CHARLESTON -- State Attorney General Darrell McGraw has been singled out in a Competitive Enterprise Institute report ranking the nation's worst AGs.
Hans Bader, Counsel for Special Projects at CEI, wrote the report, which was released Wednesday. It names Connecticut Attorney General Richard Blumenthal as the worst and lists McGraw sixth.
"He basically has hired out the office of attorney general to trial lawyers, even though a trial judge's ruling in West Virginia says he can't have contingency fee agreements with lawyers," Bader said.
The report blasts McGraw, first elected in 1992, for several reasons, mostly for steering money into his office and the pockets of trial lawyers.
It also mentions a 1996 lawsuit he brought against the Bureau of Employment Programs that ended when the state paid Thomas Galloway, a trial lawyer appointed special assistant attorney general by McGraw, $2 million to dismiss the suit.
The report scolds McGraw for not defending the state agency, his "most basic duty of his office," and for being non-responsive when the state Supreme Court asked why he wouldn't. It also notes that Galloway contributed to two of McGraw's campaigns.
"The state attorney general is supposed to defend state agencies from suit, not sue them for the benefit of his trial lawyer allies," Bader wrote.
He also writes of McGraw's decision to hire lawyers on a contingency fee to sue tobacco companies in 1995 even though he was specifically told by the judge handling the lawsuit that it was illegal. The lawyers ended up being paid $33.5 million, "including $3.85 million to an attorney who barely did any work."
Chief Deputy Attorney General Fran Hughes was not impressed with the report and said that approximately $500 million from the tobacco settlement has been pledged to help the state's Workers' Compensation debt.
"What I think? It's not worth the paper it's printed on," she said. "If you look at the information, its misleading. It talks about money paid to attorneys representing the state in tobacco litigation but it failed to mention that had those attorneys made zero, the state would not have received a penny more."
The report mentions, too, a $10 million settlement with Purdue Pharma in 2004 where he "decided that he didn't need to turn it over to the state treasury, and has been doling out the dollars himself ever since."
"Out of the settlement, $2 million went to attorneys' fees for McGraw's trial lawyer friends, even though that was contrary to a state court ruling that West Virginia law bars contingency fees to lawyers hired by the state attorney general."
Hughes countered by saying that that the fee was fair and that the intention of the report is similar to the one that the U.S. Chamber of Commerce has. The Chamber owns The West Virginia Record.
"The Purdue Pharma settlement, that was a case that was several years and many depositions. It wasn't like we forced the settlement and they paid us off with $10 million.
"We were the only party ever to make Purdue Pharma pay for their marketing practices of Oxycontin, and that's why Darrell McGraw is being targeted (by the U.S. Chamber of Commerce).
"The people that contributed to Darrell McGraw always were supporters and contributors of Darrell McGraw. We don't consider that when we pick and choose people appointed special assistant attorneys general. We have written criteria that we have provided to The Record, but they have failed to include in any article what we consider when we appoint outside counsel. The people we have appointed fill those criteria."
McGraw was also mentioned in the American Tort Reform Association's 2006 report of judicial hellholes that ranked the entire state as the worst judicial hellhole. The ATRA is also funded by the Chamber.
"I don't think the people of West Virginia are as stupid as the national Chamber thinks they are," Hughes said.
Bader, though, says that outsiders have stamped the state as anti-business.
"The state Supreme Court's pro-plaintiff rulings have helped cement the state's reputation as a 'tort hell' hostile to business," Bader wrote.
Bader was equally harsh on Blumenthal, the longest serving attorney general in Connecticut history. He was first elected in 1990.
"The nation's worst state attorney general is Richard Blumenthal, a tireless crusader for growing the power of his own office and spreading largesse to his cronies," Bader wrote.
Bader focused largely on Blumenthal's role in litigation against tobacco companies, starting with the Tobacco Master Settlement Agreement.
"Wealthy trial lawyers across the nation received $14 billion nationally in attorneys' fees under a $246 billion-plus settlement paid for primarily by smokers -- the alleged victims of the very fraud that begat the settlement," Bader said.
