CHARLESTON, W.Va. — State Attorney General Patrick Morrisey is hoping to get back $4.9 million it had to pay back to the government for how it handled federal stimulus funds.
Morrisey announced Friday that his office has filed a motion to intervene in federal court in the fraud case CityNet filed against Frontier Communications in 2018 for allegedly misusing $40 million stimulus funds to expand broadband. The lawsuit alleges Frontier violated the False Claims Act.
“We must act now to assert our claim and protect West Virginia’s interest,” Morrisey said in a statement. “It is only right that West Virginia be made whole and another entity bear the costs, if it is proven that entity engaged in fraud. Anything less would amount to the federal government receiving double payment for the same underlying costs.”
After an audit, the federal government required the state, which was the recipient of the grant, to pay back nearly $5 million for “unallowable reimbursements.”
The legislature approved SB 1026 in May that took the money from state Treasurer John Perdue’s unclaimed property fund and transferred it to the state’s general fund. From there it went to the federal government.
Morrisey said Friday he’s taking no position in the case between Frontier and CityNet but being allowed to intervene could put the state in the position to recoup the money if “federal court were to find that Frontier’s conduct violated the False Claims Act.”
The state received $126.3 million in a 2010 federal stimulus grant to expand broadband and it partnered mainly with Frontier Communications to do so. A federal audit determined not all of the money reimbursed were for items covered by the grant.
Justice administration General Counsel Brian Abraham told MetroNews in May the $4.7 million in question was one of the first things Gov. Jim Justice was told in early 2017 when he began to transition with the administration of former Gov. Earl Ray Tomblin. Abraham said they’ve appealed the audit’s findings for months but have been unsuccessful.
“We, of course, tried to run every track we could through the administrative appeal process and that’s run to its conclusion and we have no choice but to pay the bill,” Abraham said.
The False Claims Act case is before U.S. District Court Senior Status Judge John Copenhaver.