No evidence of bribery against ‘Senator A,’ Sen. Hutchinson’s attorney says

An attorney for Sen. Jeremy Hutchinson, R-Little Rock, said Monday (June 11) that an ongoing federal multi-million-dollar bribery probe concerning the mysterious “Senator A” does not show any evidence the Little Rock senator benefited or received anything illegally in the performance of his duties in the Arkansas Senate.

While confirming Sen. Hutchinson is indeed the previously unnamed “Senator A” in recent federal court filings, Little Rock attorney Tim Dudley bristled at any suggestion the Republican lawmaker and nephew of Gov. Asa Hutchinson had accepted a bribe during his long tenure in the Arkansas State Senate.

Dudley’s comments came in an interview with Talk Business & Politics following last week’s announcement that former Arkansas lobbyist Milton “Rusty” Cranford, in a federal plea agreement, had implicated the Arkansas state senator 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).

“Their basic premise is Jeremy Hutchinson was hired by PFH … to do legal work and was paid a retainer. And he did the work. And we can show that he earned his money,” Dudley said of U.S. Attorney Timothy Garrison for the Western District of Missouri’s announcement Friday that Cranford pleaded guilty to bribing Arkansas elected officials in a multi-million dollar scheme, and then along with other charity executives, embezzled millions of dollars from the Missouri nonprofit.

Concerning allegations Hutchinson accepted a bribe because he did something that benefited PFH, Dudley said there is no evidence in the federal indictment showing the Arkansas senator used his public office to engage in a so-called “quid pro quo” or favor-for-a-favor bribery arrangement.

“If you are a pharmacy and a customer comes in and buys a prescription from you, and you are a pharmacist in the legislature and the pharmacist does something that benefits a customer – is that a bribe?” asked Dudley.

“That’s the [federal investigator’s] theory in this case and if that’s bribery, then any legislator-lawyer better get out of the legislature — or maybe any legislator-businessman — because there’s always going to be times where they might do something that benefits for someone they are working. What this [Cranford plea agreement] doesn’t do is it doesn’t allege any ‘quid pro quo,’” he said.

Dudley also stated work Hutchinson did for PFH was routine legal activity unrelated to his position as an Arkansas legislator.

“It was drafting and reviewing contracts, doing memorandums of understandings, handling litigation and dealing with DHS [state Department of Human Services]. I mean it was routine stuff that didn’t have anything to do with legislation,” he said.

HUTCHINSON: ‘PREPOSTEROUS’ ALLEGATIONS
Earlier Monday, Hutchinson told Talk Business & Politics in a brief phone call the allegations in a 20-page plea agreement were “preposterous,” but referred all further details concerning Cranford’s plea agreement to Dudley. In his 30-minute conversation with Talk Business & Politics, an animated Dudley walked through each allegation in the plea agreement concerning Hutchinson.

For example, court filings alleged in exchange for money and other things of value, Hutchinson and other Arkansas lawmakers performed legislative acts that were favorable to Cranford and PFH executives, clients and associated entities. In one instance, federal prosecutors allege Hutchinson and former Rep. Hank Wilkins, D-Pine Bluff, conspired to propose to introduce House Bill 2209 in 2013 to end a rating system that would force PFH and other health service providers to adhere to certain state legislation.

According to the plea agreement, at Cranford’s request, Hutchinson used his position on the legislative audit committee to initiate an audit of the company that administered the rating system. During the legislative session, Cranford allegedly also arranged a meeting with representatives of the rating company and the two Arkansas lawmakers where an agreement was worked out regarding the implementation of a healthcare rating system that was favorable to the former lobbyist and his clients.

In speaking directly about those allegations, Dudley said Hutchinson was hired by PFH two or three months after Wilkins introduced HB 2209. He also noted the House bill died in committee, as stated in federal court filings, and that the audit federal investigators said was initiated by Hutchinson was never performed.

“There was no audit. That is just [blatantly] false,” Dudley said.

The Little Rock attorney, whom Hutchinson hired nearly a year ago, also downplayed allegations Hutchinson worked to advance legislation to change the definition of the term “independent contractor” for purposes of overtime and other workplace benefits. According to federal court filings, Hutchinson filed legislation around March 2015 that was to include specific statutory language that was emailed to him on March 4, 2015, by an unknown “Person #9.” A later bill, House Bill 1540, was filed by Rep. Robin Lundstrum, R-Springdale, and at least a dozen other co-sponsors, that benefited Cranford and his clients, the plea agreement alleges.

