CHARLESTON – Three bills introduced in the House of Delegates take direct aim at Attorney General Darrell McGraw's office over its use of outside counsel and its disbursement of settlement monies.
The bills, all introduced this week, seek to change West Virginia Code to change how McGraw's office conducts it business. The AG's office has been criticized for its use of outside counsel and for doling out settlement money.
Critics contend that McGraw's office contracts work to attorneys who have donated to his political campaigns. They also say the way he awards settlement monies is something only the state Legislature is allowed to do.
"I think there has been some abuse perpetrated by the AG's office with what he believes is his authority to direct the use of those funds," said Delegate Patrick Lane, R-Kanawha, a sponsor of a few of the bills, including one that essentially wraps all of the proposals into one bill.
"The AG represents the state of West Virginia, which is to say the people of West Virginia. And any lawyer will tell you they don't have the authority to do what they want willy-nilly with their client's money. From a lawyer's perspective, he's walking on thin ice.
"From a Constitutional perspective, he has no authority to distribute any monies. That function is reserve for the legislative branch. Although the AG is a constitutional officer, all of his power and duties are specified by the code. He has no authority but for that authority granted to him by the legislature."
Chief Deputy Attorney General Fran Hughes says Lane's idea of submitting all settlements to the Joint Committee is unconstitutional.
"We're talking about less than 1 percent of the money we bring in that comes completely under our control," Hughes said. "We're the most cost effective constitutional office, and we're one of the few agencies that pays for itself and put generates money back in the general revenue.
We're holding it (the money) in trust for the class of victims that it was intended for … so their problems be addressed. In the OxyContin case, for example, that money was to be used for eradicating abuse of prescription drugs or something dealing with pain management."
She also brought up McGraw's office recent gift to the Clay Center.
"That is attractive (to criticize the AG's office) on first blush," she said. "But that was for a program to allow all schoolchildren to come to Sesame Street's The Body exhibit. It was not for some hoity-toity affair. It was so schoolchildren all across the state could enjoy the experience."
Lane dismisses the AG office's argument.
"They say that the terms of the settlement are dictating what he has to do with the money," Lane said. "First, the client determines if the settlement is acceptable."
That's why his all-inclusive bill -- House Bill 2268 -- would require that the Joint Committee on Government and Finance approve any proposed settlement involving the AG's office while, additionally, providing that any proceeds received in any AG civil action be deposited in the General Revenue Fund to be appropriated by the Legislature.
"They would have a chance at any interim meeting once a month for the committee to sign off on it," Lane said. "It's not proper for him to be entering into settlement agreements and disbursing this money."
House Bill 2268 is an extended version of House Bill 2254, which was introduced by Lane and fellow Delegates John Overington, Ron Walters, Craig P. Blair, Linda Sumner, Tim Armstead and Mitch Carmichael.
The difference is that 2268 also would require that the Attorney General seek bids from private attorneys when seeking outside legal assistance.
"We have to bid out everything else, from paper clips to paper to any services that are provided," Lane said. "And if we're going to be paying these attorneys some percentage, then why don't we bid those out?
"How many attorneys does the AG's office have on staff? And you're telling me there is nobody down there who has the experience and expertise to handle one of these cases? If not, what are we paying them for?"
Lane said he knows the AG's office stance that the outside counsel – called Special Assistant Attorneys General – have to petition the court to receive money. And again, he disputes that argument.
"Any money going to outside counsel is reserved to people of West Virginia," Lane said. "While they (the AG's office) are not writing a check, they're simply paying out of state funds before they are received by the state.
"If AGs across the country had prosecuted their own mass tort litigations such as tobacco and Purdue Pharma … if they would back those attorney fees the settlement would've been in the same range. These big companies are talking only about the bottom line. What is the total amount of the check I have to write? It doesn't matter how many checks they're writing to how many different people. They just look at the bottom line of how much they have to pay.
"On its face, it's troublesome. It just doesn't pass the smell test."
Hughes said the idea of contracting lawyers simply isn't the same as hiring for other services.
"The notion that legal services are not different from other professional services is not valid," she said. "It's not the same as when you're bidding hourly work out. The idea that we would have to go through an RFP process … it's not practical.
"The amount of work that was done on the OxyContin case, for example. It's inconceivable that some lawyers are saying this stuff. People don't understand the number of depositions, the volume of work, the paper needed to do that type of case against a major corporation. And we were the only party that's been successful against Perdue Pharma."
Hughes also called it all one big red herring, saying the state Chamber of Commerce and President Steve Roberts don't talk about what McGraw's office has done for business in the state.
"What the Chamber should be focusing on is that a half a billion dollars of our efforts has gone toward paying the workers' comp debt," she said. "That should have an effect on the state's business climate, right?
"For Steve Roberts to say Judge McGraw is not good for the business climate … it's not right."
Still, Lane said the bids could be structured to limit those who are applying to make sure qualified lawyers are in the process.
House Bill 2239, introduced by Delegates Carmichael and Eustace Frederick, would require the Attorney General's office to comply with certain requirements when entering into contracts for legal services to be performed by persons other than full-time Assistant Attorneys General or other full-time employees of the state as well as modifying current statutes to require greater legislative and executive supervision of these types of contracts.
Toward these ends, the bill includes the following provisions: (1) Requiring the AG to report to the Governor and the Joint Committee on Government and Finance relative to these contracts; (2) requiring the AG to report to the Governor and Joint Committee on Government and Finance upon the conclusion of such services, including a statement of fees involved on an hourly basis; (3) prohibiting the payment of fees to such persons in excess of $500 per hour; (4) requiring the joint committee to study the new provisions and to report recommendations for further changes to the full Legislature before the 2008 session; (5) requiring the AG to submit semi-annual reports to the Governor and the Joint Committee on Government and Finance while requiring the inclusion of information concerning the nature of these contracts; (6) requiring all attorney fees or costs awarded the AG to be deposited into the State Fund; and, (7) requiring that contracts proposed by the AG be approved as to form by the Secretary of State.
Lane said he's hopeful about getting his bill moving.
"Last year, (similar legislation) moved through to the last couple of nights of the session," he said. "Then it fell through there at the end. We'll see."