Graham's IRA should be unlocked, McGraw says

By Chris Dickerson | Feb 28, 2008

Graham, right


CHARLESTON – Attorney General Darrell McGraw has stepped into the debate over Bob Graham's IRA.

Last week, McGraw filed papers with the state Supreme Court saying that Graham's Individual Retirement Acccount (IRA) should be used to provide services to senior citizens in Wyoming County.

Graham was the CEO of the Wyoming County Council on Aging before he was convicted in 2006 of embezzling funds from the Council and cashing in accrued sick leave without approval of the Council's Board of Directors.

McGraw filed the documents on behalf of all statewide elected officials. Graham's attorneys had asked the court to release his IRA, which is under a freeze order from Kanawha Circuit Judge Charles E. King Jr. The IRA, funded by the Council, was one of Graham's many lucrative fringe benefits. The Council received state and federal funds to provide services for seniors.

Grahm was the target of a lawsuit brought by the state alleging he received excessive compensation and should pay it back. Graham's attorneys sought to release the IRA so he could pay their fees of about $200,000. The IRA was worth about $300,000 in 2006.

When King refused the attorneys' request to unlock the account, they petitioned the Supreme Court. Graham's petition says the state has no right to require Graham to return the money to the Council on Aging because it has not asked to be repaid.

In his response, McGraw says nonprofit charitable corporations receive tax exempt status because they perform services that would otherwise be the responsibility of the government. When their funds are used for the personal enrichment of their officers, the public loses the value of those services and has a right to demand that such misappropriated funds be returned and used properly.

McGraw says attorneys general in some states can sue for the return of such funds. That issue hasn't been decided here.

"Given the public perception, and likely reality, of widespread abuse of taxpayer-funded nonprofit corporations, this is an important question," Senior Deputy AG Silas B. Taylor wrote in McGraw's response said. "There are some fine people that work for that organization and they could put that money to good use for our seniors."

Calls to McGraw's office for futher comment were not returned.

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