CHARLESTON – 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 AG Darrell 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 warchest. 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.
The appointments drew the ire of West Virginia Citizens Against Lawsuit Abuse.
"Perhaps the Legislature will soon rein in Darrell McGraw's abuse of power with a Sunshine law to make him accountable for his questionable ethics in hiring cronies," WV CALA Executive Director Steve Cohen said. "Voters could well decide this fall that replacing him will help improve West Virginia's reputation for legal fairness so our state will be attractive for jobs."
State Auditor Glen Gainer told the Charleston Gazette that the VALIC investigation has been going on for months.
"We're looking at whether or not there were any violations committed in regard to our laws in West Virginia regarding securities and investment advisers," Gainer told the Gazette's Phil Kabler.
Bell & Bands and The Webb Law Firm, both in Charleston, filed a class action last month in Marshall Circuit Court against VALIC, alleging sales representatives duped Teacher Defined Contribution participants into investing in safer annuities rather than in riskier stocks and bonds.
McGraw's use of Special Assistant AGs has drawn criticism before.
Some have complained that these attorneys he's appointed to serve as Special Assistant AGs have made significant contributions to his political campaigns.
Legislation to tightened the belt on the AG office's contracts with outside attorneys have been introduced, but never passed.
In 2006, McGraw's office terminated the January appointments of Weirton attorneys M. Eric Frankovitch and Michael Simon as Special Assistant Attorneys General in a case they already were working as private attorneys. The companies involved had filed a suit claiming McGraw overstepped his boundaries when he appointed the Weirton attorneys to be Special Assistant AGs.
In January 2007, the state Supreme Court refused to hear an appeal of an order involving the use of the Special Assistant Attorneys General in that case. Justice Brent Benjamin was the lone Justice to vote to hear the appeal.
Chief Deputy AG Fran Hughes has, in the past, dismissed the claim about the office appointing special assistant AGs on the basis of campaign contributions.
"Any judicial officer receives contributions from the bar, but Attorney General McGraw does not appoint special assistant attorneys general based on campaign contributions," Hughes told The Record in 2006.
Another criticism about McGraw's use of outside counsel is the fact that the jobs aren't put up for bid.
Hughes dismisses that notion as well in 2006, calling the process "not tenable."
"Think of the terms," she said. "We don't know how long we want you to work, or how much it will cost you, or how much you'll be paid. The attorneys selected are highly skilled, and have the capital and the infrastructure to try large cases."