CHARLESTON -- A statewide legal reform group again is calling on Attorney General Darrell McGraw to give a state agency part of a $10 million lawsuit settlement.

West Virginia Citizens Against Lawsuit Abuse says McGraw should "deliver the share of a $10 million lawsuit he settled that was recovered on behalf of the Public Employees Insurance Agency." PEIA is asking more than two dozen local governments to pay uncollected premiums from as far back as 1996 to erase a $6.65 million deficit.

"Hours after his 2004 re-election, Darrell McGraw settled a lawsuit that was to include $440,000 in restitution to PEIA," WV CALA Executive Director Steve Cohen said. "The $3.3 million in legal fees to the campaign contributing lawyers McGraw hired have already gotten their cash, while hundreds of retirees are still left in the lurch."

WV CALA is urging state Administration Secretary Robert Ferguson to follow the lead of two other entities that have not stood idly by while McGraw converts the lawsuit settlement proceeds to, what Cohen calls, "his own political slush fund."

McGraw "seemingly rewarded those who helped bankroll his campaign machine and he distributes the rest of the $10 million for his own pet projects," Cohen said.

The former heads of two of the state agency plaintiffs named by McGraw in the lawsuit he settled that year stated they never were consulted by McGraw's office about the settlement and raised questions over why their agencies were excluded from sharing in the proceeds.

The settlement proceeds recovered on behalf of, but never delivered to, the state Department of Health and Human Resources has triggered a withholding of matching federal Medicaid funds which could ultimately cost the state millions of dollars.

PEIA's debt resulted from a 2003 billing error, and 25 governments across the state are involved. PEIA did not charge for $6.65 million of employers' portion of premiums due to the state for 264 retirees. PEIA had taken responsibility for the mistake and decided not to bill. But, a 2005 legislative audit said PEIA must collect what is owed.

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