Paid for by Lewis For Attorney General
News
Thursday February 7, 2008
Ad targets McGraw over settlement spending
by Justin D. Anderson
Daily Mail Capitol Reporter
West Virginia Attorney General Darrell McGraw's spending of millions in settlement money from a drug
company has spawned a critical television ad paid for by two state business groups and a growing
uproar in the state Legislature.
McGraw's office contends the money is being spent properly and that the ad is not as noble as it
sounds. The office says it's an obvious political attack in an election from the very businesses McGraw
takes to court.
"There's a saying that you don't need a weatherman to know which way the wind blows," said Deputy
Attorney General Fran Hughes.
The state Chamber of Commerce and Business and Industry Council are spending "several hundreds
of thousands" of dollars on a television ad appearing statewide that criticizes McGraw for spending
money that the groups say belonged to state workers and Medicaid.
The money at issue was garnered from a 2004 settlement with Purdue Pharma, the makers of the
highly addictive painkiller OxyContin.
The money has been paid in four installments to McGraw's office, which in turn has handed it out
mostly to day report centers and to help pay for a new pharmacy school at the private University of
Charleston.
McGraw's office has always maintained that this is how a federal judge wanted the money to be spent --
on substance abuse-related programs.
The ad says: "A $10 million settlement that belonged to the people of West Virginia was instead divvied
up between the attorney general's office and McGraw's trial lawyer friends. The Wheeling Intelligencer
says legislators should have put a leash on McGraw long, long ago."
The ad goes on to urge state residents to contact his or her lawmaker and demand something be done.
Neither of those opposing McGraw in this year's election - Republicans Dan Greear and Hiram Lewis -
is mentioned in the ad.
"Our argument is that if the attorney general wins money in lawsuits on behalf of state agencies, he
should return that money to the state agencies," said Steve Roberts, the state chamber's president.
Roberts said the business groups are likely to run the ad throughout the rest of the regular legislative
session, which ends March 9. The goal is to get lawmakers' attention, Roberts said.
Hughes called the ad "misleading" and "irresponsible."
"For the chamber to say we're out hurting Medicaid and the elderly is a blatant attempt to affect the
election," she said. "It's not accurate. How have we done anything but help the state of West Virginia?"
Hughes said neither the state chamber of the business council have any stake in state Medicaid.
Roberts countered, saying: "We represent the largest taxpayers in the state. We also represent health
care providers. And so it seems to me that we have a pretty clear interest in an obvious good
government issue."
But some lawmakers say McGraw's spending of the money has gone far enough.
Delegate John Doyle, D-Jefferson, and Senator Roman Prezioso, D-Marion, say a looming threat from
the federal government to withhold about $4.1 million in Medicaid payments has added a new urgency
to the situation among lawmakers.
The state Public Employees Insurance Agency, Department of Health and Human Resources and the
former Workers' Compensation Fund were plaintiffs in the lawsuit McGraw's office filed against Purdue
Pharma.
Last year, the federal Centers for Medicare and Medicaid Services notified the state that it intended to
withhold payments to Medicaid because it saw none of the settlement money as reimbursement.
Part of the lawsuit alleged that the state Medicaid program overpaid for unnecessary OxyContin
prescriptions to addicted patients. The federal government provides about 75 percent of the state
Medicaid budget.
At least one lawmaker -- Sen. Jesse Guills, R-Greenbrier -- has asked McGraw to set aside the
remaining settlement money - about $1.6 million - in case the state ends up owing the federal
government.
McGraw has refused to do this, citing the estimated $2 billion his office garnered for the state through
its work. McGraw has said the onus is on lawmakers to come up with the money.
Doyle and Prezioso -- both members of the House and Senate finance committees -- believe if the
federal government shortchanges state Medicaid, the money to make up the difference should come
out of the attorney general's budget.
McGraw's office is currently appealing the action.
"This is my particular budget, so I've got some grave concerns about what's going on," said Prezioso,
who chairs the Senate Health and Human Resources Committee.
Prezioso said the settlement money should have gone back to the agencies that were plaintiffs in the
lawsuit. He said the way McGraw has handled the money is "absolutely wrong."
"The money should have gone back to those particular agencies to make whole a wrong that was
done, not given to the University of Charleston for a pharmacy program," Prezioso said. "My opinion is,
if there's a $4 million payback to (the federal government), then it's going to come out of the attorney
general's budget, not out of the state budget."
Doyle said the Legislature has the constitutional authority to appropriate settlement money garnered
by the attorney general.
"This violates the constitution of West Virginia and I think probably just about every state," Doyle said.
Doyle said he believes there's a trend occurring in which attorneys general direct judges on how to
order settlement money to be spent so the official can spend the money and gain political capital for
elections.
"I think that's actually how (New York Gov.) Elliott Spitzer got elected," Doyle said.
Spitzer was formerly the state's attorney general.
Doyle said some lawmakers have tried to stop McGraw, but haven't garnered enough support in the
Legislature.
"It's a case of not being able to get enough legislators to realize the seriousness of the situation," Doyle
said. "I guarantee you a big majority on the finance committee considers this to be a serious problem.
But that's not yet a majority in the House of Delegates."
Hughes said McGraw's office is pretty certain it will prevail against the federal government in the
Medicaid appeal. She said if the settlement money had been placed with DHHR or in general revenue,
the federal government would have a nearly certain claim to it.
The state's legal position "would be seriously weakened in terms of the ability of West Virginia to keep
this money," Hughes said.
She declined to discuss the specifics of the state's appeal.
But if the state does end up owing the federal government, Hughes suggested there's always money in
the Rainy Day Fund.
She said lawsuits filed by McGraw have pumped between $250 million to $500 million into the fund.
