CHARLESTON, W.Va. (Legal Newsline) - The group that's advertisements have infuriated West Virginia Attorney General Darrell McGraw started challenging the state's campaign laws earlier this year.

The Center for Individual Freedom filed a complaint in March in federal court, hoping to overturn laws that require groups that spend a certain amount of money on election ads to disclose their financial sources. Those laws were clarified by a bill that passed this summer, supporters of the bill say.

So far, the CFIF's ads attacking McGraw have not set well with the four-term Democrat, and he announced last week that he is planning to pursue legal action against them, according to the Charleston Gazette.

"Plaintiff wishes to engage in public discussion of issues of public policy while West Virginians are focused on such matters by the impending state elections, while candidates in those elections usefully illustrate Plaintiff's points and while grassroots activity is most effective," CFIF's complaint says.

"Plaintiff is being deterred from speaking, however, by threatened civil and criminal penalties."

CFIF is a nonprofit organization that says its mission is to protect the U.S. Constitution. Critics of the laws say forcing groups to disclose their financial backers violates the right to free speech because those backers will be subject to revenge by the candidates they opposed. CFIF also complains that the law's language is too vague.

In April, U.S. District Judge David Faber granted CFIF's request for a preliminary injunction against the disclosure laws.

"Because the West Virginia campaign finance laws challenged by this action set limits on political speech they are subject to strict scrutiny," Faber wrote. "Under such an analysis, the burden rests on the government to prove that the challenged laws further a compelling interest and are narrowly tailored to achieve that interest.

"Even where an opposing party moves for a preliminary injunction, and must therefore prove its likelihood of success on the merits, the ultimate burden of establishing the constitutionality of the challenged law remains with the government."

Faber also wrote that he expected the CFIF's argument that the some of the laws' language were too vague will be successful.

"In this case, it appears that several provisions in the West Virginia Election Code are vague, and consequently chill the public's right to speak on political matters," Faber wrote.

"Accordingly, the court finds that the public has a strong interest in having the challenged laws enjoined or clarified."

The defendants in the case, notably Secretary of State Betty Ireland, have moved to set aside the preliminary injunction.

Democratic Supreme Court hopefuls Menis Ketchum and Margaret Workman have intervened in the matter. They argue that the injunction is moot because the laws have been amended. Republican Beth Walker did not join them, though Democrat Bob Bastress did before losing in May's primary.

"The simple fact is that this Court enjoined a statute that no longer exists," the motion by Ketchum, Workman and Bastress says.

Faber is attempting to speed up the proceedings with the November elections looming. CFIF must respond to the defendants' motion to vacate the preliminary injunction by Monday, then the defendants have a week to reply.

State legal reform group Citizens Against Lawsuit Abuse criticized the bill that passed this summer and its champion, Del. Carrie Webster, D-Kanawha, in July.

Webster works for the Charleston law firm Bucci Bailey & Javins, which was hired by McGraw to pursue a lawsuit against VISA and MasterCard. The firm is one of four to represent the State, with both in-state firms (the other is Wheeling's Wexler Toriseva Wallace) featuring McGraw contributors.

The four firms could collect nearly $4 million in attorneys fees in a settlement that would provide discounts on "Energy Star" home appliances during scheduled sales.

Cohen also noted that Webster's husband, Greg Skinner, is a member of McGraw's staff.

The vice president of the West Virginia Association for Justice (formerly the state's Trial Lawyers Association) supported the law.

"An out-of-state special interest group should not be allowed to spend whatever they want to influence the outcome of a West Virginia election without disclosing who they are and who they represent," Michael Romano said.

McGraw, who is running for re-election against Republican challenger Dan Greear, said he plans to file complaints with the Internal Revenue Service and the Federal Communications Commission over the CFIF's ads, the Gazette report says.

The ads criticize McGraw's controversial 2004 settlement with Purdue Pharma over allegations that its prescription painkiller OxyContin was creating addicts and harming the state's Medicaid program. Purdue Pharma settled for $10 million, with more than $3 million going to outside counsel hired by McGraw to pursue the case.

The rest is being spent by McGraw, whose top aide admitted the settlement was structured in a way that prevented the federal Centers for Medicaid and Medicare Services from claiming its share. The CMS provides nearly 75 cents of every dollar spent on Medicaid in West Virginia.

The CMS is planning to withhold millions of dollars from its next Medicaid appropriation to the state.

The ad says McGraw is "spending $10 million from a settlement meant to help workers and the elderly, instead divvying it up between his trial lawyer buddies and a fund only controlled by McGraw."

The ad compares McGraw to an old dog who can't learn new tricks. It does not mention McGraw's opponent or the November election, instead urging viewers to "Call Darrell McGraw -- tell him to return the people's money."

In the Gazette report, Chief Deputy Attorney General Fran Hughes said, "Everyone has the constitutional right to face their accusers. We don't get the opportunity to face these people who are spending hundreds of thousands of dollars trying to influence an election.

"We are not going to allow false statements to be used by people who won't reveal who is behind them."

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.