When DuPont agreed to pay $12 million to resolve its role in Rhode Island's lead-paint lawsuit last year, the company was adamant that none of the money go to the law firm that the state hired to press the lawsuit.

Normally, when a lawsuit is settled, the lawyers who brought the case receive a portion of the settlement as their fee. But DuPont, facing lead-paint lawsuits around the country, insisted that the deal not be called a settlement, says Attorney General Patrick C. Lynch.

And that meant paying no legal fees to Motley Rice, the private law firm that the state had hired to sue companies that made lead paint.

The agreement, Lynch said, was the first time a paint company had ever paid any money as a result of lead-paint litigation.

Lawyers for Motley Rice, who said they saw the historic value of getting a company to pay money to help clean up the lead-paint problem, agreed to waive their fee.

Instead, Lynch asked DuPont to donate $2.5 million to the International Mesothelioma Program at Brigham and Women's Hospital in Boston. Mesothelioma is a deadly cancer of the tissue surrounding the lungs that is caused by exposure to asbestos.

One year later, that $2.5-million donation is generating controversy.

J. William W. Harsch, Lynch's Republican opponent for attorney general, has criticized the fact that the $2.5 million is going out of state, and for a cause not connected to lead poisoning, and questions Lynch's authority to enter into such an agreement.

Lawyers for the other paint companies sued by the state, including three that were found liable for potentially billions in damages, have also questioned the arrangement.

And Leonard Decof, one of the state's original lawyers in the lead-paint case, argues that $2.5 million is a "de facto" legal fee, and that he is therefore entitled to a portion.

Decof says the $2.5 million has been applied to a $3-million pledge that Motley Rice had previously made to Brigham and Women's. The law firm serves on the executive advisory board of the International Mesothelioma Program -- a seat that requires a pledge of $3 million, according to the program's annual report.

Jack McConnell, Motley Rice's lead lawyer in the lead-paint case, says he expects that the $2.5 million will count toward the firm's pledge.

"I don't see why it shouldn't," said McConnell. "And I don't see anything nefarious or wrong with that. I'm proud that the money didn't go into our pocket and I'm proud that it went to a charity. The money is being directed to a worthy cause."

THE FIRST TRIAL in the lead-paint lawsuit ended in a hung jury. In June 2005, as preparations were being made for a second trial, the state and DuPont were on the verge of a deal.

The company and Lynch had gone back and forth over the previous few years on various numbers -- amounts of money to be paid for lead abatement, numbers of houses that DuPont would pay to clean up, additional monies for enforcement, education and community outreach.

But there was one final obstacle, says Lynch -- legal fees.

"It was a deal breaker for DuPont to pay any legal fees to any law firms," said Lynch.

In fact, DuPont and the other defendants had challenged the attorney general's right to hire outside lawyers to sue them. DuPont refused to even negotiate with Motley Rice, said Lynch -- so the attorney general negotiated with DuPont himself.

Faced with DuPont's position, but also viewing a deal with DuPont as a historic opportunity to wring some money from a paint company to address the lead-paint problem, Lynch and McConnell said in recent interviews that Motley Rice agreed to waive its legal fee.

But afterward, Lynch said, he was troubled.

"Why should DuPont be allowed to pocket that $2.5 million [the amount of the legal fee]?" he said he asked himself. "I didn't want to walk away from that sum."

Consequently, McConnell recalled, Lynch came to him and asked, "Do you have a favorite charity?"

McConnell said that he suggested the mesothelioma program. Motley Rice had been involved in thousands of lawsuits against asbestos manufacturers, on behalf of mesothelioma patients, and as a result was very familiar with the work of Dr. David J. Sugarbaker at Brigham and Women's, who had testified in the suits.

Sugarbaker, a prominent authority on mesothelioma, had treated hundreds of patients who had hired Motley Rice to sue asbestos companies, and testified on their behalf, according to Motley Rice lawyer Donald A. Migliori.

Sugarbaker founded the program in 2002, to seek a multi-disciplinary approach to finding a cure and better treatment. Five law firms involved in asbestos litigation, each of whom pledged $3 million over five years, serve on the executive advisory board.

