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(Charleston, WV) – West Virginia Attorney General candidate and McGraw challenger Dan Greear was hailed by Citizens Against Lawsuit Abuse (CALA) in a West Virginia Record article yesterday, specifically for his “decision to adopt an outside counsel transparency code of conduct.”

In response to CALA’s encouraging of current West Virginia Attorney General Darrell McGraw to do the same: “McGraw doing so, Chief Deputy Attorney General Fran Hughes has said, ‘would be an exercise in futility.’”

“I continue to scratch my head,” said Greear regarding Hughes’ response. “The bottom line is transparency and disclosure with the spending of West Virginia tax dollars and the appropriation of rewards coupled with common sense litigation is what the people deserve. It’s pathetic McGraw and his cronies call this ‘futile.’ Perhaps because it challenges their own personal self-interest and cronyism.”

Steve Cohen, President of CALA, in response to a recent statement by McGraw’s Deputy Fran Hughes on asserting all aspects of the Attorney General’s Office are public domain, including records: “Darrell
McGraw’s spokesperson claims everything his office does is public information,” Cohen said. “If so, where are the documents showing competitive bidding and negotiated contracts indicating the services, qualifications and contractual payments? While most of our state government must operate through an open-bidding process, McGraw’s office does its work in the dark of night with secret handshakes with his campaign contributors. What we’re talking about here is basic good government principles.”

“McGraw’s Office is saying one thing and doing another. Justice at its worst,” said Greear.

To read the article in entirety, go to http://www.wvrecord.com/news/213935-wv-cala-backs-greearsdecision-to-sign-transparency-code.

Charleston, WV – As displayed in The West Virginia Record on July 25, 2008:

“The question isn’t whether Darrell McGraw took the money, but just how much he took. So said a Washington, D.C., appeals board this month, currently weighing a multi-million dollar dispute between West Virginia’s Attorney General McGraw and the federal agency in charge of funding Medicaid.

The ruling puts state budgeteers on notice: brace yourselves, start looking for places to cut. The McGraw Budget Hole soon will become a Mountain State reality.

At issue are $4.1 million in funds McGraw siphoned away from a state lawsuit settlement for his own use, some very political.

McGraw’s 2004 suit against drug maker Purdue Pharma had promised to recoup Medicaid monies ‘fraudulently’ spent on the company’s products. It succeeded, but when McGraw got the check, the attorney general refused to make Medicaid whole. He kept the money and passed it around to those whom he felt best deserved it.

As readers of these pages know, he spent it not on health care for West Virginia’s poor — paying for hospitals and doctors — but instead for pet projects and to promote Darrell McGraw across the state.

The attorney general handed exorbitant ‘legal fees’ to plaintiff’s lawyers who also are McGraw political supporters. He held press conferences to proclaim his generosity, dishing out much smaller cash grants to dozens of feel-good, non-profit programs.

One grant underwrote a Sesame Street Exhibit at the Clay Center; another funded a pharmacy school at the University of Charleston. That grant got him a plaque on the wall in his honor.

The U.S. Centers for Medicaid and Medicare Services (CMS) originally opened a probe of McGraw’s spending spree after his trusted deputy, Fran Hughes, casually outlined her boss’ sleight of hand during a public hearing.

‘We have arranged a methodology that has prevented the federal government from coming back and seizing money,’ Hughes said in a momentary fit of hubris before a state Senate committee.

Now the federal government has arranged its own methodology.

This one won’t benefit Darrell McGraw’s re-election campaign, but it will cost every West Virginia state taxpayer.

This November, we hope you won’t forget it.”

To read the article in entirety, go to http://www.wvrecord.com/arguments/213899-mcgraws-tab-comes-due.

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FACT:
OxyContin settlements, among others, are lining the pockets of West Virginia Attorney General Darrell McGraw versus being appropriated to the People of West Virginia. The West Virginia Department of Health and Human Services, due to the representation of Attorney General McGraw, gets no OxyContin recovery for its Medicaid fund and will also lose money because of ongoing, frivolous lawsuits.

