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Former state Sen. Jon Woods found guilty in federal corruption case

Posted: 03 May 2018 01:27 PM PDT

Former state Sen. Jon Woods was found guilty today on 15 of 17 counts in his federal corruption trial. Consultant Randell Shelton Jr., on trial on related charges, was found guilty on 12 of 15 counts. They face up to 20 years in prison on each charge of fraud and conspiracy to commit fraud; Woods was also charged with one count of money laundering, for which he would face a maximum of ten years in prison — still awaiting word from the jury on which counts they were found guilty. They could also be forced to forfeit any money or property they obtained through their actions.

Woods stood accused of participating in a kickback scheme in exchange for guiding state money to a small Christian college in Springdale, Ecclesia College, and to a nonprofit under the umbrella of Preferred Family Healthcare, a major provider of Medicaid-funded services in the state. Former state Rep. Micah Neal pleaded guilty to being a co-conspirator in both schemes before the trial started and cooperated with the government. Oren Paris III, president of the college, pleaded guilty to being a co-conspirator in the Ecclesia scheme less than a week before the trial began cooperating with the government.

Shelton Jr. stood accused of participating in the Ecclesia scheme, with the kickback payments disguised as payments to his consulting company.

The jurors heard testimony that Woods and Neal directed $400,000 in public General Improvement Fund (GIF) money to Ecclesia in exchange for kickbacks. They also communicated by text message with their co-conspirators about directing additional GIF money to the college via other legislators, including identifying who would target which lawmaker and how much they would ask for. Paris also suggested that a good selling point would be that Ecclesia "produces graduates that are conservative voters" whereas "all state and secular colleges produce vast majority liberal voters." Woods replied: "Agreed."

None of the other legislators recruited for the GIF grab have been charged with a crime, but the efforts of Woods and Neal were quite successful. Between 2013 and March of 2015, the following lawmakers sent GIF money to Ecclesia: Sen. Bart Hester (R-Cave Springs) sent $60,000, Sen. Cecile Bledsoe (R-Rogers) $60,000, former state Rep. Randy Alexander (R-Rogers) $26,500, Rep. Stephen Meeks (R-Greenbrier) sent $25,000, Rep. Charlie Collins (R-Fayetteville) sent $14,000, Rep. Jim Dotson (R-Bentonville) sent $13,500, Rep. Bob Ballinger sent (R-Hindsville) $8,500, and Rep. Debra Hobbs (R-Rogers) sent $10,000.

An additional $100,000 in GIF grants to the college was pushed through by former Senate President Pro Tem Michael Lamoureux (R-Russellville), according to testimony heard by jurors, despite the fact that the grant applications were faulty. Lamoureux, who was  Governor Hutchinson's chief of staff until May of 2016 and is now a lobbyist, has likewise not been charged with a crime.

Yet more GIF money was sent to the college by multiple former and current legislators later in 2015.

According to testimony from Neal, the GIF system was a "slush fund." Hester also testified for the prosecution, and told jurors that legislators had total control of sending their allotted amounts of GIF money to pet projects. The regional development districts ostensibly in control of the approval for GIF grants rubber stamped them for lawmakers, Hester testified (despite the Supreme Court calling direct legislator control of such local grants unconstitutional).

Jurors also heard testimony that Woods engaged in other efforts to steer money to the college, including passing a law that created an account in the state's Department of Higher Education for grants that would only be available to Ecclesia because of a particular designation it has as a "work college" (a program for incorporating employment for all on-campus students into the academic experience). Ecclesia is one of only seven such colleges in the nation and the only one in Arkansas, so the account was exclusively for the tiny Springdale school. Woods unsuccessfully made attempts to insert language into the ballot initiative for medical marijuana that would have steered marijuana tax money to the college. "I think it is great to take money from Satan and Kingdom of darkness and put it to Kingdom of God use," Paris told Woods.

