Former State Senator Gilbert Baker indicted (UPDATED)

by Talk Business & Politics staff ( 1,872 views 

Former State Senator Gilbert Baker, R-Conway, was indicted by a federal grand jury Friday (Jan. 11) on charges of conspiracy, bribery and honest services wire fraud.

The federal indictment includes nine counts, and a PDF of the filing is available here.

Baker – a former legislator, lobbyist, UCA professor and administrator, chairman of the Republican Party of Arkansas, and one-time U.S. Senate candidate – served in the Arkansas legislature from 2001 to 2013. He was chairman of the Joint Budget Committee during his tenure.

The allegations are related to the case of former Circuit Court Judge Michael Maggio of Conway, who was sentenced in March 2016 to 10 years in federal prison for taking a bribe.

Maggio previously pleaded guilty to the charge in hopes of reducing his sentence after admitting he lowered a jury award in a lawsuit in exchange for campaign donations from Michael Morton, a nursing home operator based in Fort Smith.

The lawsuit was related to the death of a 76-year-old patient in a Greenbrier nursing home owned by Morton’s company.

Maggio accepted a $50,000 campaign donation two days before reducing a jury’s $5.2 million award to $1 million. Maggio requested to be placed in a facility in Texarkana. He turned himself in to U.S. Marshals in July 2017 to begin his prison term. Ten years was the maximum sentence for Maggio, who will have no parole and two years of supervised release. He began serving his term in the Big Sandy U.S. Penitentiary in Kentucky.

Baker’s attorneys, Richard Watts and Bud Cummins, released a statement declaring his innocence.

“Mr. Baker has consistently maintained, including several times under sworn oath, that at no time did he ask Judge Mike Maggio or Mr. Michael Morton or anybody else to do anything improper or illegal. He has also consistently maintained that at no time did anyone ask him to do anything improper or illegal. All campaign contributions in 2013 were handled lawfully and were transparently reported in public reports. After over five years of investigation, Mr. Baker is confident that the truth will finally be made known.”

The indictment filed Friday references a number of unnamed individuals, some of whom are described as lobbyists, lawyers or consultants. Individual A is listed as “a stockholder in numerous nursing homes located in Arkansas. Individual A owned Company A, a nursing home and rehabilitation center located in Faulkner County.”

That description matches Morton, a Fort Smith-based nursing home operator who denies allegations of wrongdoing in the Maggio ordeal.

Maggio was planning a run for the Arkansas Court of Appeals in 2014 and Baker was going to assist his campaign in raising funds. The indictment alleges that Baker — who was the president, secretary and treasurer of LRM Consulting, a lobbying group — “hid, concealed and covered up” the source of contributions from “straw donors and false invoices” through political action committees.

The indictment outlines a series of communications between Baker and Maggio, and Baker and Individual A between May and July 2013 that suggests Baker constructed a number of PACs and received a significant sum of money prior to Maggio reducing a sentence in the Greenbrier nursing home case.

It alleges that Individual A was “watching” the civil lawsuit that resulted in the $5.2 million ruling. It alleges that Baker texted Maggio asking him to make “a favorable decision,” according to the indictment. Baker later allegedly reminded Maggio “to act in his official capacity to benefit Individual A in exchange for Individual A providing financial support” for Maggio’s campaign. “Win lose or draw,” Baker said Individual A would support Maggio.

“Mr. Morton maintains that while he made campaign contributions to numerous candidates for the 2014 election, he never asked for anything in return from any candidate. He never discussed reducing a jury verdict in any case with anybody. Morton discussed this at length with the U.S. Attorney’s Office in 2014 and it remains the truth today,” said Matt DeCample, a spokesman for Morton.

The indictment further outlines Baker’s involvement in creating eight PACs, which he would oversee. In early July, a FedEx package arrived for Baker with $30,000 for PAC checks, an additional $48,000 for Individual E’s campaign, two $25,000 checks for Company B, and a $100,000 charitable contribution for UCA, which employed Baker in an administrative role.

Company B is described in the indictment as “a non-profit trade association that supported tort reform.”

The indictment also outlines a scheme where checks written from multiple PACs would be deposited into Company B, which in turn, were distributed to individuals who gave singular donations to Maggio’s campaign. “Baker caused $18,000 in straw donations to be contributed to Maggio’s campaign, funded by the $24,500 in ‘bonuses’ from Company B,” the indictment alleges.

The indictment also depicts an alleged bribe from Baker to Maggio from federal grant money “in excess of $10,000” in 2013. The indictment says Baker “did knowingly and corruptly give, offer, and agree to give, anything of value to” Maggio for the purpose of “intending to influence and reward Maggio in connection with a business, transaction, or series of transactions of $5,000.” Further details on this allegation, such as what was offered, how large the sum of money was, or what was promised, are not provided.