- Associated Press - Wednesday, June 28, 2017

FRANKFORT, Ky. (AP) - A top Republican lawmaker has questioned why Kentucky settled a lawsuit against a major prescription painkiller for “pennies on the dollar,” arguing Democratic officials orchestrated the agreement to avoid an embarrassing conflict of interest for the state’s Democratic attorney general.

Kentucky was suing Purdue Pharma in 2015 for misleading people about the powerful addiction caused by its multibillion dollar prescription painkiller, OxyContin. At the time the lawsuit was filed, state officials said it could be worth as much as $1 billion.

But former Democratic Attorney General Jack Conway settled the lawsuit for $24 million in 2015. Conway announced the settlement a few weeks before he left office and Andy Beshear replaced him. Beshear previously worked for Stites and Harbison, the Lexington law firm that represented Purdue Pharma in the case.

“This may have been settled because of potential conflicts,” Republican Senate President Robert Stivers said, adding it was “very disconcerting.”

Stivers‘ comments to reporters came a few minutes before Beshear announced he planned to hire a private law firm to help his office file up to 10 lawsuits against prescription painkiller manufacturers.

“It is wrong to politicize our opioid epidemic or use it against each other in this state,” Beshear said.

Stivers referenced the testimony of Lainie Kaiser, a former lawyer in the attorney general’s office who worked on the Purdue Pharma case. Kaiser is suing the attorney general’s office for gender discrimination. In her deposition, Kaiser said the Purdue Pharma case was settled as the attorney general’s staff worried about how the case would proceed when Beshear took office.

“It was settled. I think there was some question since Stites and Harbison was counsel for Purdue Pharma, and the incoming attorney general was a partner at Stites and Harbison, that there would be some conflict once he took office,” Kaiser said. “There was some discussion of the case getting moved to the Governor’s Office should Jack Conway win, because he was running for governor.”

Conway lost to Republican Matt Bevin in the 2015 governor’s race.

In an interview, Conway said that if he had won the governor’s race he probably would have recommended Beshear transfer the case to the governor’s office “just from a perception standpoint.” But he said that did not “absolutely force the settlement.”

Instead, Conway said the state was having a difficult time proving how much money Purdue Pharma should have to pay. He said the state could prove Purdue Pharma lied about its marketing, but the amount of money Purdue had to pay depended on the state’s ability to prove the company created a “public nuisance” through its deceptive marketing practices.

“We were on a very novel theory of damages that were going to be very, very hard to prove,” Conway said. “We thought it best to go ahead and get the money in hand there at the end of my term.”

Conway said he never discussed the case with Beshear. Conway said the $24 million settlement was appropriate, adding the company originally had offered to settle for $500,000.

Most of the records in the Purdue Pharma case were sealed under a settlement agreement signed by a judge. STAT, a national medical news publication owned by Boston Globe Media, has asked a judge to unseal those records .

The accusations heightened the tensions between Beshear’s office and the state’s new Republican majority in the Capitol. Beshear has sued Republican Gov. Matt Bevin four times over his use of executive orders, and Bevin has accused Beshear of running a corrupt office.

On Wednesday, Beshear said Stivers was beholden to the governor because Bevin has hired Stivers‘ wife for a high-paying job as a deputy Cabinet secretary. He said that puts pressure on Stivers because the job is an at-will position, meaning Stivers‘ wife could lose her job at any time.

Beshear noted that $450,000 of the Purdue Pharma settlement went to a substance abuse treatment facility in Stivers‘ district. At the time, Stivers praised the gift and even posed for a picture with Beshear.

“I guess a lot changes when your income depends on an at-will job of your spouse for the governor,” Beshear said.


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