According to the indictment, Paris disguised the kickbacks as payments to Shelton's consulting company. Neal testified that Shelton delivered two envelopes stuffed with $100 bills, totaling $18,000, to him behind his family-owned restaurant in Springdale, Neal's cafe. The total amount of the kickback payment to Woods was not specified by the government, but the indictment stated that it involved both cash and a $40,000 wire transfer.

The jury also heard evidence and testimony about another alleged kickback scheme, this one involving corporate entities associated with Preferred Family Healthcare, a Missouri-based nonprofit with a large footprint in the state's health care system, which has received (and continues to receive) tens of millions of dollars from the state in Medicaid contracts, general revenue funding, and GIF largess.

Woods directed $275,000 to an entity under the PFH umbrella and Neal directed $125,000. The grant application was originally drafted by Bonitea Goss, then chief operating officer at PFH. Little Rock lobbyist Rusty Cranford, then another PFH executive, signed the application for the grants and accepted the funds, which he then deposited into the account of yet another corporate identity, AmeriWorks, a new nonprofit that he incorporated the day after accepting the grants (Cranford later returned this money the day after federal investigators spoke to him, according to prosecutors). The jury heard evidence that Cranford paid Woods an unknown amount of money in kickbacks the next month; Woods paid Neal $20,000 on Cranford's behalf; and AmeriWorks sent Cranford's lobbying firm a check for $16,500. Cranford has also been indicted on unrelated federal charges in Missouri for a separate kickback scheme involving PFH.

In addition to the kickbacks, the jury heard testimony that Cranford and Tom Goss (husband of Bonitea), then the chief financial officer at PFH, helped secure an overpaid job for Woods' fiancee. Four months after the $400,000 windfall, Cranford and Goss landed her a job at Dayspring, one of the nonprofits under the PFH umbrella. She was hired in February as an on-the-job trainer for Dayspring at $70,000 a year, helping clients at the substance abuse treatment center with employment. She also received $300 per month in mileage allowance and cell phone reimbursement. When she left the position in June, her replacement was hired for half the salary. Originally, Cranford and other PFH leadership had hoped to hire Mitchell at a salary of $90,000 a year, according to emails between Cranford and Goss. However, they apparently concluded that this would be too outrageous because literally no position outside of the parent company PFH had a salary that high. In email discussions with Cranford about paying her an exorbitant salary, Tom Goss stated, "Senator is taken care of. He is a new bubba for our team."

In addition to the GIF giveaways, the jury heard testimony that Woods and Neal tried to  send $4.7 million in state grants and other public no-interest loans to move a thermostat manufacturer from Springfield, Mo., to northwest Arkansas. Woods was tapped to gather support for the deal in the Senate and Neal in the House, according to evidence presented by the government (the deal ultimately never materialized). Tom and Bontiea Goss were members of that private company's board.

Justice Department attorney Sean Mulryne told the jury, "Mr. Woods used his office as senator as a legislative ATM." Woods' attorney argued to the jury that it was all legal and routine legislative activity and "there's sunshine on everything. ... It's all open. There is nothing behind the scenes."

Neither Woods nor Shelton testified. Woods's attorneys called an FBI agent who had admitted to wrongdoing in the investigation, but the judge had previously restricted discussion of that topic and there was little substantive testimony. Paris was also called by the defense but asserted his Fifth Amendment right against self-incrimination and otherwise offered no testimony. Shelton's defense called a few character witnesses as well as someone who allowed Shelton to live in his basement apartment — crappy digs, the defense contended, for someone on the take. 

Tom and Bonitea Goss have not been charged with a crime. They also appear to be implicated in the separate kickback scheme that Cranford  has been indicted on in Missouri. Cranford was denied bail in March after a judge found that allegations that Cranford had attempted to hire someone to murder his alleged co-conspirator were credible. According to court filings by federal prosecutors, Cranford told an unnamed felon, "He needs to go away. He needs to be gone." According to the court filing, Cranford made a gun-shooting gesture with his hand when he made this statement. No charge has been filed in the alleged murder-for-hire scheme. He is set for trial this summer on one count of conspiracy and eight counts of accepting bribes.

