Answers, Accountability — McGraw Must Explain Settlement Process

Bluefield Daily Telegraph, March 22, 2006

West Virginia ’s Attorney General, Darrell McGraw, continues to evade the issue of why his office decided not to structure a consumer action settlement agreement so that the bulk of $10 million in lawsuit funds would go back to the state agencies for whom he served as legal counsel. Attorney General McGraw has avoided answering this question when asked by state legislators and the media, and, his office questions the motives of those asking these questions.

His unwillingness to discuss this issue has prompted legislators from both parties to call for legislation that would provide greater legislative oversight of and limit the discretionary powers of the West Virginia Attorney General’s Office. Several lawmakers have stated that the Attorney General is exceeding his constitutional authority.

The outcry centers on a $10 million settlement of a lawsuit filed in 2001 on behalf the West Virginia Department of Health & Human Resources, the Public Employees Insurance Agency and the West Virginia Workers’ Compensation Commission (now BrickStreet). Lawmakers argue that disbursement of the OxyContin settlement dollars should not be subject to the sole discretion of the Attorney General.

Recently, Attorney General McGraw decided to provide selective grants from these settlement dollars to various entities, including $500,000 to the University of Charleston and $200,000 to WVU’s Research Foundation. In addition, more than $3 million of this money is going to a handful of outside plaintiff law firms. However, the biggest objection seems to involve the fact that none of these dollars is going back to the agencies that filed the lawsuit.

McGraw’s failure not to structure these settlement dollars to go to these state agencies is unfathomable. Although the lawsuit was filed on behalf of these agencies, it appears that none of the settlement dollars is going back to them. Since they were the clients, how come they are not having a say in how these settlement funds are used?

Two other key issues are at the heart of this battle – whether or not the Attorney General should follow state bidding procedures for outside attorneys and whether the Legislature has the constitutional authority to direct the use of settlement dollars from consumer protection actions.

The West Virginia Chamber of Commerce believes Attorney General Darrell McGraw should be forthcoming with legislators, the media and the general public on this issue. McGraw needs to answer the following questions:

1) Why was the Oxycontin settlement agreement structured so that none of the settlement dollars is going back to the three state agencies who were parties to the lawsuit? How much restitution was sought on behalf of these clients?

2) What is the Attorney General’s process and practice for engaging outside counsel for consumer affairs actions? Why are these services procured without going through any formal notification, request for proposal or bidding procedure, as required of all other state agencies?

3) Why are settlement agreements structured, particularly in the case of the Oxycontin agreement, so that these dollars do not go into the state’s General Revenue Fund for appropriation by the Legislature?

4) How does the Attorney General respond to 2002 report of the West Virginia Legislature’s legislative auditor’s office that calls into question the compensation being paid to outside counsel hired on a contingency fee basis?

5) Why has the Attorney General not changed his practice even after a Kanawha County Circuit Court Judge’s ruled against his office’s practice of hiring lawyers on a contingency fee basis?

The people of West Virginia deserve answers to these questions and an accounting of McGraw’s handling of his lawsuits. The West Virginia Chamber of Commerce is not questioning the merits of the consumer protection legal actions undertaken by his office, but we do question the manner in which McGraw has handled these suits and hired outside attorneys.

West Virginia has taken great strides to make government more open and ethical. Now it is time for Darrell McGraw to do the same and adhere to standards of “sunshine and good government.”

— Steve Roberts, President
West Virginia Chamber of Commerce
Charleston , WV