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Despite recusal, Morrisey met with drug firm about lawsuit

CHARLESTON, W.Va. -- West Virginia Attorney General Patrick Morrisey was overseeing his office's lawsuit against an Ohio drug company earlier this year while a Washington, D.C., lobbying group owned by Morrisey's wife collected $210,000 from the same drug distributor, records show.

Morrisey also has accepted $3,500 in contributions from the company and its executives since defeating former attorney general Darrell McGraw in the November 2012 election.

Morrisey held a meeting with Cardinal Health executives and the company's lawyer about the lawsuit in May and fielded correspondence about the case in late June, according to documents obtained by the Sunday Gazette-Mail.

In previous prepared statements, Morrisey has said he recused himself from the Cardinal Health lawsuit, which alleges that the company helped fuel Southern West Virginia's problem with prescription drug abuse by shipping excessive numbers of pain pills to the region. Morrisey has said he stepped aside from the case "earlier this year" and that his chief deputy, Dan Greear, has managed the case "since the beginning of the year."

On May 22, however, Morrisey and Greear met privately with two Cardinal Health executives and the drug company's Charleston lawyer, Mark Carter, who also led Morrisey's campaign transition team, records show. A Cardinal Health vice president gave a PowerPoint presentation about steps the company has taken to prevent drugs from being diverted for illegal use.

The meeting didn't include the Attorney General Office's outside counsel - Charleston lawyer Jim Cagle - who was hired by the office to represent the state in the Cardinal Health lawsuit.

On June 21, Carter had a letter hand-delivered to Morrisey about the attorney general's lawsuit against Cardinal Health.

Carter's letter gives no indication that Morrisey stepped aside from the Cardinal Health lawsuit.

Carter sent the letter directly to Morrisey. The header says, "Re: State of West Virginia, Patrick Morrisey v. Cardinal Health," and references the lawsuit case number in Boone County Circuit Court. It starts, "Dear General Morrisey."

The letter includes a copy of the May 22 PowerPoint presentation, the company's "standard operating procedures," several U.S. Drug Enforcement Administration reports and congressional testimony from the CEO of the Healthcare Distribution Management Association, an Arlington, Va., trade group that represents drug wholesalers.

Morrisey formerly lobbied for the trade group, generating $250,000 for his Washington, D.C.-based law firm over 16 months.

In the letter, Carter also promised that Cardinal Health would later disclose its "return policies" - presumably for unused and unopened prescription drugs returned to the company's distribution center. Morrisey requested the policies, according to the letter.

Carter asked for a follow-up meeting with Morrisey.

"We trust this information will be helpful to you, and we likewise expect that you will have additional questions regarding these materials," Carter wrote to Morrisey.

Morrisey and Greear also met privately with Carter on March 6, but Morrisey would not say what the meeting was about.

Morrisey's office recently acknowledged the meetings and released Carter's letter in response to a Gazette-Mail request under the state's Freedom of Information Act.

Last week, Morrisey would not answer specific questions about his meeting with Carter and Cardinal Health executives and, instead, his office released a statement.

"The attorney general has taken very positive and proactive steps to voluntarily step aside from this case when he was not required to do so," said Beth Ryan, a Morrisey spokeswoman. "Our office continues to litigate this matter. We have no further comment."

The Gazette-Mail also has requested emails exchanged by Morrisey's office and Cardinal Health lawyers. Morrisey has refused to release any additional documents, saying "if they exist" he could withhold the records from the public.

Morrisey received June update on Cardinal Health lawsuit

McGraw filed suit against Cardinal Health in June 2012, alleging that the company profited from Southern West Virginia's pain-pill "epidemic." Morrisey inherited the lawsuit when he took office on Jan. 14 of this year.

In late July, Morrisey announced that he had stepped aside from the Cardinal Health lawsuit after the Gazette-Mail revealed that the pain-pill distributor contributed $2,500 to Morrisey's inauguration, and that Morrisey's wife, Denise Henry, lobbied for Cardinal Health.