Woods and Neal are two of the five former lawmakers who have faced federal charges related to improper use of GIF money.

Former state Rep. Hank Williams pleaded guilty Monday to accepting kickbacks. According to his plea agreement and statements in previous court proceedings, Cranford appears to be the lobbyist involved in arranging those bribes. He awaits sentencing.

Former state Rep. Eddie Cooper pleaded guilty to an embezzlement and kickback scheme involving Cranford and PFH. He awaits sentencing.

Former state Rep. Jake Files pleaded guilty in January on charges of wire fraud, bank fraud and money laundering. He admitted to pledging a forklift he did not own as collateral for a $56,700 bank loan, misdirecting more than $25,000 in taxpayer money for a sports complex his construction company was supposed to build, and pocketing GIF funds for personal purposes. He faces sentencing in federal court this summer.

Former Hillary Clinton campaign staffer Jennifer Palmieri to speak at Clinton School

Posted: 03 May 2018 11:57 AM PDT

Jennifer Palmieri, who served as communications director for Hillary Clinton's 2016 presidential campaign, will speak at the Clinton Presidential Center next week, May 10, at 6 p.m.

Palmieri will discuss her New York Times best seller "Dear Madam President," an imagined open letter to the first woman president which came out in March.

Prior to her work on the Clinton campaign, Palmieri worked as White House communications director under President Barack Obama, White House deputy press secretary for President Bill Clinton, and national press secretary for the Democratic Party. She is now the president of the Center for American Progress Action Fund.

All Clinton School Speaker Series events are free and open to the public. You can reserve seats by emailing publicprograms@clintonschool.uasys.edu or calling (501) 683-5239.


Clarke Tucker releases new ad

Posted: 03 May 2018 10:41 AM PDT



Yet another television ad released this morning by Clarke Tucker, the state representative running for the Second Congressional District. This is the advantage of a big fundraising haul.

Tucker is vying for the Democratic nomination to take on U.S. Rep. French Hill. The ad itself is more or less boilerplate stuff, but it's clear that Tucker — facing off against three candidates in the primary who have positioned themselves to his left — is focusing squarely on the general election. The ad focuses on veterans and touts Tucker's bona fides as a bipartisan dealmaker. The bipartisan, working-across-the-aisle theme was also present in Tucker's first ad, released earlier this week, which dinged Hill for his vote to strip health insurance from hundreds of thousands of Arkansans.

Before he can challenge Hill, Tucker has to come out on top in the Democratic primary next month. Tucker is the favorite in a crowded field, facing off against teacher and activist Paul Spencer, teacher and activist Gwen Combs, and Jonathan Dunkley, a project manager at the Clinton School of Public Service.

Estate gives UAMS $1 million for breast cancer research

Posted: 03 May 2018 09:54 AM PDT

The estate of Linda Garner Riggs, a former Arkansas insurance commissioner who later worked for Stephens Inc. for 25 years, has made a gift of $1 million to the University of Arkansas for Medical Sciences.

Riggs died in November. Her estate's gift will go to research into triple negative breast cancer, an aggressive former of cancer that does not respond to the most common hormonal therapies. It accounts for 20 percent of cases and is more likely to occur in young people, African Americans, Hispanics and persons with the BCRA1 gene mutation.

Riggs was a native of Fordyce. At one point in her 10-year career in state government, she was the legislative and budgetary director for Gov. Frank White.

Sierra Club argues that important data missing from new ADEQ "State of the Air" report

Posted: 03 May 2018 07:28 AM PDT


The Sierra Club issued a response yesterday to the Arkansas Department of Environmental Quality's 2017 "State of the Air" report, which was released last week.
The annual report, first issued for fiscal year 2016, was created by the department's Office of Air Quality to evaluate air quality and emissions data.

