not given to the state's Department of Health and Human Resources, which administers the Medicaid program, because CMS would then be able to claim a share -- "We have arranged a methodology that has prevented the federal government from coming back and seizing money," Hughes said.

Hughes formerly served as general counsel for a national consulting firm that specialized in Medicaid financing.

When McGraw divvied up the settlement, he gave DHHR only $250,000 and the other two plaintiff agencies received nothing. Del. Jonathan Miller, a Republican, has asked through a Freedom of Information Act request why the financially strapped Public Employees Insurance Agency, a named plaintiff, is not seeking a share of the settlement.

"There are budgetary issues," Miller said in July. "The attorney general is affecting our bottom line as we're approaching a budget cliff.

"(McGraw) is well known for his antics. That's an issue we've gotta address. If he goes off base and takes these settlements in the wrong direction, it causes problems we'll have to address in the Legislature.

"We haven't really wanted to get too involved with the issue. It's the big elephant in the room."

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

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