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AG McGraw’s Questionable Lawsuit Settlement Costs State $2.7 Million in Medicaid Funds
A Department of Health and Human Services Appeals Board has recently ruled that West Virginia owes the federal government more than $2.7 million in Medicaid funds as a result of Attorney General Darrell McGraw’s misappropriation of lawsuit settlement funds.
In 2004, the Attorney General’s office reached a $10 million settlement with the maker of the drug OxyContin. While the lawsuit was filed by Attorney General McGraw on behalf of three plaintiff state agencies – WV Public Employees Insurance Agency, WV Workers’ Compensation, and the WV Department of Health and Human Resources – McGraw’s clients received nothing under the settlement agreement.
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 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.
While all three plaintiff state agencies expected to recover under the settlement agreement, the Attorney General’s office admittedly excluded them in a failed effort to prohibit the federal government from recovering its share of Medicaid dollars. Specifically, the Departmental Appeals Board found “no merit” to the Attorney General’s arguments, finding that the suit was brought exclusively for reimbursement of the plaintiff state agencies. Consequently, the Centers for Medicare and Medicaid Services has taken more than $2.7 million “from the State’s available Medicaid funds account.”
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.
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 year’s election. In total, the two firms have given $62,800 in large contributions to Attorney General McGraw’s election efforts over the years.
Just last year, 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 this past month, private attorneys 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.