"Although the report states that most pollutants have decreased over time and Arkansas is in compliance with National Ambient Air Quality Standards, it also leaves out important data," the Sierra Club stated in a press release. "Arkansas's coal-burning power plants, most notably Entergy's White Bluff and Independence plants, significantly contribute to ozone impacts across state lines in St. Louis and Memphis."

Glen Hooks, the director of the state's chapter of the Sierra Club, issued the following statement: 
The key to improving air quality in Arkansas is ending our reliance on coal-generated electricity. If our air quality is improving, we can largely credit the decreased burning of coal in Arkansas and the recent shutdown of three old, dirty coal-burning plants in Texas that have polluted our state for decades. 

Coal-burning plants spew millions of tons of pollutants into our air each year, contributing to unsafe levels of ozone and sulfur dioxide. Our state's air quality will improve dramatically once we finally retire Entergy's White Bluff and Independence coal plants—two giant facilities that lack modern pollution controls and are annually among the largest sulfur dioxide emitters in the nation.

Clean air is tied directly to clean energy. Arkansas utilities, businesses, and cities are moving to solar energy in places like Stuttgart, Camden, and Clarksville, while our state is also using huge amounts of clean wind power. Fayetteville has announced a bold plan to power the entire city with clean energy. As Arkansas continues to rely more and more upon clean solar and wind energy, our air quality will continue to improve. Dirty coal has no place in the Natural State's clean energy future. 

Here's the full report from the ADEQ's Office of Air Quality:

[pdf-1]

ACLU condemns Leslie Rutledge's attack on program for Dreamers as "extreme anti-immigrant agenda"

Posted: 03 May 2018 07:06 AM PDT


Attorney General Leslie Rutledge
promised during her campaign to "wake up every morning" dreaming up ways to sue the federal government. She's at it again this week, announcing that she is joining a lawsuit led by the Texas attorney general aiming to end the Deferred Action for Childhood Arrivals (DACA) program.

The DACA program, created under the Obama administration, gives some legal protections to certain undocumented immigrants who were brought to the country as children, often called Dreamers. Without it, the 700,000 young immigrants participating in the program would lose eligibility for work permits and could force deportation. According to Department of Homeland Security data, there are an estimated 5,000 DACA recipients in Arkansas.

Rita Sklar, executive director of ACLU of Arkansas, issued the following statement, calling Rutledge's gambit "an extreme anti-immigrant agenda" and a "cruel attack on Arkansans and our values":

Once again, Attorney General Rutledge is wasting taxpayer money to attack Dreamers and end a program that is clearly constitutional and has overwhelming support among Americans. The Attorney General is advancing an extreme anti-immigrant agenda at the expense of Arkansas taxpayers and communities. This needs to stop. Dreamers are valued members of our communities, and America is the only home they've ever known. Attorney General Rutledge needs to abandon this cruel attack on Arkansans and our values. The ACLU of Arkansas will continue to stand in solidarity with Dreamers and all immigrants, and we urge our elected officials to do the same.

Leslie Rutledge and Mark Martin applaud Supreme Court's stay allowing Voter ID to be enforced during primary elections

Posted: 03 May 2018 06:12 AM PDT


Attorney General Leslie Rutledge
and Secretary of State Mark Martin both issued statements applauding yesterday's decision by the Arkansas Supreme Court that will allow the Voter ID law to be enforced this month, with early voting in the primaries slated to begin May 7.

Circuit Judge Alice Gray
had last week declared the law unconstitutional and issued a preliminary injunction against its enforcement in the primaries. The Supreme Court granted a stay that reversed the injunction. It has not ruled on the underlying question of whether the law is unconstitutional, as Gray found. That decision will come later this year. In the mean time, the Court ruled that the policy can proceed. Voters will have to present a valid photo ID in order to cast their ballots this month.

