CALA accuses McGraw of lying to Legislature

By John O'Brien | Feb 20, 2008



CHARLESTON - Exactly who state Attorney General Darrell McGraw was representing in a 2001 lawsuit has become the subject of much debate.

Now, a legal reform group is saying that McGraw lied to the state Legislature when he claimed he simply represented the entire state in the suit, which led to a $10 million settlement with OxyContin-manufacturer Purdue Pharma.

"Court documents clearly show that McGraw and the personal injury lawyers he appointed were the only lawyers for the plaintiff state agencies," said Steve Cohen, West Virginia Citizens Against Lawsuit Abuse's executive director.

"In fact, he was actually required by the judge to amend the original complaint to indicate that the three agencies were plaintiffs. McGraw was not being truthful with legislators when he said his office did not represent the agencies."

McGraw originally filed the complaint in McDowell County, listing himself on behalf of the State as the lone plaintiff. Purdue Pharma, in its motion for dismissal, said its arguments would be moot if that were the only plaintiff named.

McDowell Circuit Judge Booker Stephens told McGraw he needed to add plaintiffs if he wanted to keep the suit alive.

Before the House Budget Committee last week, Cohen says McGraw denied representing any state agencies when asked if he consulted with the three named plaintiffs about the settlement.

The Department of Health and Human Resources, the Public Employees Insurance Agency and the old Workers' Compensation system "were not consulted and were not given restitution from the settlement
McGraw reached days after his 2004 re-election," Cohen said.

In meeting with the Senate Finance Committee last month, McGraw and Chief Deputy Attorney General Fran Hughes admitted that they eventually listed the three state agencies as plaintiffs.

"We had several named plaintiffs in the lawsuit," McGraw said.

"Our focus changed," Hughes said of the case. "When it was first filed, we had a different approach."

Still, none of the agencies received any of the money.

Sen. Jesse Guills, R-Greenbrier, then asked McGraw if any of the attorneys representing the state agencies were involved in the settlement.

"We had had many Attorneys General offices before us," McGraw replied. "None succeeded. We were going to trial that morning. Literally, it was settled that day."

The federal Centers for Medicare and Medicaid Services, which supplies about 75 cents of every dollar the State spends on Medicaid, has notified the state's Department of Health and Human Resources that it will be withholding $4.1 million in Medicaid funds because it does not believe it was given what it was owed from the settlement. That withhold is being appealed.

Hughes admitted that not giving the money to the DHHR was an intentional way around keeping the federal government from claiming any of the settlement.

McGraw has used much of the $10 million settlement on substance abuse programs and also gave $500,000 to the University of Charleston for a pharmacy school. Cohen calls it a "political slush fund."

CALA also said coming budget cuts could be resolved if McGraw provides restitution to the state agencies involved in the OxyContin suit. Purdue Pharma will pay the final $2.5 million installment this year.

Hughes, who could not be reached for immediate contact, has criticized CALA, claiming it masquerades as a grassroots organization but is actually funded by "large out-of-state corporate interests."

"It works its sophisticated deception aimed at duping West Virginians into believing that only by giving up their rights to access to the courtroom can the State have economic development," Hughes wrote in a letter last June. "Unchecked and unfettered corporate power accountable only to shareholders is the real threat to fairness for all citizens."

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