Missouri healthcare group at center of federal bribery scheme hires former Arkansas chief justice

The Springfield, Mo.-area nonprofit at the center of a multimillion dollar bribery conspiracy announced Monday (April 16) the hiring of former Arkansas Chief Justice Betty Dickey to help the agency add additional oversight and accountability controls.

According to a news release from Preferred Family Healthcare (PFH) with offices in Kirksville and Springfield, Mo., Dickey was hired as special assistant to Michael Schwend, president and CEO. The multi-state health care organization was involved in a charity bribery scheme that has led to federal indictments against a former employee and lobbyist, a former state lawmaker and a Pennsylvania executive.

In her new role, Dickey will serve as a liaison to the agency’s executive leadership team concerning the nonprofit’s Arkansas operations, company officials said. PFH has nearly 50 health care clinics across Arkansas that provide a variety of behavioral, mental health and substance abuse disorder treatment services.

“Betty Dickey has had a distinguished career serving the people of Arkansas,” Schwend said in a statement. “She is an important addition to our leadership team and we look forward to drawing on her significant experience and expertise in the service to our patients. We are turning a page, and Betty will play key role in that effort.”

Added Dickey: “I welcome the opportunity to serve Arkansans again by joining Preferred Family Healthcare to ensure our operational excellence matches the clinical excellence for which we are known.”

PFH officials declined to answer questions from Talk Business & Politics about the details of Dickey’s hiring, including her salary, job duties, and the timeline of her tenure. Information provided in the news release noted her duties would include “compliance and standards adherence” and “accountability,” but offered no details on Dickey’s duties or how much her job relates to an ongoing federal bribery probe involving the nonprofit.

LOBBYIST TIES, FEDERAL PROBE
In late February, U.S. Attorney Timothy Garrison for the Western District of Missouri announced that Milton Russell Cranford, of Rogers had been indicted by a federal grand jury for his role in a nearly $1 million bribery conspiracy involving PFH.

That indictment alleges Cranford and co-conspirator Eddie Wayne Cooper, a Democrat who served in the Arkansas General Assembly from 2006 through 2011, received $264,000 in secret kickback payments from co-conspirator Donald Andrew Jones of Willingboro, N.J., who was paid nearly $1 million by the Springfield nonprofit in a bribery scheme that lasted almost six years, from February 2011 until January 2017.

In addition to the conspiracy, the indictment charges Cranford with eight counts of receiving a bribe by an agent of an organization that receives federal funds. At the time, Cranford was a lobbyist and an employee of PFH, formerly known as Alternative Opportunities Inc. He also served as an executive for the charity’s operations in Arkansas – a role similar to Dickey’s assignment.

Cooper also pleaded guilty in federal court in February for his role in a conspiracy to embezzle more than $4 million from the Springfield healthcare group. A week before Christmas, Jones waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David Rush to charges that he participated in the bribery scheme to steal federal funds from PFH.

Last month, former Arkansas lawmaker Rep. Hank Wilkins of Pine Bluff also admitted to taking a $100,000 bribery from Cranford in a Feb. 22 statement to the FBI, the same day the Rogers lobbyist was arrested for his role in the alleged bribery scheme with PFH executives. Wilkins has since resigned from his position as Jefferson County Judge.

PFH FINANCIALS
To date, no PFH executives had been indicted for the nonprofit’s role in the broadening federal investigation, which is still ongoing. Nearly three years ago, PFH merged with Alternatives Opportunities to create one of the largest behavioral health organizations in the Midwest with operations in five states.

According to PFH’s most recent 990 tax filings and financial statements with the IRS, the Springfield. Mo.-based nonprofit had a huge increase in program service revenue following the 2015 merger. For the fiscal period ended June 30, 2016, the healthcare group’s service revenue jumped 172% from $66.6 million to $181.2 million.

The Springfield healthcare group also has a net surplus of $79.5 million despite its operating status as a 501c3 charity. Under IRS rules for charities, there is no limit on excess reserves a nonprofit can keep on hand to maintain its federal tax-exempt status.

Most of PFH’s executive team also received compensation packages that are more in line with privately held companies. For example, Cranford’s salary at the end of fiscal 2016 as the nonprofit’s executive vice president of Arkansas operations amounted to nearly $275,000 annually, the 990 tax filings show. Cranford’s Little Rock-based lobbying firm, Cranford Coalition, was also paid more than $547,000 for public relations consulting services during the same period.

Schwend, the nonprofit’s longtime president and CEO, received an annual compensation package at the end of fiscal 2016 valued at more than $986,000, IRS tax records show. Eight other PFH executives also had annual pay in the range of $273,000 and $506,000 in fiscal 2016. In addition, more than $127 million of the nonprofit’s $170 million in expenses was used to pay salaries of 4,927 employees on the nonprofit’s payroll.

The IRS has not yet posted the Missouri health care group’s financial records for fiscal 2017.