Martin, who asked the Court for the stay, issued the following statement:

We are pleased with the Supreme Court's decision. Election officials across the state are continuing to prepare for the start of the early voting on Monday. We now have clear direction from the Court that the law we have been operating under since last August remains in effect for the Primary Election, until further orders from the Supreme Court. The Supreme Court's prompt attention to this matter, on an emergency basis, gives the County Clerks and County Boards of Election Commissioners reassurance that the year-long preparations for the election have not been wasted.
Attorney General Leslie Rutledge, representing the other defendant — the six-member state Board of Election Commissioners — had also filed notice today in Gray's court that she would appeal Gray's ruling to the Supreme Court, although she ultimately left that appeal to Martin. She issued the following statement: 

I am very pleased that the Arkansas Supreme Court agreed with the arguments we made on behalf of the State Board of Election Commissioners that the requirement that a voter show photographic identification or sign a statement affirming his or her identity as a registered voter is not burdensome and helps ensure free and fair elections. The stay issued this afternoon provides needed clarity for Arkansas voters and election officials.
In comments to the Democrat-Gazette, attorney Jeff Priebe, who is bringing the lawsuit challenging the law, pointed out that the underlying question of whether the law violates the constitution remains.

"We're disappointed that the secretary of state and attorney general continued to want to enforce an unconstitutional voter-ID law," he told the D-G. "We look forward to presenting the entire case to the Arkansas Supreme Court."

Gan Nunnally slams primary opponent Rep. Jim Dotson for per diem shenanigans and Ecclesia ties

Posted: 03 May 2018 05:41 AM PDT


Gan Nunnally
, who is challenging Rep. Jim Dotson in the Republican primary for the District 93 seat in Northwest Arkansas, passed along an open letter attacking his opponent for slopping up almost $40,000 in expenses charged to taxpayers on top of his $39,500 base salary as a legislator, the second highest tally in the state. Nunnally also goes after Dotson for directing public money toward Ecclesia College, the tiny Bible college in Springdale that is implicated in the ongoing federal bribery case against former state Sen. Jon Woods.

Dotson, himself an alumnus of Ecclesia, has not been charged with a crime but directed $13,500 in public money toward the school. Woods is charged with participating in an alleged kickback scheme to funnel public money to the school along with Ecclesia College president Oren Paris III and former state Rep. Micah Neal, who have already pleaded guilty. Part of the scheme, according to evidence presented at the Woods trial, was to convince other lawmakers to send yet more money to the obscure school, which has around 200 students (around half of whom are enrolled in distance learning); more than $700,000 in General Improvement grants went to Ecclesia over a fifteen-month period, allotted for dubious purposes.

Nunnally, the general manager of the Nunnally Chevrolet auto dealership in Bentonville, is running for office for the first time.

The open letter from Nunnally follows:

In my first entry into politics, I have started to see some of what frustrates current voters, and why Trump's "Drain the Swamp" phrase took flight.

In my current run for the Arkansas House of Representatives District 93 seat, I have noticed several areas where I believe that traditional business acumen has not been applied by my opponent, Jim Dotson.

He ran unopposed for the District 93 seat in 2016.

Initially, when looking at the number of bills that my opponent has sponsored, you think, "Wow, this guy is really busy." After taking a closer look, it seems that "any activity" was preferred to the "right activity."

My opponent has held a number of professions, and currently that of a realtor. I am pleased that the Arkansas Realtors Association has supported my campaign as a first-timer challenging one of their own, a Real Estate agent. When I inquired as to why the group did not support Dotson, I was informed that the decision was made by their trustees, with input from their local Realtors in this district, and that after discussion of our qualifications and views on various issues relating to current real estate and small business issues in Arkansas, I was their choice. My opponent's own state association chose me, Gan Nunnally.

This year, as a House Rep, Dotson kept a base salary of $39,500, and a daily per diem of $153. With the second highest expenses in the state, Dotson turned this Rep role into a $79,489 position (over $39,989 in expenses). The position of State Representative is one of duty and service to our citizens and to Bentonville. Dotson portrays himself as "proven conservative leadership," but does not show the attention to budget and fiscal responsibility that is owed to our  community. This is one of the many reasons that career politicians are on their way out.

