For years now, WV CALA has been highlighting abuses in the Attorney General’s office. And Attorney General Darrell McGraw’s actions continue to raise serious ethical issues.
Questions are again being raised about McGraw’s handling of state settlement funds, as the Attorney General’s office is spending hundreds of thousands of dollars in state funds on advertisements which promote McGraw’s name as he simultaneously runs for re-election.
McGraw’s misuse of state settlement funds has been rejected by the federal courts. And as a result of McGraw’s actions, West Virginia could lose millions in federal Medicaid funding for elderly and disabled citizens.
WV CALA will continue to monitor the actions of Attorney General Darrell McGraw in an effort to prevent McGraw’s continued waste of public funds.
AG McGraw’s Questionable Lawsuit Settlements Could Cost State $3 Million in Medicaid Funds
In a much-anticipated legal decision, a three-member panel of the Fourth Circuit Court of Appeals has unanimously rejected a scheme by Attorney General Darrell McGraw’s office to withhold millions of dollars in Medicaid reimbursements from the federal government. As a result of the ruling, West Virginia will likely lose more than $3 million in medical assistance for vulnerable state residents.
In 2004, Attorney General McGraw settled two separate lawsuits with pharmaceutical companies who allegedly overinflated the prices of prescription drugs paid for by several state agencies under the federal Medicaid program. But instead of returning millions of dollars in settlement funds to the proper plaintiff state agencies, the Attorney General’s office intentionally withheld much of the settlement money in an attempt to avoid legally required reimbursements to the federal government. The Fourth Circuit Court of Appeals unequivocally rejected McGraw’s scheme
The Fourth Circuit’s ruling raises serious questions about Attorney General Darrell McGraw’s handling of state settlement funds. Under the Purdue Pharma settlement, McGraw’s office admittedly withheld money from its state agency clients in an effort to avoid obligations to the federal government, even though the heads of the state agencies stated that they expected to be paid under the settlement agreement. As Deputy Chief Attorney General Fran Hughes noted at the time, “We have arranged a methodology that has prevented the federal government from coming back and seizing money.” Clearly she was wrong.
Instead, the private lawyers appointed by Attorney General McGraw to pursue the case – who were linked to nearly $50,000 in McGraw campaign contributions – reaped more than $3.5 million in legal fees. The remaining settlement funds went into Attorney General McGraw’s own Consumer Protection Fund, and have been spent on McGraw’s pet projects. And the West Virginia Department of Health and Human Resources finds itself short more than $3 million in federal Medicaid funding.
Sadly, this is yet another example of Attorney General McGraw’s willingness to abuse his office in an effort to enhance his own political power and the pocketbooks of his campaign contributing personal injury lawyer friends. To date, none of the plaintiff state agencies have taken any action against the Attorney General to recover the money that is owed to them. Nor have state lawmakers made any effort to put a stop to Attorney General McGraw’s abusive actions.
It’s about time our state lawmakers got to the bottom of this mess. McGraw’s improper actions have now cost our state millions of dollars in Medicaid funding, and perhaps hundreds of thousands more in unspecified legal expenses. All so the Attorney General could waste our precious tax dollars for his own self-promotion.
WV CALA Highlights Possible “Pay-to-Play” in Attorney General’s Office
WV CALA’s detailed research of publicly available campaign finance reports has recently revealed that two private law firms appointed by Attorney General McGraw to a potentially lucrative state legal contract gave $11,800 in large campaign contributions to McGraw during last campaign. In total, the two firms have given $62,800 in large contributions to Attorney General McGraw’s election efforts over the years.
Just last election cycle, four law firms appointed by Darrell McGraw to pursue litigation against two major credit card companies were awarded $3.9 million in legal fees, despite failing to specifically account for the number of hours they worked. Two of the four firms appointed to handle the case were McGraw campaign contributors, with one firm holding a fundraiser for the Attorney General while their motion for millions in fees was still pending. Court filings showed that the resulting attorneys’ fees could have been in excess of $3,000 per hour.
And private attorneys were later appointed by McGraw’s office were awarded $6.75 million in fees as part of a state settlement agreement with Eli Lilly & Co. Those firms have yet to publicly disclose the amount of work they performed on the case.
WV CALA has questioned the lack of public accountability in all three cases. At present, the Attorney General’s office does not publicly bid contracts for legal services, or actively disclose to the public how attorneys were selected. Private lawyers appointed to represent the Attorney General’s office have often failed to disclose the specific number of hours they worked on a case, or even their method for splitting fees amongst appointed firms.
WV CALA will continue to serve as a watchdog over abuses in the courtroom and seek transparency to ensure the public knows who is being hired by the state and for what terms. The Attorney General’s backroom deals are a throwback to the era of unchecked political bosses and need to be ended if West Virginia is going to grow and prosper.