Cranford pleads guilty to multi-million dollar bribery scheme involving Arkansas legislators

by Talk Business & Politics staff ([email protected]) 1,666 views 

Milton “Rusty” Cranford of Rogers, Ark., pleaded guilty Thursday (June 7) in federal court to bribing Arkansas elected officials in a multi-million-dollar scheme, and then along with other charity executives, embezzling millions of dollars from a Springfield health care organization.

Acting Assistant Attorney General John Cronan of the Justice Department’s Criminal Division and U.S. Attorney Timothy Garrison for the Western District of Missouri made the announcement. In late February, Garrison announced that Cranford, a former Little Rock lobbyist, had been indicted by a federal grand jury for his role in a nearly $1 million bribery conspiracy involving the Missouri nonprofit.

Cranford entered into an illegal kickback scheme whereby Cranford paid over $600,000 in illegal kickbacks to a charity executive in exchange for more than $3.5 million in payments made to The Cranford Coalition.

Cranford also acknowledged his role in a second illegal kickback scheme involving the charity’s contract with Philadelphia, Pa.-based political operative Donald Andrew Jones, also known as “D.A.” Jones, and another charity employee, former Arkansas State Rep. Eddie Wayne Cooper. In exchange for Cranford’s role in facilitating the charity’s contract with Jones for lobbying and political advocacy, under which the charity paid Jones almost $1 million, Cranford received kickbacks totaling $219,000 from Jones, $18,000 of which Cranford provided to Cooper, and Cooper received another $45,000 directly from Jones. In separate but related cases, Jones and Cooper previously entered guilty pleas acknowledging their roles in that kickback scheme.

Cranford and co-conspirator 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 Jones, also known as “D.A.” Jones, of Willingboro, N.J., who was paid nearly $1 million by the charity in a bribery scheme that lasted almost six years, from February 2011 until January 2017.

On Dec. 18, Jones waived his right to a grand jury and pleaded guilty before U.S. Magistrate Rush to charges that he participated in the conspiracy to steal from the Missouri nonprofit  that received millions in federal funds.

Cranford was a lobbyist and an employee of Preferred Family Healthcare, Inc. (formerly known as Alternative Opportunities, Inc.), a nonprofit corporation based in Springfield. Cranford served as an executive for the charity’s operations in Arkansas. Cranford also operated two lobbying firms, The Cranford Coalition and The Capital Hill Coalition.

Cooper worked for The Cranford Coalition as a lobbyist and held a full-time position as regional director for Preferred Family Healthcare. Jones was a Philadelphia, Penn.-based political operative who owned and operated the firm, D.A. Jones & Associates, which purported to provide political and advocacy services, including consulting, analysis, and public relations. Neither Cooper nor Jones were charged in the indictment with Cranford, and each have pleaded guilty in separate cases.

Cranford recommended to the charity’s chief financial officer, chief operating officer and CEO to enter into a contractual arrangement with Jones for lobbying and advocacy services. Cranford influenced the charity in its award of the contract, the indictment says, then demanded payments to himself and Cooper of a portion of the funds Jones obtained from the charity in exchange for Cranford’s influence on Jones’s behalf.

The charity paid Jones $973,807 to provide advocacy services for the charity, including direct contact with legislators, legislators’ offices, and government officials, to influence elected and appointed public officials to the financial benefit of the charity, including attempting to steer grants and other sources of funding to the charity. Jones paid $264,000 to Cranford and Cooper. Most of the funds were paid to Cranford or one of his firms.

By pleading guilty, Cranford admitted that he and other Preferred Family Healthcare executives paid bribes to Arkansas State Sen. Jonathan Woods, Arkansas State Rep. Henry Wilkins IV, a person identified in court documents as “Arkansas Senator A,” and others, to provide favorable legislative action for Cranford, his clients, and Preferred Family Healthcare. In exchange for the bribes paid by Cranford, the officials identified in the Information steered Arkansas General Improvement Fund (GIF) money to Preferred Family Healthcare and other Cranford clients; held up agency budgets; requested legislative audits; and sponsored, filed and voted for legislative bills that favored the charity and Cranford clients.

“Rusty Cranford’s plea of guilty today resulted from the hard work and close cooperation between our office, the Western District of Missouri, the Eastern District of Arkansas, the Public Integrity Section of the Department of Justice, the IRS Criminal Investigation Division, and the FBI,” Duane Kees, United States Attorney for the Western District of Arkansas, said in a statement. “Our office will continue to work with our partners in this investigation to bring to justice all those involved in public corruption.”

A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

The case was investigated by IRS-Criminal Investigation, the FBI and the Offices of the Inspectors General from the Departments of Labor, Health and Human Services, Housing and Urban Development, Veterans Affairs, and the Federal Deposit Insurance Corporation. It is a combined investigation with the Western District of Arkansas, the Eastern District of Arkansas, and the Eastern District of Pennsylvania.  The case is prosecuted by Assistant U.S. Attorney Steven Mohlhenrich of the Western District of Missouri and Trial Attorneys Marco Palmieri and Sean Mulryne of the Criminal Division’s Public Integrity Section.