CHARLESTON -- A state legal reform group supports Republican Attorney General candidate Dan Greear's decision to adopt a outside counsel transparency code of conduct, and encourages current officeholder Darrell McGraw to do the same.
Citizens Against Lawsuit Abuse Executive Director Steve Cohen said last week that Greear made the right call when he said last week that he would implement the code, designed by the American Tort Reform Association, if elected in November.
McGraw doing so, Chief Deputy Attorney General Fran Hughes has said, "would be an exercise in futility."
"Darrell McGraw's questionable ethics don't meet any of these high standards (of the code)," Cohen said. "He hires campaign-contributing cronies in secret deals who reap millions of dollars in legal fees at public expense, and then he recklessly spends lawsuit settlement dollars by essentially converting them into his own political slush fund."
ATRA's code of conduct values disclosure, oversight and accountability in the process of state attorneys general hiring private practice firms to represent their states.
ATRA's contract includes five principles:
* All contracts with outside vendors who perform legal work on behalf of the state would be posted to the Internet for public inspection;
* Contracts for outside counsel should be awarded through competitive bids unless a situation requires the help of someone with specific legal, technical or scientific expertise;
* Contracts should be subject to review by state legislatures;
* Outside counsel working on a contingency fee basis should disclose their hours worked, services performed and fees received from the state unless those disclosures violate attorney-client privilege; and
* If those legal actions allow the state to recover more than $250,000, the money should be placed in the state's treasury unless the settlement stipulates that the funds be allocated in a specific way. Attorneys general should not be permitted to spend those funds at their own discretion.
Hughes previously criticized the ATRA poll that accompanied the release of its code. Its results showed West Virginians were looking for more transparency in the outside counsel-bidding process (full results can be found here).
"Any poll paid for or conducted by ATRA, or one of its other co-conspirators is worthless. You can phrase and ask any question to obtain a specific result," Hughes said.
"ATRA's goal is the political defeat of General McGraw. It is not ATRA's goal to provide the public with unbiased information about what is good for West Virginia consumers, but instead it wants to advance an agenda that is consistent with its own corporate interest."
A couple of outside counsel cases have made headlines recently.
On Aug. 20, attorneys for four firms involved with a settlement between the State and Visa and MasterCard will argue for $3.9 million in fees at a final approval hearing in Ohio County Circuit Court. Members of two of those firms are contributors to McGraw.
The firms representing the State are: Bucci Bailey & Javins in Charleston; Wexler Toriseva Wallace LLP in Wheeling; Hagens Berman Sobol Shapiro LLP in Seattle; and Cuneo Gilbert & LaDuca LLP in Washington, D.C.
Teresa Toriseva donated $844 to McGraw and is the former president of the West Virginia Association for Justice, formerly known as the West Virginia Trial Lawyers Association. Guy Bucci has donated $1,000 to McGraw, running for re-election this year against Charleston attorney Dan Greear.
Much of the settlement -- $11.6 million -- will create three sales tax holidays on appliances that carry the "Energy Star" label and cost $2,500 or less.
The proposed settlement, reached in January, originally called for $12.1 million set aside in a trust account. The lawsuit, filed in Oct. 2003 in Ohio County, alleged the companies violated the state's antitrust and consumer protection laws.
Three of the four attorneys recently appointed as Special Assistant Attorneys General in an investigation into teacher annuities have given the maximum $1,000 contributions to McGraw's re-election campaign.
McGraw appointed Charleston attorneys Jim Lees, Anthony Majestro and James Peterson as well as Jonathan Turak of Moundsville to look into whether the Variable Annuities Life Insurance Co. convinced thousands of teachers and school service personnel to invest in its low interest fixed-rate annuities.
Majestro, Peterson and Turak each have contributed $1,000 to McGraw's campaign. Also, members and family from Peterson's firm gave a total of $5,000 to the McGraw war chest. People at Turak's firm gave a total of $2,000.
Over the years, members of Peterson's firm have given more than $20,000 to McGraw's election efforts. Turak and Majestro's firms have also given to McGraw in the past.
Private attorneys also earned more than $3.3 million of a $10 million settlement with OxyContin-manufacturer Purdue Pharma in 2004. That settlement drew criticism from state lawmakers who were unhappy the State's general fund never received any of the settlement funds.
Instead, McGraw dished out the remaining money to programs and organizations that fight substance abuse.
Cohen disagreed with Hughes' statement in a recent West Virginia Record story that read, "Obviously, Mr. Greear doesn't understand that there isn't anything Attorney General's office does that isn't available to the public. Documents, pleadings, filings - all that we do is in the public domain."
"Darrell McGraw's spokesperson claims everything his office does is public information," Cohen said. "If so, where are the documents showing competitive bidding and negotiated contracts indicating the services, qualifications and contractual payments?
"While most of our state government must operate through an open-bidding process, McGraw's office does its work in the dark of night with secret handshakes with his campaign contributors. What we're talking about here is basic good government principles."