WV House eyes sweep of AG settlement funds

Morrisey

With West Virginia Attorney General Patrick Morrisey holding onto $8 million from recent lawsuit settlements with prescription drug distributors, state lawmakers are advancing a bill that would require the attorney general to deposit such monies into the state’s general revenue fund.

The House Judiciary Committee approved legislation (HB 3062) — called the State Settlement and Recovered Funds Accountability Act — that mandates Morrisey’s office transfer settlement monies to the state’s coffers every three months if his consumer protection fund exceeds $4 million.

In January, drug wholesalers AmerisourceBergen and Cardinal Health agreed to pay the state a combined $36 million to settle a lawsuit filed by former Attorney General Darrell McGraw in 2012.

The Department of Health and Human Resources, along with the Department of Military Affairs and Public Safety, each put their share of settlement funds into a special account — set up at the State Auditor’s office — that must be used for drug treatment and enforcement, according to the settlement agreement.

The settlement states, “The trust account shall not be subject to general revenue fund appropriation for the state of West Virginia.” In other words, the Legislature can’t steer the settlement monies to help plug the state’s budget shortfall — or for anything else.

House lawyers believe that prohibition may have violated the state constitution. The bill would block the attorney general from signing off on similar language in the future.

The bill’s directives also apply to other statewide officeholders — such as the secretary of state, agriculture commissioner, treasurer and governor — as well as state agencies, but only the Attorney General’s Office is mentioned by name.

A Morrisey spokesman did not respond to a request for comment Monday.

Morrisey plans to deposit his $8 million share of the drug settlement money into his office’s consumer protection fund, according to the settlement agreement filed in Boone County Circuit Court. The agreement allows Morrisey to use the funds for “direct and indirect” administrative costs, investigations or to hold the funds “for appropriation by the Legislature” and distribution to consumers.

On Friday night, House Democrats proposed changes to the bill that would require Morrisey to deposit his $8 million into a Treasurer’s office account with a stipulation that the funds only could be used for drug treatment and prevention.

House Judiciary Committee members rejected the amendment. Republican legislators voted against the proposal, saying the bill wasn’t the right place to dedicate the funds for drug treatment.

The legislation also creates an Attorney General Administrative Fund, which will collect any attorneys fees awarded to Morrisey’s office from lawsuits. The attorney general would control the fund.

In addition, the bill requires the attorney general to deposit any settlement monies designated as consumer refunds into a new account called the Consumer Protection Restitution Fund.

The bill next moves to the House Finance Committee.

Reach Eric Eyre at ericeyre@wvgazettemail.com, 304-348-4869 or follow @ericeyre on Twitter.

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