Legal Newsline

Tuesday, February 25, 2020

W.Va. AG hands out more settlement money

By Chris Dickerson | Mar 1, 2007



CHARLESTON, W.Va. - In a span of two weeks after promising otherwise, Attorney General Darrell McGraw handed out $500,000 in lawsuit settlement money.

On Feb. 22, McGraw's office awarded $220,000 to three county day reports centers.

The money, according to McGraw's office, is from the third installment in the $10 million settlement with Purdue Pharma, the manufacturer of the drug Oxycontin.

Then on Feb. 26, McGraw's office then gave out $280,000 to four county day report centers and another similar private group.

Back on Feb. 12, Chief Deputy AG Fran Hughes told the Senate Finance Committee that the office will stop giving away money from settlements of the state's lawsuits. McGraw's office has drawn criticism over that practice, mostly because the critics say the Legislature is the only state government entity authorized to distribute public funds.

"This is not going to repeat itself in the future," Hughes assured Senate Finance Committee chairman Walt Helmick during the Feb. 12 meeting. "We are not interested in being the center of controversy."

On Feb. 22, according to AG press releases, McGraw's office gave $100,000 to Kanawha County, $75,000 to Wood County and $45,000 to Randolph County. On Feb. 26, he awarded $100,000 to the Mercer County, $60,000 to Putnam County, $60,000 to Logan County, $45,000 to Fayette County and $15,000 to the Redeem Foundation.

"The programs offered through the Day Report Centers and Community Correction Programs include individual counseling, group counseling, gambling abuse assessment, drug and alcohol education, drug testing, parenting education and basic adult education, and job placement. These programs address the specific needs of each individual client referred to the facility," McGraw said in press releases announcing the awards. "Public service projects like day report centers and community correction programs give non-violent offenders, the opportunity to rehabilitate their lives and cuts the escalating cost to counties for the regional jails."

Neither Hughes nor McGraw have returned calls to The Record seeking comment, but in the Feb. 23 editions of the Charleston Daily Mail, McGraw called the criticism of his distribution both political and "picayune."

"I don't comment on your stories," McGraw told a Daily Mail reporter after a Feb. 22 press conference at the Kanawha County Courthouse where he gave county officials their $100,000 for the day report center. "Because the story overstated the issue. I'm not here to talk about the non-appropriated accounts."

Previously the office has given $500,000 to the University of Charleston for its pharmacy school and $30,000 to the Clay Center for a traveling Sesame Street exhibit about the human body.

Last month, Hughes said the AG's office might start appointing committees to determine how the settlement money should be distributed. McGraw told the Daily Mail his office has done that in the past and will do it in the future. But he said that wouldn't always be the case.

"That's not exhaustive and not exclusive," he told the Daily Mail. "You have to adjust as we do these litigations. ... Nothing is written in concrete except that we go after wrongdoers."

McGraw told the Daily Mail the OxyContin settlement an applied trust because the judge ordered the money be used to combat drug addiction. He said giving money to day report centers falls into that category.

"That's where we are on this," he told the Daily Mail. "That's why they create applied trusts. ... In the final analysis, we are simply carrying out legislative policy."

McGraw told the Daily Mail there are hundreds of trust accounts and thousands of fee accounts in state government that are not appropriated by the Legislature. Considering that, he said it is "picayune" to focus on the OxyContin account.

McGraw also told the Daily Mail that the U.S. Chamber of Commerce is behind the criticism of his office, saying that in every case in which his office has recovered money from consumer lawsuits, the defendants in the cases are members of the Chamber. The West Virginia Record is owned by the U.S. Chamber of Commerce.

He also said West Virginia is one of five states targeted by the Chamber.

"It's all politics," he told the Daily Mail.

He also said that in his 16 years as attorney general, his office has recovered $2 billion from "wrongdoers" who have violated state law and has turned over about $1.8 billion to the Legislature for appropriation.

Speaking about the tobacco settlement money that brought in millions of dollars, McGraw told the Daily Mail that he questioned then if it should go into the general revenue fund to be "blown" or if some should be set aside to fund health-related projects. After the Legislature put $500 million in a health education fund, McGraw told the paper that lawmakers later wiped it out largely "to pay the bills of people who had stiffed workers' compensation."

At the Feb. 12 meeting, Helmick, a Democrat like McGraw, told Hughes that the distribution issue would go to court if it was not curtailed. Sen. Roman Prezioso, another Democrat, said the practice raised a constitutional question.

"If you had talked to me, I probably could have found places to use that money," Prezioso said. "The more I read, the more confusing it gets."

Purdue Pharma settlement agreed to pay West Virginia $10 million over four years. The bulk of the money -- including the $1 million from this year's distribution -- has been used to operate the Day Report Centers and help communities fight the scourge of drug abuse that wrecks a community, according to McGraw's office.

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