RICHMOND (AP) - An assistant state attorney general improperly advised two energy companies fighting class-action lawsuits by southwest Virginia landowners who claim the companies cheated them out of tens of millions of dollars in royalty payments for natural gas drilled on their properties, according to a report from the Inspector General's Office obtained by The Associated Press.

In the report issued Tuesday to the Attorney General's Office, Inspector General Michael F. A. Morehart wrote that the assistant attorney general 'inappropriately used commonwealth resources in support' of private litigation.

Following the release of the report, Brian Gottstein, director of communication for the Office of the Attorney General said, 'The inspector general's report proves what we have said from the beginning: Attorney General Cuccinelli had no prior knowledge of the content of these emails and he did not authorize them.'

Gottstein said the AG's office first became aware of the email correspondence in Sept. 2012.

The assistant attorney general, whose name was redacted from the report, provided 'litigation strategy' to attorneys for the energy companies when she claimed to be defending the constitutionality of a state law, the report concluded.

The investigation was sparked by an the assistant attorney general's email correspondence with EQT Production Co. and CNX, which prompted a federal magistrate to write that she was shocked by the advice to the companies on how to fight the lawsuits. U.S. Magistrate Pamela Meade Sargent identified the assistant state attorney in court papers this summer as Sharon Pigeon, counsel for the Virginia Gas and Oil Board.

The revelation has been an embarrassment for Attorney General Ken Cuccinelli, the Republican candidate for governor whose campaign received more than $100,000 from CONSOL Energy, the parent company of CNX. He has said Pigeon was overzealous in defending a state law.

Cuccinelli has rejected 'in the strongest possible terms' any suggestion that campaign donations from CONSOL have influenced his office's handling of the case.

Gottstein also said Cuccinelli has told the assistant AG to end communications with the gas companies' attorneys and 'she will no longer be monitoring the cases for further constitutional challenges to the Virginia Gas and Oil Act;* instead, a litigation specialist in the Richmond office will handle that.'

AP-WF-10-15-13 1608GMT

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