The report says Blumenthal steered $65 million in fees to his own allies and the associates of former Gov. John Rowland, later convicted of corruption in an unrelated matter.
It adds that Blumenthal went "through the motions" of soliciting letters from firms interested in representing the state in the lawsuit. Of the four he selected, one was his former firm, another's partner was married to a partner in the first firm and a managing partner in the third served as counsel to Rowland.
Blumenthal is also bashed for a lawsuit he filed on behalf of several other states against out-of-state utilities for allegedly contributing to global warming.
"Blumenthal himself admitted that his goal was to 'shake up and reshape the way an industry does business' across the nation," Bader wrote. "Since when is that the role of a state official?"
During an interview, Bader said that Blumenthal's recent aggressiveness against insurance companies did not contribute to his ranking, but it may in future lists.
"That's something that did not factor, but it may strengthen the case in the future," Bader said. "In a sense, that's the icing on the cake."
Blumenthal did not return a message seeking comment.
The three individuals following Blumenthal on the list are no longer in office. Former California AG Bill Lockyer (now the State Treasurer) is ranked "a close second" for neglecting "to enforce state laws against favored in-state campaign donors, even as he forced out-of state businesses to live by California rules."
The report says Lockyer refused to enforce state election laws against an Indian tribe that ran a casino even though the California Fair Political Practices Commission concluded that it did violate state campaign laws. The tribe had given Lockyer $175,000. The report also criticizes Lockyer for joining Blumenthal's global warming lawsuit.
Third is former New York AG Eliot Spitzer (now governor), largely because "He specialized in using lawsuits and threats of indictment to force businesses to enter into costly settlements that regulate entire national industries and restrict lawful conduct in other states."
It adds that in 2000 he testified in favor of a $1.25 billion attorneys' fee request by lawyers who brought New York's copycat lawsuit against tobacco companies. The attorneys were only hired after Mississippi and Florida had already won billions of dollars and Bader feels their presence was unnecessary to win New York's case.
They ended up with $625 million, an hourly rate of $13,000.
Spitzer also sued Western Union Co. because "foreign swindlers were covertly using telegrams to engage in wire fraud scams."
Fourth is former New Jersey AG Zulima Farber, who resigned in Sept. She had taken office just nine months earlier even though court records showed she had 13 speeding tickets, three license suspensions and two bench warrants seeking her arrest.
"Farber admitted to being embarrassed by her record, joking that it might take psychoanalysis to learn why she behaved as she did," Bader wrote.
Patrick Lynch of Rhode Island rounds out the top five for employing trial lawyers who contributed to his campaign to work on a lead-paint nuisance suit.
"Moreover, the lead paint companies, which were from out of state, were held liable to Rhode Island without any proof that the lead paint they sold ended up on any buildings currently standing in Rhode Island," Bader wrote.
Vermont AG William Sorrell is seventh, mostly for having his state's legislature to "change the law to make tobacco companies retroactively liable for the state's Medicaid bills, irrespective of their individual guilt or innocence of fraud toward smokers."
Illinois AG Lisa Madigan is ranked eighth. She "is an enthusiastic proponent of dragging out-of-state businesses into Illinois courts over lawful business practices that occur outside her state's boundaries," the report says.
Former Wisconsin AG Peg Lautenschlager is ninth. The report cites an incident where she drunkenly drove a state car into a ditch after misappropriating it for her own personal use.
"While busy bringing meritless suits against out-of-state businesses, she allowed the backlog at the Wisconsin state crime lab to triple to well over 1,000 cases, leading to a delay in apprehending a rapist who went on to murder a Wisconsin State Department of Justice Agent," the report says.
Tenth is Tom Reilly of Massachusetts, noted in the report for filing a global warming suit of his own and playing a leading role in the $8 million Western Union settlement.
The rankings were based on a criteria like encroachment on the powers of other branches of government, interfering in the affairs of other states or federal agencies, encouragement of judicial activism and frivolous lawsuits and favoritism towards campaign contributors.
CEI is a nonprofit public policy organization that is "dedicated to advancing the principles of free enterprise and limited government."