Additionally, as the Ecclesia College fiasco has come to light as a known criminal slush fund, it has been glossed over that Dotson was one of the top 10 donors of GIF Funds to Ecclesia. There are several problems here. First, Ecclesia as a private institution should never have been receiving public funds, and it is the responsibility of our legislators to enforce this. Second, Dotson is an alumnus of Ecclesia College. This constitutes an immediate conflict of interest, and Dotson should have never even considered this as being appropriate for his constituents, or being ethically moral in a business transaction.

Third, these monies should have been returned to the taxpayers, who are now liable to make up this debt. In ethical business, we are forced to right these wrongs when other people's money is at stake. Lastly, Dotson has tried to distance himself from the Ecclesia connection with claims that he was unaware of what was going on. This is an unacceptable response to the voters that he is asking to re-elect him, as it was his duty to thoroughly research and qualify any recipients of public funds.

My concern with how Bentonville's District 93 was being legislated was brought to my attention over the past year by several groups of concerned citizens, which prompted my commitment to run for the Arkansas House of Representatives. I feel that the facts and decisions that have been made so far deserve question, and more importantly, deserve business solutions that make sense for our community.

Youth services nonprofit referenced in Wilkins bribery plea hired Sens. Lamoureux and Hutchinson to do legal work, former director says

Posted: 02 May 2018 08:09 PM PDT


The former director of a now-defunct youth services nonprofit that appears to be referenced in the federal bribery plea agreement of former Sen. Henry "Hank" Wilkins IV (D-Pine Bluff) denied any wrongdoing in a phone interview with the Arkansas Times on Tuesday.

Jerry Walsh, the longtime director of Magnolia-based South Arkansas Youth Services, matches the description of an individual referred to as "Person #3" in the Wilkins plea, which was announced Monday. (Here's the Wilkins information filed by federal prosecutors.) SAYS itself matches the description of a nonprofit referred to as "Entity F," which for many years contracted with the state Department of Human Services to serve delinquent and at-risk youth. In the plea agreement, Wilkins acknowledged receiving kickbacks from an unnamed lobbyist doing work on behalf of multiple unnamed nonprofits in exchange for Wilkins' sponsorship of beneficial legislation. The lobbyist in the alleged scheme — called "Person #1" in the plea — fits the description of Rusty Cranford, a Little Rock lobbyist and health care executive who has been indicted in a separate federal case.

Walsh acknowledged that SAYS held a contract with Cranford Coalition, a firm operated by Rusty Cranford, but said he knew nothing about Cranford providing kickbacks to lawmakers for favorable treatment.
"I wasn't ever aware of any illegal behavior from Cranford Coalition with legislators," Walsh told the Arkansas Times. "I just thought, like a lot of people, that he was a good lobbyist." Walsh said SAYS "did not have any business arrangements with Mr. Wilkins."

Walsh said he met Wilkins a handful of times at the state Capitol and found him to be "a very pleasant man" but that he never talked to Wilkins about sponsoring particular bills.

Asked whether he or SAYS ever had direct business dealings with other legislators besides Wilkins, Walsh said the nonprofit had hired two Republican senators, both attorneys, in recent years: Sen. Jeremy Hutchinson of Little Rock and former Senate President Pro Tem Michael Lamoureux of Russellville.

Sen. Hutchinson's involvement

Sen. Hutchinson (who is Governor Hutchinson's nephew) matches the description of an unnamed "Senator A" in the Wilkins plea agreement. "Senator A" is not accused of any crime in the Wilkins plea. However, the document indicates this lawmaker closely corresponded with Wilkins and a lobbyist (who appears to be Cranford) in 2013 about three bills that Wilkins sponsored. Prosecutors say two of those bills benefited SAYS.