The drug company paid Henry's lobbying firm, Capitol Counsel, $400,000 last year, and another $210,00 between January and June 30, according to lobbying disclosure forms. Since 2001, Cardinal Health has paid $3.7 million to lobbying firms that Henry has worked for or owned.

Meanwhile, Cardinal Health executives donated $4,000 to Morrisey's campaign last year, $3,000 of which came after McGraw's office filed suit against the company. A company vice president also contributed $1,000 to Morrisey's campaign last December, a month after he defeated McGraw. Morrisey is holding post-election fundraisers to help retire his campaign debt.

In his statement last July, Morrisey indicated that his wife's long-time lobbying work for Cardinal Health and the company's campaign contributions didn't prompt his decision to step down from the lawsuit.

Morrisey cited another reason: He alleged that McGraw "implied" to him at a parade last year that McGraw filed the Cardinal Health lawsuit to retaliate against Morrisey's campaign.

"While McGraw's statements disturbed me greatly and led me to believe that at least some part of that case was politically motivated, after I took office I decided that, not withstanding McGraw's comments, West Virginians deserved the case to be decided on the merits," Morrisey said in July.

"While not required under the law, because of McGraw's ethically problematic comments, earlier this year, I recused myself from the litigation as it pertains to Cardinal Health," Morrisey went on. "My chief counsel, Dan Greear, has been managing the special assistant attorneys general [outside counsel] since the beginning of the year."

McGraw has said he never talked with Morrisey about the Cardinal Health case.

The Gazette-Mail later requested documents about Morrisey's decision to distance himself from the Cardinal Health lawsuit. Morrisey responded that he recused himself "orally" -- not in writing.

On Sept. 16, weeks after The Charleston Gazette reported on Morrisey's ties to Cardinal Health, Carter met with Greear, but Morrisey did not attend that meeting.

In a commentary published in the Charleston Daily Mail days earlier, Morrisey disclosed that he had attended meetings with Cardinal Health representatives about "prescription drug strategies," but he provided no details. The commentary followed a Gazette Freedom of Information Act request for information about his meetings with Cardinal Health lawyers.

Morrisey 'has been very open' about meetings on drug abuse

The lawsuit alleges the drug wholesaler distributed powerful painkillers, such as hydrocodone, to "pill mill" pharmacies and doctors in Southern West Virginia. Doctors prescribed the drugs and pharmacies dispensed them for illegal use, according to the lawsuit.

Last year, the DEA suspended Cardinal Health's federal license to distribute controlled substances from its Florida warehouse on charges that the company allowed pharmacies to purchase excessive amounts of painkillers.

It wasn't the first time the company has been in trouble with federal authorities. In 2008, Cardinal Health paid a $34 million fine after the DEA cited the company's Lakeland, Fla., distribution center for failing to notice suspicious orders for the hydrocodone.

After McGraw filed suit against Cardinal Health last year, the company hired former U.S. Senator Carte Goodwin as its attorney.

In April, Cardinal Health abruptly discharged Goodwin and replaced him with Carter, who's politically tied to Morrisey.

After winning the election, Morrisey named Carter co-chairman of his 26-member transition team "steering committee," a group set up to "offer perspectives on strategies and approaches for managing the West Virginia Attorney General's Office," according to a news release at the time.

Carter gave $500 to Morrisey's campaign in September 2012, and $75 to the attorney general's inaugural party fund in January, records show. Carter did not respond to a request for comment last week.

In the statement released by Morrisey's office last week, Ryan said, "The state's battle with drug abuse is one of our office's most important consumer protection initiatives."

A health-care group recently released a report that found West Virginia has the highest drug-overdose rate in the nation. Cardinal Health is the nation's second-largest drug distributor.

"Attorney General Morrisey has been very open about the fact he has had discussions and meetings with many individuals and companies about efforts already underway, as well as steps we as a state can take to tackle West Virginia's drug epidemic," Ryan said. "West Virginia has a very serious crisis on its hands when it comes to overdose deaths from prescription drugs."

Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.


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