• The Purdue Pharma lawsuit (State of West Virginia ex rel. Darrell V. McGraw, Jr., et al. v. Purdue Pharma, L.P., et al.) was settled before trial, with the defendants agreeing to pay $10 million to the Consumer Protection Fund of the Office of the West Virginia Attorney General.
  (Source: West Virginia Department of Health and Human Services Appellate Decision in the Purdue Pharma case.)
• “In 2004, McGraw reached a $10 million agreement with Purdue Pharma, manufacturer of the prescription painkiller OxyContin. McGraw represented three state agencies, including the state’s DHHR, in the suit, though he kept the settlement funds for his office. He has used the money on substance abuse programs around the state, as well $500,000 to the University of Charleston for a pharmacy school.”
  (Source: The West Virginia Record, July 23, 2008 – John O’Brien.)
• “Part of the 2004 settlement stipulated that Purdue Pharma could recommend ways the funds could be spent. McGraw has not given any of Purdue Pharma’s causes any of the money.”
  (Source: The West Virginia Record, July 23, 2008 – John O’Brien.)

FACT:
Neither the West Virginia Department of Health and Human Services nor the Centers for Medicare and Medicaid Services (CMS) have received part of this $10 million OxyContin recovery – all funds have lined the pockets of the Office of West Virginia Attorney General Darrell McGraw. This is in no way, shape, or form, a victory for the West Virginia Department of Health and Human Services or the people of West Virginia, specifically those battling substance abuse. The appeal merely said that the Centers for Medicare and Medicaid Services (CMS) hadn’t sufficiently justified the amount it was claiming was due and ordered further proceedings; thus, the lawsuit continues at taxpayer expense, no recovery funds are put to use to the advantage and assistance of the West Virginia people, and Attorney General Darrell McGraw rakes in the dough used for his inefficient and personal interests.

• A court approved settlement was reached in 2004. “In exchange for the plaintiffs releasing all claims against the defendants relating to the marketing and sale of OxyContin, including claims of injury to the West Virginia Medicaid program, the defendants agreed to pay $10 million (in installments) to the Consumer Protection Fund of the Office of the West Virginia Attorney General, with the understanding that these funds would be ‘used by the Attorney General in support of the General Welfare of the People of West Virginia in the following areas only:
  1. Accredited continuing medical education programs directed at the use, abuse, and diversion of prescription drugs;
  2. Law Enforcement Training, Education, and Funding relating to abuse and diversion of prescription drugs; and
  3. Community based drug and diversion education programs.
• “The court subsequently ordered that the plaintiffs’ attorneys fees and expenses be paid from settlement proceeds. These fees and expenses totaled in excess of $3 million. It is undisputed that the State did not share any portion of the settlement proceeds with the federal government.”
  (Source: West Virginia Department of Health and Human Services Appellate Decision in the Purdue Pharma case.)
• “Hughes battled with lawmakers, admitting to the Legislature that the money was not given to the state DHHR because the CMS would then be able to claim a share — ‘We have arranged a methodology that has prevented the federal government from coming back and seizing money,’ Hughes said. Hughes formerly served as general counsel for a national consulting firm that specialized in Medicaid financing. Private practice attorneys hired by McGraw to represent the State earned $3.4 million in the settlement. CMS arrived at its total of $4,143,075 million by taking the 74.65 percent (the rate of federal payment to the state for every dollar spent) out of $5.5 million of the settlement.”
  (Source: The West Virginia Record, July 23, 2008 – John O’Brien.)

FACT:
The West Virginia Department of Health and Human Services Appellate Decision confirms that the Centers for Medicare and Medicaid Services (CMS) are entitled to hold back some amount of funds the West Virginia Department of Health and Human Services would otherwise receive because of the $10 million recovery made in the OxyContin lawsuit against Perdue Pharma. However, not even the West Virginia Department of Health and Human Services has received a portion of the $10 million recovery.