Walsh said SAYS hired Hutchinson as an attorney about a year and a half ago to help the nonprofit appeal the loss of a contract awarded by DHS and appeal Medicaid reimbursement decisions. It's been reported before that Hutchinson represented SAYS as an attorney in 2016, around the same time the youth services nonprofit was fighting a DHS decision to switch to a different provider to operate its residential facilities for delinquent youth (a decision that led to a political standoff and, ultimately, the state takeover of the facilities). Walsh said that when SAYS retained Sen. Hutchinson as an attorney, the senator made it clear he could not perform official government acts to benefit his clients.

"We had that meeting with him where he said what he could and couldn't do," Walsh said. "He could do legal work, but couldn't do bills on our behalf."

Asked whether SAYS retained Hutchinson as an attorney as far back as 2013 — during the time period covered by the Wilkins plea — Walsh said the agency "could have, but I never had any conversation with him about any legislation." Walsh said Sen. Hutchinson supported a major piece of juvenile justice reform legislation he opposed in 2013, the Close to Home Act.

"Hutchinson was chair of [the] Judiciary [committee] ... and he voted it out of committee," Walsh said. Committee votes are not available on the Arkansas legislature's website, but the record shows Hutchinson did not vote for the Close to Home Act when it came up in the Senate, along with most of his colleagues (including all of the chamber's Democrats and a number of Republicans).

The Close to Home Act would have potentially reconfigured the state's funding for youth services, and the state's politically influential youth service providers saw it as a threat, according to a 2016 article by writer Dick Mendel for the Juvenile Justice Information Exchange. Soon after the bill's failure, the head of the Youth Services Division at DHS, Ron Angel, resigned; Angel had been a driver of juvenile justice reform efforts in Arkansas. The federal information in the Wilkins plea agreement notes that the Arkansas Youth Services Providers Association was also among the clients of "Person #1" (again, likely Rusty Cranford).

Walsh said he didn't care for the Close to Home Act but didn't lobby against it. "I didn't think it was a good bill … [but] I didn't talk to any legislators about it. I know the Youth Providers Association was against it. I know a number of [juvenile] judges were for it and others were against it," he said. "I just didn't, you know, get the dog off the porch and get in that hunt. ... I didn't get involved."

Lamoureux's involvement

Sen. Lamoureux left the Senate to become chief of staff for Governor Hutchinson at the beginning of his term in 2015. AP reporter Claudia Lauer reported later that year that Lamoureux had been paid $120,000 in 2013 for work as a consultant for a conservative political organization called the Arkansas Faith and Freedom Coalition, which drew on money contributed by lobbyists, tobacco companies and nursing homes. Because that fee was paid to Lamoureux through his law firm, he was not legally required to disclose the payments in his annual statement of financial interest as a legislator. Lamoureux left the chief of staff post in 2016, and in 2017 he was hired by DBH Management, a lobbying firm.

Lamoureux's name also surfaced recently in testimony given in the corruption trial of former state Sen. Jon Woods. The director of a nonprofit planning and development district in Hot Springs said he'd been pressured by Lamoureux to direct grants to a private college in Springdale. That college, Ecclesia, is at the center of an alleged bribery scheme involving Woods; Rusty Cranford is also implicated in a separate alleged kickback scheme involving Woods and a different nonprofit.

Walsh said SAYS retained Lamoureux's legal services when he was still in the Senate — that is, before 2015. Walsh said he was concerned the state was treating his nonprofit unfairly and failing to follow its own procurement process.

"We knew they were going to take away our contract ... and they were not following the procedures to do that and [we] felt we needed some help, and I hired Mr. Lamoureux," he said. Walsh said he felt Lamoureux would be qualified to help SAYS because he had a background as a public defender and understood the topic of juvenile justice.

Walsh said Lamoureux, like Sen. Hutchinson, also made it clear his role as a legislator could not intersect with his simultaneous work for SAYS.

