As Monday deadline approaches, Justice has yet to appoint members to First Foundation board

Monday is the deadline for the West Virginia First Foundation — which will distribute funds from opioid litigation — to complete its board of directors, but Gov. Jim Justice has yet to appoint a single one of the five members he is responsible for to the board.

That deadline comes from the foundation’s articles of incorporation and occurs 60 days after they were filed with the secretary of state’s office. The document does not state what happens if a board is not completed by the set deadline.

“We expect the governor to make a decision on his appointments in 30 to 60 days,” wrote John Mangalonzo, press secretary for Attorney General Patrick Morrisey, in an email Thursday evening. “I would defer updates on those appointments to the governor’s office.”

C.J. Harvey, press secretary for Justice, said earlier Thursday there were “no updates at this given moment” about when to expect appointments — which are subject to confirmation by the state Senate — to come from the executive office.

“As soon as we know, we’ll make sure everyone knows,” Harvey said. 

The last update from Justice directly came during a press briefing July 5, when he told reporters that appointments would come from him “really soon.”

What is the West Virginia First Foundation?

The foundation is a 501(c)3 nonprofit created earlier this year to distribute funds from various legal settlements with opioid manufacturers and distributors over the last few years. So far, West Virginia has received about $400 million of its expected $1 billion in settlement money. A memorandum of understanding filed by the Attorney General’s office outlines how the foundation will operate and guidelines for distributing any money.

The foundation will be governed by an 11-member board of directors. Six of those members have been elected — with some results still awaiting certification — by officials in local municipalities and counties split into six regions to represent their interests. 

The other five, who will represent the interests of the state, are due to be appointed by Justice and are subject to confirmation by the state Senate. None of the five appointees can live in the same district.

An executive director will head the foundation and the state has hired a national search firm to find candidates for the position. Morrisey will appoint the executive director after consultation with the full board. As head of the foundation, the executive director will be responsible for keeping its records. Members of the board could unseat the executive director if three-fourths of them vote to do so. 

There will also be an “expert panel” formed after the board is complete to help distribute funds strategically. Members of the expert panel should have experience in substance use disorder, mental health, law enforcement, pharmacology, finance and health care policy and will be appointed by the board.

How will the money be split?

The state will put $10 million — earned from the settlement with McKinsey & Company in 2021 — into a seed fund. All other money collected through settlements and litigation will be split as follows:

• 24.5% will go to local governments, and will be split based on a formula determining the impact of the opioid crisis in the municipality or county. A breakdown of each municipality and county’s share can be found in attachment C of the memorandum of understanding. If the amount of money distributed to a community is less than $500, the money will go to the governing county to “allow practical application” of the funds. Huntington and Cabell County are so far the only localities to opt out of the state share as they pursued their own litigation against opioid companies separate from the state.
• 72.5% of the money will go directly to the foundation. Those funds will be distributed by the board to fund programming that should benefit the entire state and help abate consequences of the drug epidemic.
• 3% of the funds will go to the State of West Virginia and be held in escrow to cover legal fees from opioid litigation. If that money is not spent by Dec. 31, 2026, 1% will go to local governments and the foundation will receive the other 2%.

Any funds used by the foundation must go toward approved uses.

What are approved uses for the money?

The money can be used in a variety of ways, with specifics laid out to support treatment of opioid use disorder and any “co-occurring” substance use disorder and mental health. 

Programs must be evidence-based or evidence informed, and include but are not limited to:

• Addiction treatment (telehealth opportunities, expanded opioid treatment programming, and all forms of medically assisted treatment allowed by law)
• Support for people in both addiction and recovery (counseling, housing, transportation, employment training and more)
• Improving system connections (including investment in peer recovery, training for physicians on treating people with substance use disorders and supporting and expanding currently available programs, among others)
• Addressing needs in the criminal justice system (assisting diversion programs and helping people transition out of the jail or prison systems)
• Helping people who are pregnant, and babies with neonatal abstinence syndrome (investing specifically in children’s services, improving wrap-around services for pregnant people and training health care professionals on protocols for referring babies born with neonatal abstinence syndrome for care)
• Ensuring the appropriate prescribing of opioids (investing in training for providers to stay up-to-date on guidelines and implementing improvements to prescription drug monitoring programs)
• Prevent “misuse” of opioids (funding media campaigns, drug take-backs, community coalitions and more to educate the public)
• Prevent fatal overdoses and other “opioid-related injuries” (increase naloxone distribution and training, expand access to HIV and hepatitis treatment and prevention, educate on good Samaritan laws and more)

How transparent will the foundation be?

Local governments receiving money must submit financial reports annually showing the funds went toward approved uses. As a 501(c)3, the foundation will be expected to file annual financial and operating reports that are available to the public, and it will be open to audit by the attorney general.

The foundation, including by the board of directors and the expert panel, will not be subject to the Open Meetings Act, but all election proceedings will be, according to the attorney general’s office. Per the memorandum of understanding, the foundation and all its entities “shall operate in a transparent manner.” The document does not, however, detail what that means.

Bylaws for the organization have not been completed, and regions — including Region 5, with Cabell and Kanawha counties — have voted to encourage their representatives on the foundation’s board to adopt transparency standards including compliance with the Open Meetings Act.