Arkansas Senate adopts new ethics policy, allows select committee to begin work

One day after a former Fort Smith senator was sentenced to prison on federal money laundering and fraud charges, the Arkansas Senate released and adopted pending rules to establish a select committee that will have the power to bring and hear ethics complaints against any of the body’s 35 members.

During the Senate’s first out-of-session business meeting in nearly two decades with 21 members in attendance on Tuesday (June 19), the chamber adopted a bipartisan draft of a new, amplified ethics policy Senate leaders said they hope will clearly define legislative conduct, prohibited acts and conflicts of interests.

Senate Pro Tempore-elect Sen. Jim Hendren, R-Gravette, told his fellow chamber members that if lawmakers failed to act immediately they would lose the public’s confidence in the body’s ability to police its own members. To make his point, the Senate leader said the chambers’ ethics rules ranked “near the bottom” compared to similar self-policing regulations adopted by assemblies in the 49 other states.

“I think people deserve more. We’ve got work to do, and this is not something that we just pulled out of the air in recent days. In fact, it is something that we’ve been working on for months,” said Hendren. “I can’t get past the fact that since I’ve been here, three of my colleagues are going or will soon be going to prison for unseemly conduct. We’ve got to start taking concrete action to right the ship.”

Hendren’s comments came after 30 minutes of debate on the optics and timing of adopting an enlarged version of the Senate’s ethics rules amid a flurry of recent federal indictments, plea deals and convictions involving bribery and corruption of public officials.

On Monday, former Arkansas Sen. Jake Files, R-Fort Smith, was sentenced to 18 months in federal prison by U.S. District Judge P.K. Holmes III. He will report to prison on Aug. 2, 2018, and must pay restitution of $83,900. He resigned his Senate seat in early February.

Files entered a guilty plea on Jan. 29 to one count of wire fraud, one count of money laundering, and one count of bank fraud. Court filings show between August 2016 and December 2016, while serving in the Arkansas State Senate, Files used his office to obtain General Improvement Funds (GIF) “through fraudulent means and for personal gain.”

Two weeks ago, several senators called for the resignation of Sen. Jeremy Hutchinson, R-Little Rock, who is tied to allegations in a multi-million-dollar plea agreement with indicted former Arkansas lobbyist Milton “Rusty” Cranford. Last week, Talk Business & Politics identified Sen. Hutchinson as the previously unnamed “Senator A” mentioned in federal court filings and Cranford’s plea agreement.

That federal deal had implicated the Arkansas state senator, who is the nephew of Gov. Asa Hutchinson, for allegedly accepting more than $500,000 in cash and illegal inducements to provide services to Cranford and those associated with Springfield, Mo.-based Preferred Family Healthcare (PFH).

In addition to Sens. Files and Hutchinson, a federal jury returned a guilty verdict in early May against former Republican Sen. Jon Woods of Springdale and consultant Randell Shelton for their involvement in a widespread kickback and bribery scheme. Over the past two years, other past senators and House members in both parties have also been indicted and charged for similar crimes.

NO MORE ‘LEGALISM’
Sen. Alan Clark, R-Lonsdale, who voted against adopting the new rules, questioned whether adopting the new policy change that has no legislative power will change the behavior of Senate members that knew they were breaking the law.

“We don’t need more legalism,” Clark said of new Senate ethics rules. “The people who did wrong knew they were doing wrong. There didn’t have to be more rules for them to know that what they were doing is wrong.”

Clark also said the Senate refused to support ethics legislation in the 2017 session sponsored by Republican Sens. Linda Collins-Smith and Bryan King of Pocahontas and Green Forest, respectively. Both of those senators were defeated in recent Republican primaries to return to the 35-member chamber.

“They (Collins-Smith and King) tried to pass a law because some people knew that some of these things were happening,” said Clark.

Instead of approving new Senate ethics rules that sat on the shelf for nearly 50 years, the Garland County lawmaker said, the chamber should revisit both bills by the outgoing senators in the upcoming 2019 session that address business relations between lawmakers and Medicaid providers and prevent attorney- and consultant-legislators from representing clients before the Senate.

Collins-Smith, who was one of the 21 Senate members attending the chamber’s first pre-session business meeting since 1998, called the ethics proposal a distraction from the more serious issues of directly dealing with lawmakers who willfully and knowingly engaged in unethical conduct.

“We should have dealt with what the public wants to see happen, and that’s the criminal issue at hand and that these things should be looked at … and take the time necessary before we did what we did today,” said Collins-Smith, who called for Sen. Hutchinson’s resignation nearly two weeks ago.

QUESTIONS ABOUT CONFLICTS
Several senators also asked questions concerning the more robust financial disclosure requirements and conflict of interest rules. Democratic Sens. Larry Teague and Linda Chesterfield of Nashville and Little Rock, peppered Hendren with several questions on how often lawmakers would have to notify the public of possible conflicts concerning committee assignments and legislation brought to the full body.

For example, Teague, an insurance agency owner, asked if he had to withdraw his participation or notify the public for every bill that came before the Senate Insurance Committee that directly or indirectly affected him. Hendren said the Senate select panel would decide those issues, along with clarifying procedures to implement the new rules and determine ethics training for Senate members.

Under the bipartisan proposal drafted by Hendren and Sens. Bart Hester, R-Cave Springs, and Keith Ingram, D-West Memphis, the upper chamber will establish a newly-created “Senate Select Committee” that will further develop rules that define and govern the ethical expectations of the 35 senators. One change pushed that differed from Hendren’s earlier draft is to expand the Select Committee from five to eight members.

Chief among the changes is a new policy that more clearly define prohibited Senate conduct and conflicts of interest. If adopted, that policy would prohibit senators from accepting any benefits in the performance of their legislative duties or anything offered with the intent to influence official conduct beyond their state-approved compensation.

The new rules include stronger financial disclosure requirements for Senate members, including a better accounting of total household income a senator receives – ranging from salaries, investment profits and real estate holdings to retainers, consulting fees, business income and other compensation.

The new policy, if adopted, would also would prevent a senator from knowingly seeking, accepting, using or granting public funds for a purpose other than that approved by state law, as well as making a false statement concerning the meting out of taxpayer-funded dollars. Hendren said he hopes the select committee will complete its work over the next four months and approve final ethics rules ahead of the 2019 session.

In other Senate business, Arkansas Chief Justice Dan Kemp swore-in senators-elect Breanne Davis and Ricky Hill. Davis, a Republican, easily won a special election against Democratic challenger Teresa Gallegos for the Senate District 16 seat vacated after the death Sen. Greg Standridge of Russellville.

Hill, a Republican from Cabot, defeated Democrat Steven McNeely in a special election for the Senate District 29 seat that was vacated by former Sen. Eddie Joe Williams, who took a position in the Trump administration.