"Now, he didn't do any bills or anything like that," Walsh said. "I had the same kind of meeting with him as with Hutchinson. He said what he would do, what he wouldn't do." Walsh also said that after Lamoureux resigned to become chief of staff for Governor Hutchinson, he never asked Lamoureux for favors.

Lamoureux was among the minority of legislators who did vote for the Close to Home Act, the reform legislation that the youth service providers opposed.

The Wilkins legislation and GIF grant

The Hank Wilkins plea agreement names three specific pieces of legislation in 2013 that federal prosecutors say the former Pine Bluff legislator sponsored in exchange for payments from Person #1 (again, who is likely Cranford). Walsh said he only recalled one of those bills: House Bill 1328, entitled "an act to require DYS to appear before the legislature for any changes to Youth Provider contracts." It passed both chambers with near-unanimous support to become Act 321 of 2013.

"Yeah, I remember that. I never lobbied for that, but it was, in my opinion, a good check and balance — that they couldn't unilaterally change contracts," Walsh said.

Prosecutors say Act 321 benefited "Entity F," which is likely SAYS. They also say the passage of HB 2227, which concerned early intervention day treatment for children, benefited Entity F. Walsh said he didn't know anything about HB 2227 when a reporter read the bill title aloud, nor about HB 2209. Prosecutors say HB 2209 was favorable to the business of a different entity, not Entity F.

The Wilkins plea also names an appropriation bill sponsored by another senator, referred to as "Senator B," who has been identified as Sen. Eddie Cheatham (D-Crossett). That appropriation sent "up to $1 million" of General Improvement Fund money to the Division of Behavioral Health at DHS, which then made grants to nonprofits with the funds. After the appropriation passed, Wilkins sent letters recommending three entities receive grants, one of which was Entity F. (The other two entities match the descriptions of Preferred Family Healthcare, which employed Cranford as an executive, and a Pine Bluff youth services provider called United Family Services.) In December 2013, DHS disbursed grants to the three entities totaling about $245,000. Entity F's share was $61,282.

Cheatham told the Arkansas Times by phone on Tuesday that he recalls the GIF appropriation but didn't know about Wilkins recommending those specific grants to DHS.  "None of those are active entities in my Senate district," he said.

"As I recall, I did place some money in this legislation, $10,000," he added later in a text message. "Had no idea the other came from Wilkins and Senator A." The Wilkins plea agreement does not accuse "Senator B" of any wrongdoing.

Walsh said he remembers the GIF-funded grant in 2013. "Mr. Wilkins did sign on for a GIF with us," he said, but added, "we never talked to him about that … not about a GIF and not about any bills."

Walsh said SAYS has now turned over records of its General Improvement Fund grants to investigators. "We spent every penny on what we were supposed to spend it on, which was infrastructure and buildings," Walsh said. (As the operator of several residential facilities for delinquent youth, SAYS had significant capital overhead.)

"We gave that to the feds. The federal people. ... And they got our audit. We can show where every penny went," he said. Walsh said SAYS requested a GIF grant every year, and the one in 2013 was only the second it received after two decades of operations. "We'd asked every year for 20 years. Out of 20 years, we got two. Spent them the same way, on infrastructure."

Walsh said it was "unfortunate" that the GIF grants have now come to an end. "A lot of good was done with it. … Corrupt influence kills it for everybody," he said.

Walsh resigned from SAYS in April 2017. He said he was "forced out ... because of all this stuff," meaning the federal investigation. At that point, the nonprofit was struggling, having just lost its state contract to run the residential facilities.

"But when I left, we were meeting payroll. We were paying bills. The board president took over, and four or five months later [SAYS] filed bankruptcy," he noted.

Walsh said he believes SAYS and other clients of Cranford "were used" and predicted more legislators would be implicated in the widening federal probe.

"There's going to be a lot of people making statements. There's all kinds of allegations, and if you had any dealings with Cranford Coalition, you're going to be tainted. Some of it will be true, and some of it won't be," Walsh said.