Lynch said McConnell told him that Motley Rice "had a commitment" to Brigham and Women's.

"I didn't know the amount [that Motley Rice had pledged], but I knew of a relationship," Lynch said in an interview. "[Motley Rice] had committed to raising money for and being supportive of Brigham and Women's. I didn't understand it to be their personal money.

"In the end, it didn't matter. The question for me was, 'Can I resolve this issue?' "

HARSCH, LYNCH'S OPPONENT, criticizes the deal.

"I don't see Rhode Island getting a penny from the $2.5 million going to Boston to pay Motley Rice's pledge to Brigham and Women's for cancer research with lead money," Harsch said yesterday at a news conference outside the attorney general's headquarters in Providence.

McConnell says that the $2.5 million was "on top of" the approximately $10 million that DuPont had already agreed to pay to address lead-paint issues in Rhode Island. (That aspect of the deal also has drawn fire, since the bulk of those funds are being funneled through a DuPont-backed nonprofit in Washington, the Children's Health Forum.)

Adds Lynch: "I couldn't add [the $2.5 million] to another category [for lead-related issues in Rhode Island]. This was a separate part of the discussion. I already had $11 million or $12 million in hand that nobody had ever had, and that nobody would ever get [if the deal fell apart]."

Migliori, the Motley Rice lawyer, said that when his firm joined the board of the mesothelioma program, he clarified with Dr. Sugarbaker that the $3 million pledge could include funds that the law firm raised from other sources, as opposed "to us writing a check for $3 million."

As for the DuPont money being directed to Brigham and Women's, Migliori said: "We're not ashamed -- this money isn't going to pay our legal fees. Our law firm's work in asbestos litigation over the years has enabled us to finance the lead-paint litigation for the past nine years."

Not all of the $2.5 million, however, will be credited toward Motley Rice's $3-million pledge. A Boston law firm, Thornton & Naumes, which served as co-counsel for Rhode Island in the lead-paint trial, also sits on the board of the mesolthelioma program and also has a $3-million pledge.

Neil Leifer, a Thornton & Naumes lawyer who worked on the lead case, said it "seems reasonable" that his firm's share of the waived legal fee should be credited toward the $3 million that it has pledged to Brigham and Women's.

"The money came to the hospital through our efforts in this lead-paint litigation," said Leifer. "I'm not sure why it would be inappropriate."

A spokesman for Brigham and Women's said hospital officials have had no conversations with Motley Rice about whether the $2.5 million from DuPont will be credited toward the law firm's pledge.

A DuPont spokeswoman said the company was not aware of Motley Rice's ties to the mesothelioma program, but simply agreed to donate the $2.5 million to Brigham and Women's as the charity designated by Lynch.

Yesterday, DuPont released a statement saying that it "has instructed the hospital that its payment should not be credited to any pledge or obligation of Mr. McConnell, his law firm, or any other entity."

Until recently, however, none of the money had been paid. Last August, Decof & Decof filed a lien for attorney's fees from the DuPont deal. The funds were frozen.

In June, the parties agreed to release most of the money, including $1.5 million of the $2.5 million to Brigham and Women's. The remaining $1 million is being held by the court in Rhode Island until Decof's claim is resolved.

"My motivation was to win this case for the people of Rhode Island," said Len Decof, in a recent interview. "If there was a lawyer's fee paid, then I am owed money. If I spend a day building you a garage, I'm entitled to be paid. We did a day's work here -- actually, five years of work."

Decof, who represented the state in DEPCO cases arising out of the state banking crisis in the early 1990s, tried the state's first case against the paint companies, which ended in a hung jury. He withdrew from the case last year, prior to the DuPont deal.

Decof said he was not privy to the discussions leading to the deal, nor was he ever asked to waive his portion of any legal fees. He said his current legal fight is also driven by a desire for answers.

"There are two questions," he said. "Is it a settlement, and was a fee paid?"

Echoed his son and law partner, Mark B. Decof: "We're shining the light."

With staff reports from Peter B. Lord.

mstanton@projo.com/(401) 277-7724