CHARLESTON, W.Va. (Legal Newsline) - It looks like the feud between West Virginia Attorney General Darrell McGraw and a legal reform group is going to last four more years.

Thursday, Citizens Against Lawsuit Abuse again criticized McGraw's 2004 settlement with prescription drug manufacturer Purdue Pharma, calling for the soon-to-be fifth-term Democrat to give the state Public Employees Insurance Agency $440,000 from the $10 million settlement.

PEIA is considering premium hikes and benefit cuts.

"State workers and retirees in the system are entitled to this money McGraw has essentially funneled into his own political slush fund," CALA Executive Director Steve Cohen said.

"Should state teachers, for example, have to dig deeper for doctor visits and prescriptions because McGraw will not turn over the money he sued to get for them?"

Every year since the settlement, Purdue Pharma, which manufacturers the painkiller OxyContin, has paid McGraw's office $2.5 million. Some goes to the attorneys McGraw hired (more than $3 million), and the rest goes to substance abuse programs picked by McGraw.

His office admitted that it did not give the settlement funds to the state agencies it represented in the suit because the federal government could have staked its claim to the money. Nearly 75 cents of every dollar the state spends on Medicaid, the program alleged to be harmed, is federally funded.

One of those programs was PEIA. The state's Department of Health and Human Resources was paid $500,000, McGraw has said.

The federal Centers for Medicare and Medicaid Services plans to withhold millions from its next appropriation to the state.

CALA has long been critical of the settlement and recently named him their 2008 top lawsuit abuser.

McGraw's office has a similar disdain for CALA. Chief Deputy Attorney General Fran Hughes feels the group's grassroots image is a sham, and that it is funded by out-of-state corporate interests.

Hughes approached Cohen after a hearing in Wheeling and said it was dishonest to call his group a watchdog when it was a business group.

"One of these days you will be exposed, and you will get your due," she told Cohen.

Cohen had asked a state judge to demand information that showed the $3.9 million the attorneys in the Visa/MasterCard case is justified.

No decision on the fees has been made.

Last year, Hughes said CALA's objective is "to foster a legal environment that shields its contributors from accountability when they break the law."

"It works its sophisticated deception aimed at duping West Virginians into believing that only by giving up their rights to access to the courtroom can the State have economic development," Hughes wrote to lawmakers. "Unchecked and unfettered corporate power accountable only to shareholders is the real threat to fairness for all citizens."

McGraw won re-election this month with a close victory over Republican challenger Dan Greear.

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