• “The federal Medicaid statute, title XIX of the Social Security (Act), authorizes a program that furnishes medical assistance to certain needy and disabled persons. Act § 1901. The program is jointly financed by the federal and state governments and administered by the states. Id. § 1903; 42 C.F.R. § 430.0. Each state administers its own Medicaid program pursuant to broad federal requirements and the terms of its ‘plan for medical assistance,’ which must be approved by CMS on behalf of the Secretary of Health and Human Services (HHS). Act § 1902; 42 C.F.R. §§ 430.10-430.16. Once its Medicaid plan is approved, a state becomes entitled to receive federal reimbursement, or FFP, for ‘an amount equal to the Federal medical assistance percentage [FMAP] . . . of the total amount expended . . . as medical assistance under the State plan.’ Act § 1903(a) (emphasis added). The term ‘medical assistance’ means ‘payment of part or all of the cost’ of specified care and services provided to Medicaid-eligible individuals. Act § 1905(a). The FMAP is the percentage of the state’s medical assistance expenditures for which the federal government provides FFP. 42 C.F.R. § 433.10. At the time of the OxyContin settlement (December 2004), West Virginia’s FMAP was 75%. CMS Ex. 3.
  (Source: West Virginia Department of Health and Human Services Appellate Decision in the Purdue Pharma case.)

FACT:
Because none of the $10 million recovery was ever received by the West Virginia Department of Health and Human Services Medicaid Office, instead all funds went to Attorney General McGraw’s Consumer Protection Fund; the opinion specifically rejects the argument that the federal government should not receive any recovery funds either.

• “DHHR suggests that it was improper for CMS to claim a share of the settlement proceeds for the Medicaid program if, as DHHR asserts, no part of those proceeds were directly received by the state Medicaid agency but, instead, were paid into the Consumer Protection Fund of the Office of the West Virginia Attorney General.”
  (Source: West Virginia Department of Health and Human Services Appellate Decision in the Purdue Pharma case.)

FACT:
The decision goes on to quote a letter (dated June 5, 2007) written by West Virginia Deputy Attorney General and McGraw’s watch-dog, Fran Hughes, in which she brags the settlement was “purposely structured to avoid the Centers for Medicare and Medicaid Services (CMS) from taking a majority of the money.” The opinion characterizes this plan as a “calculated risk”. The opinion goes on to state that the State of West Virginia has to “bear the consequences of running that risk,” supporting the historical practices of McGraw using every opportunity to line his pockets at the expense of West Virginia taxpayers versus adding transparency and integrity to his existence.

• “In a letter dated June 5, 2007, West Virginia Deputy Attorney General Frances Hughes stated: The Oxycontin settlement was purposely structured to avoid CMS taking a majority of the money. The complaint was brought on behalf of not only PEIA, Medicaid and Workers’ Compensation, but also on behalf of all consumers who have been victimized by Purdue Pharma’s unlawful activities. CMS has no viable claim to the Oxycontin settlement moneys because of how the settlement was structured. . . . While we appreciate [that] there has been a difference of opinion concerning the distribution of this money, we believe that the way the settlement was structured greatly enhances West Virginia’s position and minimizes the chances that CMS will be able to receive any of this money.”
  (Source: West Virginia Department of Health and Human Services Appellate Decision in the Purdue Pharma case.)
• “We have a jaundiced opinion of Purdue Pharma,” Hughes has said.
  (Source: The West Virginia Record, July 23, 2008 – John O’Brien.)

FACT:
In the Purdue Pharma case, West Virginia Attorney General Darrell McGraw argued that the federal
government, the Centers for Medicare and Medicaid Services (CMS), should not receive any portion of the $10 million OxyContin recovery because the part of the lawsuit that contained those claims was without merit and should have been dismissed. However, what merit does Attorney General McGraw stand on when in his preventing the CMS from part of the $10 million OxyContin recovery, he had to prevent the West Virginia Department of Health and Human Services from part of the $10 million OxyContin recovery – as a final and frowning result, preventing the West Virginia taxpayers and those battling OxyContin-related substance abuse from assistance. What West Virginia consumer is McGraw actually protecting? Not the ones who need protected in this case.

