CHARLESTON, W.Va. — Gov. Jim Justice vetoed a bill that would have reined in the state Attorney General’s use of millions of dollars in lawsuit settlement funds.

The bill would have required funds won in cases by the West Virginia Attorney General’s Office to be deposited to the state’s General Revenue Fund.

Supporters said the bill would have upheld the Legislature’s power of the purse.

“Although this bill was intended to disallow unfettered use of an officeholder’s discretionary settlement funds, its application to the executive branch is ill-conceived and does not take into consideration the practical effect on an agency when actual monetary damages are incurred because of a breach of contract,” Justice wrote in a letter explaining his veto.

MORE: Read Justice’s veto letter.

The House of Delegates passed the bill 90-7. The Senate passed it 22-11.

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Patrick Morrisey

The issue heated up last fall after Attorney General Patrick Morrisey announced his office was transferring $1 million to the State Police to hire staff for the crime lab to help clear a case backlog.

Questions arose about whether the Attorney General has the authority to appropriate state funds to another agency.

The bill passed by the Legislature would have directed recovered funds and assets to be deposited into the state’s General Revenue Fund or held in trust to do so.

It prohibited agreements to settlement or agreement terms that are contrary to that.

And it required a quarterly transfer of funds from the Consumer Protection Recovery Fund into the General Revenue Fund. It also required quarterly reporting by the Attorney General about the status of the funds designated to be turned over.

When Morrisey first ran for Attorney General in 2012, he criticized incumbent Darrell McGraw’s use of the settlement fund.

The second item on candidate Morrisey’s 17-point plan that year was: “Send settlement monies back to the State Legislature and taxpayers.”

For the past two years, Morrisey’s office has questioned the wisdom of the Legislature’s settlement fund bill.

Like Justice, officials from the Attorney General’s office expressed concern that the proposal would suppress state agencies’ motivations to file suits to recover damages when they are harmed if those agencies wouldn’t receive money from their efforts.

Justice wrote in his veto letter, “to require that any damages awarded to a state agency be deposited in the General Revenue Fund and then be re-appropriated through the legislative process would significantly delay the timely operation of state contracts and perhaps result in more damages, especially in instances where mitigation of damages is required.”

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