"Our office is the gift that keeps on giving," Hughes said.
Ad targets McGraw over settlement spending
by Justin D. Anderson
Daily Mail Capitol Reporter
West Virginia Attorney General Darrell McGraw's spending of millions in settlement money from a drug
company has spawned a critical television ad paid for by two state business groups and a growing
uproar in the state Legislature.
McGraw's office contends the money is being spent properly and that the ad is not as noble as it
sounds. The office says it's an obvious political attack in an election from the very businesses McGraw
takes to court.
"There's a saying that you don't need a weatherman to know which way the wind blows," said Deputy
Attorney General Fran Hughes.
The state Chamber of Commerce and Business and Industry Council are spending "several hundreds
of thousands" of dollars on a television ad appearing statewide that criticizes McGraw for spending
money that the groups say belonged to state workers and Medicaid.
The money at issue was garnered from a 2004 settlement with Purdue Pharma, the makers of the
highly addictive painkiller OxyContin.
The money has been paid in four installments to McGraw's office, which in turn has handed it out
mostly to day report centers and to help pay for a new pharmacy school at the private University of
Charleston.
McGraw's office has always maintained that this is how a federal judge wanted the money to be spent --
on substance abuse-related programs.
The ad says: "A $10 million settlement that belonged to the people of West Virginia was instead divvied
up between the attorney general's office and McGraw's trial lawyer friends. The Wheeling Intelligencer
says legislators should have put a leash on McGraw long, long ago."
The ad goes on to urge state residents to contact his or her lawmaker and demand something be done.
Neither of those opposing McGraw in this year's election - Republicans Dan Greear and Hiram Lewis -
is mentioned in the ad.
"Our argument is that if the attorney general wins money in lawsuits on behalf of state agencies, he
should return that money to the state agencies," said Steve Roberts, the state chamber's president.
Roberts said the business groups are likely to run the ad throughout the rest of the regular legislative
session, which ends March 9. The goal is to get lawmakers' attention, Roberts said.
Hughes called the ad "misleading" and "irresponsible."
"For the chamber to say we're out hurting Medicaid and the elderly is a blatant attempt to affect the
election," she said. "It's not accurate. How have we done anything but help the state of West Virginia?"
Hughes said neither the state chamber of the business council have any stake in state Medicaid.
Roberts countered, saying: "We represent the largest taxpayers in the state. We also represent health
care providers. And so it seems to me that we have a pretty clear interest in an obvious good
government issue."
But some lawmakers say McGraw's spending of the money has gone far enough.
Delegate John Doyle, D-Jefferson, and Senator Roman Prezioso, D-Marion, say a looming threat from
the federal government to withhold about $4.1 million in Medicaid payments has added a new urgency
to the situation among lawmakers.
The state Public Employees Insurance Agency, Department of Health and Human Resources and the
former Workers' Compensation Fund were plaintiffs in the lawsuit McGraw's office filed against Purdue
Pharma.
Last year, the federal Centers for Medicare and Medicaid Services notified the state that it intended to
withhold payments to Medicaid because it saw none of the settlement money as reimbursement.
Part of the lawsuit alleged that the state Medicaid program overpaid for unnecessary OxyContin
prescriptions to addicted patients. The federal government provides about 75 percent of the state
Medicaid budget.
At least one lawmaker -- Sen. Jesse Guills, R-Greenbrier -- has asked McGraw to set aside the
remaining settlement money - about $1.6 million - in case the state ends up owing the federal
government.
McGraw has refused to do this, citing the estimated $2 billion his office garnered for the state through
its work. McGraw has said the onus is on lawmakers to come up with the money.
Doyle and Prezioso -- both members of the House and Senate finance committees -- believe if the
federal government shortchanges state Medicaid, the money to make up the difference should come
out of the attorney general's budget.
McGraw's office is currently appealing the action.
"This is my particular budget, so I've got some grave concerns about what's going on," said Prezioso,
who chairs the Senate Health and Human Resources Committee.
Prezioso said the settlement money should have gone back to the agencies that were plaintiffs in the
lawsuit. He said the way McGraw has handled the money is "absolutely wrong."
"The money should have gone back to those particular agencies to make whole a wrong that was
done, not given to the University of Charleston for a pharmacy program," Prezioso said. "My opinion is,
if there's a $4 million payback to (the federal government), then it's going to come out of the attorney
general's budget, not out of the state budget."
Doyle said the Legislature has the constitutional authority to appropriate settlement money garnered
by the attorney general.
"This violates the constitution of West Virginia and I think probably just about every state," Doyle said.
Doyle said he believes there's a trend occurring in which attorneys general direct judges on how to
order settlement money to be spent so the official can spend the money and gain political capital for
elections.
"I think that's actually how (New York Gov.) Elliott Spitzer got elected," Doyle said.
Spitzer was formerly the state's attorney general.
Doyle said some lawmakers have tried to stop McGraw, but haven't garnered enough support in the
Legislature.
"It's a case of not being able to get enough legislators to realize the seriousness of the situation," Doyle
said. "I guarantee you a big majority on the finance committee considers this to be a serious problem.
But that's not yet a majority in the House of Delegates."
Hughes said McGraw's office is pretty certain it will prevail against the federal government in the
Medicaid appeal. She said if the settlement money had been placed with DHHR or in general revenue,
the federal government would have a nearly certain claim to it.
The state's legal position "would be seriously weakened in terms of the ability of West Virginia to keep
this money," Hughes said.
She declined to discuss the specifics of the state's appeal.
But if the state does end up owing the federal government, Hughes suggested there's always money in
the Rainy Day Fund.
She said lawsuits filed by McGraw have pumped between $250 million to $500 million into the fund.
"Our office is the gift that keeps on giving," Hughes said.
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