Stivers says he’ll call for investigation of Kentucky’s Purdue Pharma settlement
FRANKFORT — Worried that Kentucky was “short changed” in its $24 million settlement with OxyContin maker Purdue Pharma, Senate President Robert Stivers on Tuesday said he will call for a special counsel to investigate the deal.
“Why did Kentucky settle a case for 10 percent of the amount Oklahoma obtained, a state with a slightly smaller and substantially less affected population?” Stivers asked, holding a copy of The Courier Journal with a story about the 2015 deal.
Stivers, a Manchester Republican, said recent developments involving Purdue Pharma and the Sunday article in The Courier Journal about the 2015 settlement show Kentucky didn’t get as much money as it could have from the drug maker, which has been accused of falsely advertising the addictive powers of the painkiller that helped fuel the state’s opioid crisis.
“This article raised more questions about who facilitated the questionable deal,” Stivers said. “Many details of the settlement remain unknown.”
Stivers said that when the next session of the General Assembly convenes next year, he will introduce a resolution directing the appointment of a special counsel to investigate circumstances surrounding the settlement.
Purdue Pharma has filed for bankruptcy and is looking to restructure after a reported multibillion-dollar agreement with dozens of states and thousands of cities. Earlier this year, Oklahoma reached a $270 million settlement with the company to cover its handling of the opioid crisis.
Kentucky’s case against Purdue Pharma was filed more than a decade ago by then-Attorney General Greg Stumbo, a Democrat who is now running to be elected back to that office. When he filed the case, he proclaimed it could be worth $1 billion.
The case was settled by Stumbo’s successor as attorney general, Jack Conway, in December 2015 after Conway had lost that year’s race for governor to Republican Matt Bevin.
Conway said later Tuesday what he’s said about the case for a long time: “We got what up to that point, I believe, was the largest state settlement against Purdue Pharma in history. West Virginia had gotten $10 million.”
Conway said his staff’s unanimous recommendation was to settle for $24 million, partly because pending rulings on important motions in the case in Kentucky courts threatened to diminish the amount Kentucky could recover.
But the matter has been brought into this year’s campaign for governor by Bevin and other Republicans who say it raised conflict-of-interest questions surrounding both Conway and current Attorney General Andy Beshear.
Beshear, who is running for governor against Bevin, worked for the Louisville-based Stites & Harbison law firm that represented Purdue Pharma against the state.
But Bevin and Republicans also have raised questions over how $4.2 million of the state’s settlement was paid out to a law firm Conway later joined as partner.
Beshear’s campaign released a statement later Tuesday calling Stivers’ announcement a “shameless political stunt that shows how worried Matt Bevin is about his weak and failing campaign.”
The Beshear campaign further said that Beshear played no role in the settlement. And in later administering the settlement as attorney general starting in 2016, “the office of attorney general followed the budget instructions passed by Sen. Stivers in the legislature and signed by Matt Bevin, as well as the written instructions from Matt Bevin’s administration — and there are emails to prove it.”
Stivers’ call for an investigation comes nearly four years after the settlement and six weeks before this year’s elections for governor and other statewide offices.
But he said his action Tuesday was not motivated by politics. He said he’s expressed concerns about the settlement in the past, and that the recent Courier Journal article included new information — including a comment by Stumbo that “optics” surrounding the settlement “don’t look very good.”
Stivers also said, “I have not talked to the governor about this issue at all.”
Stivers said that on the first day of the 2020 legislative session he will file a joint resolution — which must be passed by House and Senate and carries the force of law — to hire an outside counsel and a budget for the investigation. The lawyer or law firm hired for the work would later file a report with findings and recommendations to the legislature, and possibly any prosecuting agency if evidence of possible crimes is uncovered.
Stivers said he expected any such investigation would take six to eight months.
By Tom Loftus
Louisville Courier Journal