“[Hutchinson] voted in favor of HB 1540, to the benefit of the charity and other Cranford clients,” federal court documents show. “Specifically, at the direction of Person #9, who worked at the charity and was a business partner with Arkansas Senator A and Cranford, [Hutchinson] filed Senate Bill 932, which was another shell bill … in or about March 2015, Arkansas Senator A voted in favor of HB 1540.”

Showing Talk Business & Politics a copy of the bill in question that is now Act 945 of 2015, an exasperated Dudley said that HB 1540 made only a few minor editing and technical changes to a law that was already enacted by prior legislation.

The bill changed the word “such” to “the”; added the word “or” to one sentence; and added an emergency clause. It had 33 bipartisan House co-sponsors and one Senate sponsor, Sen. Bart Hester, R-Cave Springs.

“This law was already on the books, this was simply a change to existing law,” Dudley said, highlighting the three technical edits. “That’s the entire change to the bill. I can’t tell that they changed the law at all.”

Dudley also addressed allegations in the plea agreement that Hutchinson and other lawmakers helped to steer more than $3 million in state funds to so-called General Improvement Funds to “Entity H,” which was also a client of Cranford now identified as Pine Bluff nonprofit Teach for America. Dudley admitted the Arkansas senator sponsored the two bills that provided GIF funding to the pro-charter school nonprofit but said Hutchinson never received any money for advancing that legislation.

“Teach for America never paid Jeremy Hutchinson a dime. And there is no allegation … that Rusty Cranford ever gave Jeremy money to lobby for Teach for America,” Dudley said. “Jeremy did not have any control over whether that [$3 million] ever got paid, and if so, how much it got paid. That was the governor’s decision.”

Dudley said Hutchinson has met with Teach for America officials to learn more about the nonprofit’s work of recruiting college graduates, training them, and then placing them to work mostly in public charter schools across the country.

“He supports that program because he believes in it,” Dudley said, adding bills sponsored by Hutchinson were overwhelmingly approved in both the House and Senate. “Why does anybody need to bribe Jeremy for a bill that was supported by Walter Hussman and the Waltons – and they kicked in additional money [so] why did he need to be bribed on a bill that was going to fly through both houses anyway? And what was the bribe?”

INDICT OR FIGHT
Dudley also said he has been contacted by federal investigators in the ongoing federal bribery and embezzlement probe but would not divulge those conversations publicly. He also said Hutchinson had not yet been indicted, noting he was frustrated that federal prosecutors identified his client as “Senator A” fully knowing that he could be easily recognized through other publicly available information.

“They did this knowing that Jeremy was going to be identified,” he said. “So, they are besmirching his reputation knowing that he has no legal way to fight what they are saying. If they are going to make these claims then they ought to indict him, then he can fight them.”

Chris Givens, spokesperson for U.S. Attorney Cody Hiland, who represents the Eastern District of Arkansas, declined to offer more information on developments in the case.

“At this time, we cannot comment on anything related to the Cranford plea detail,” Givens told Talk Business & Politics when asked if a special grand jury had been convened or a standing grand jury might hear these matters.

Last week, Gov. Hutchinson said he needed to take time to first review details of the ongoing federal probe that has entrapped several Arkansas lawmakers, lobbyists and other officials, but would not speculate if “Senator A” was his nephew.

“I did review the actual statement in the plea and the indictment that has been entered. It was obviously a quick review and it’s a very lengthy indictment of the actual statement and it is a complex case and so this needs to be reviewed much more carefully,” Hutchinson told reporters. “But without any doubt, the allegations that are contained in the indictment and factual statements are profoundly serious and undermine the system of legislative process that the public relies upon and undermines the confidence that the public has in their government.”

When pressed during a pen-and-pad session with reporters on Thursday if he would ask his nephew to resign if he turned out to be “Senator A,” Hutchinson reiterated “if Senator A is indicted, then he or she should resign.” A spokeswoman for Gov. Hutchinson said the governor would not comment further today concerning last week’s press conference but would publicly address the widening federal investigation soon.

Dudley, however, said he does not believe Sen. Hutchinson should step down unless he is indicted and then convicted, adding the Little Rock senator has already announced he will officially leave the Senate in January 2019.

“I don’t know if [Jeremy] does or not, but I disagree with the governor on that,” Dudley said on calls for his client to step down. “Under our system, you are innocent until proven guilty. I don’t think a charge is grounds for resignation.”