AG’s office investigating legislators for fraud; Rutledge releases personnel records

Arkansas Attorney General Leslie Rutledge’s office is investigating more than one legislator for fraud who has not yet been charged with a crime, her office said Wednesday (Aug. 22) during a sit-down session with reporters.

Meanwhile, Rutledge released personnel files from her time as an employee at the Department of Human Services in 2006-07 ahead of them being released as a result of a lawsuit by a staff member at the Democratic Party of Arkansas.

Five former Arkansas legislators have been convicted or pled guilty to corruption charges as a result of a federal investigation, and one is already serving a prison sentence. Lobbyist Rusty Cranford pleaded guilty June 7 to bribing Arkansas elected officials on behalf of the Springfield, Mo. charity Preferred Family Healthcare, for which he worked as an executive.

On Tuesday, Rutledge’s office announced that Preferred Family Healthcare’s former billing director, Helen Balding, had been arrested for allegedly making false statements that caused the Arkansas Medicaid Program to overpay PFH $2.2 million from January 2015 to October 2017. Preferred Family’s director of operations, Robin Raveendran, was arrested in June.

Lloyd Warford, deputy attorney general, wouldn’t confirm how many legislators are being investigated or whether they are current or former officeholders.

“We’re going to follow the facts wherever they lead,” he said. “There are legislators who were closely associated with Cranford. There were legislators who were in business with Cranford. There were legislators who were routinely receiving money from one thing or another from Cranford. Whether those transactions were legal or not is all under investigation.”

Warford said investigators have at least 4 million documents in a vault and another 200 gigabytes of information they have collected from the Department of Human Services. They are investigating legislators and other behavioral health providers and are working with “very limited coordination” with federal authorities.

“It’s a very complicated system,” he said. “Candidly, a lot of what was done was done with the blessing of the Legislature and the blessing of DHS, so when regs are promulgated to allow a certain thing to happen a certain way and it’s done that way, that would not be Medicaid fraud. It might be wasteful and inappropriate. It might be something that needs to be reconsidered by the administration, but that would not be fraud.”

Warford said the state had spent $148 million more for group psychotherapy sessions than it should have. Cranford, he said, “had a lot to do with keeping those rates in place and allowing that system to be in place, but all of that was approved by the powers that be at the time, so that would not be considered Medicaid fraud.”

He said that between the attorney general and federal investigations, “I think it’s reasonably certain that somebody else is going to be charged by one of us.”

RUTLEDGE RELEASES PERSONNEL FILES
Also, Rutledge released eight pages of previously unreleased personnel files reaching back to 2007, when she left her employment with the Department of Human Services as an attorney in the foster care system. She said she had obtained the pages today.

The paperwork was ordered released Monday (Aug. 20) by Judge Tim Fox in a ruling in a Freedom of Information Act lawsuit filed by Democratic Party of Arkansas Communications Director Reed Brewer.

The eight pages released by Rutledge shed some light on parts of her personnel file that previously had been published in 2014. Rutledge worked for DHS as an attorney in the foster care program from October 2006 until Dec. 3, 2007, when she left abruptly to work for Gov. Mike Huckabee’s short-lived presidential campaign. She flew to Delaware the day after resigning to provide legal advice to his efforts to qualify for all 50 state ballots.

Rutledge said her supervisors had asked her to give them two weeks’ notice, but she left immediately because the campaign was on a tight timeline.

“I was like, ‘Well, no, I can’t do two more weeks. It’s a presidential campaign. It may be over within two weeks,’” she said.

She said that she had prepared her cases before leaving her job so other attorneys could complete them.

Rutledge’s previously released personnel file appears to be marked as a “voluntary” termination that was then changed to a different coding. Rutledge said she resigned. She provided a letter of resignation from her written to Breck Hopkins with the Office of Chief Counsel. Several emails from staff members at the time referred to her resigning or quitting.

On Dec. 12, 2007, Lisa McGee, a supervisor, wrote in an email, “Please put a do-not rehire on Leslie. Breck said I can request this.”

After the campaign ended, Rutledge worked for the National Republican Congressional Committee until the November 2008 election, when her job was downsized.

At that point, she filed for unemployment benefits. She said she received those benefits for a time in 2009 to help with living expenses in Washington, D.C. A DHS form associated with those benefits stated that she had been discharged for “gross misconduct.”

Rutledge said she did not learn that her files described her separation from DHS this way until 2014, the year she was running for attorney general.

The eight pages released by Rutledge Wednesday include two pages describing the disciplinary actions taken against her while an employee. One states that she failed to return two phone calls made by a social worker with Arkansas Children’s Hospital on Oct. 25 and 26, 2007. The explanation of the cause of disciplinary action cuts off midsentence, and the form has no signature from a supervisor or Rutledge and no date.

A second page, which is dated May 2, 2007, is signed by Rutledge and Forrest. That page said that on April 24, Rutledge had failed to calendar a court date and then was unable to persuade the court to complete the hearing. It said she appeared in court 15 minutes after the hearing. In a second case, she did not perform an order of custody for a foster child returned to custody. No preparation was done for another case, which resulted in important information not being presented to the court. In another case, a motion to transfer occurred in the wrong court.

“None of the instances that are listed here resulted in any harm to any cases or most importantly, any harm to any children,” Rutledge said. She said she was 15 minutes late to the one case because she was appearing in another court at the same time.

On March 30, 2007, Forrest had given Rutledge all “3s” on a rating scale of 1 to 5 in her Career Ladder Incentive Program. On the form, “3” is defined as “always meets performance expectations.”

Asked if there were personality conflicts with anyone in the office, she said, “Well, sure. I mean, yeah, we’re dealing with individuals.” She said she had decorated her workspace with photos of herself with Huckabee and now Gov. Asa Hutchinson, and that comments were made in the office about her Republican affiliations. She did not believe her work was negatively affected.

“They asked me to stay,” she said. “I told them I couldn’t stay, and so whether they got mad because I didn’t give two weeks’ notice or for political reasons, I don’t know the answer to that.”

Looking back, she said she would have given the two weeks’ notice if it would have produced a different outcome with her personnel file.

“If I could turn back time, as Cher says, then I certainly would have worked those two weeks because then they may not have changed my files, and this may not have been something where out-of-state money spent a couple of million of dollars on my head distorting my record and my reputation,” she said.

Rutledge said she believed that Judge Fox had erred in ordering the paperwork released because of the precedent it sets for other state employees. She said she hopes the Department of Human Services appeals the ruling.

DHS spokesperson Amy Webb said the agency was still determining its next steps regarding the lawsuit. In reaction to Rutledge’s other comments, Webb said she had “No additional comment other to say she voluntarily left. She was not fired. And she was not notified of the change to her re-hire status as she should have been.”

Brewer’s attorney, Chris Burks, released a statement saying, “The FOIA lawsuit forced Attorney General Rutledge to finally do what she should have done four years ago. The public has long deserved to know why the Department of Human Services determined she committed ‘gross misconduct’ and could not be rehired as an attorney. We have contacted Judge Fox’s office to ensure that the secret portions of her personnel file are released to the public. We hope to have the full and accurate documents to review by the end of this week.”