• “We have a jaundiced opinion of Purdue Pharma,” Hughes has said.
  (Source: The West Virginia Record, July 23, 2008 – John O’Brien.)/li>

• “The Attorney General’s Office received notice today of a favorable decision in the case of Center for Medicaid and Medicare Services v. West Virginia Department of Health and Human Resources, wherein DHHR had appealed a disallowance of $4,143,075.00 resulting from the State’s OxyContin lawsuit against Purdue Pharma. While upholding the federal government’s right to some equitable share of the settlement roceeds, the United States Department of Health and Human Resources Departmental Appeals Board found that the amount of the disallowance was “unreasonable on its face and that CMS has not articulated sufficient basis for upholding the amount of the disallowance.” The Appeals Board remanded the case to MS with instructions that CMS provide West Virginia with a reasonable opportunity to submit additional evidence and argument. We are pleased by the Appeals Board’s decision,” said Chief Deputy Attorney General Fran Hughes, “because it removes the long shadow cast by the original $4,143,075.00 disallowance and reaffirms most of the arguments we made with respect to allocation of the OxyContin proceeds. Chief Deputy Hughes noted that there is a strong possibility of a settlement with CMS now that the Appeals Board has found CMS’s allocation to be unreasonable and unsupported. The Attorney General’s Office has a sum of money set aside for this purpose and will be in contact with CMS today to begin discussions.”
  (Source: July 18, 2008: Press Release, Office of Attorney General Darrell McGraw.)

View the PDF of the official decision.

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Charleston, WV – In a West Virginia Record article dated July 23, 2008, West Virginia State Attorney General Daryl McGraw’s controversial and infamous OxyContin case is reviewed in transparency, outlining his office’s personal reward of the $10 million recovery and lack thereof to three other involved state agencies which include the Department of Health and Human Resources (DHHR), the Public Employees Insurance Agency (PEIA), and the Bureau of Employment Programs.

“In 2004, McGraw reached a $10 million agreement with Purdue Pharma, manufacturer of the prescription painkiller OxyContin. McGraw represented three state agencies, including the state’s DHHR, in the suit, though he kept the settlement funds for his office. He has used the money on substance abuse programs around the state, as well $500,000 to the University of Charleston for a pharmacy school.”

“I’d like to know what substance abuse programs McGraw used the settlement funds for, including specific types and exact dates such funds were allocated, and that doesn’t include seven-day pill boxes with consumer fraud protection propaganda and McGraw’s name stamped all over them,” stated McGraw challenger and West Virginia Attorney General candidate Dan Greear. “It seems quite simple to me, that in this specific case where we are dealing with a painkiller drug that many West Virginians fall victim to substance abuse, the right thing to do is give the money to the state agencies who help those individuals: the DHHR, the PEIA and the Bureau of Employment Programs, among possible others. Why in the world any decent-minded person and public official with the best interests of West Virginians at heart would add taxpayer expense, such as frivolous litigation, and then prevent the appropriation of funds to necessary state and federal agencies that could assist directly and most efficiently in the OxyContin substance abuse problem, is beyond me. This is just one more example of McGraw’s self-interest and the lack of transparency and integrity in the Attorney General’s Office under his reign.”

The article also states that “Part of the 2004 settlement stipulated that Purdue Pharma could recommend ways the funds could be spent. McGraw has not given any of Purdue Pharma’s causes any of the money.

It also quotes McGraw’s Deputy Attorney General, Fran Hughes: “We have a jaundiced opinion of Purdue Pharma.”

“They apparently have a jaundiced opinion,” stated Greear, “against the taxpayers of best interests of West Virginia – clearly.”

To read the article in entirety, please go to the West Virginia Record’s page.