Senate, House leaders talk corruption scandals, ethics reform

As lawmakers prepare for the 92nd General Assembly amid a federal probe into political corruption overhanging the State Capitol, incoming Senate President Jim Hendren told a gathering of reporters Friday (Jan. 11) that lawmakers are working hard to restore public trust ahead of the legislative session that begins Monday.

“There is an understanding in the Senate that we are going to be held to a higher standard than in the past,” said Hendren, R-Sulphur Springs. “It involves a changing of the culture, and we’ve had a lot of discussions amongst ourselves as colleagues. I can’t control what has happened up to this point and neither can any other members of the Senate. And if there is something that comes out during the session, then we have to deal with it.”

Less than an hour after Hendren’s comments, 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.

Hendren and House Speaker Matthew Shepherd, R-El Dorado, spoke to capitol reporters as part of a pre-session forum and roundtable hosted by the Associated Press and the Arkansas Press Association. Gov. Asa Hutchinson later spoke to the same group, offering reporters a chance to pinpoint details of his legislative agenda.

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.

Not aware of Baker’s impending indictment, Hendren told reporters during Friday’s press event that the Senate is already looking at several bills for the upcoming session that will prevent former lawmakers convicted of a federal or state crime from receiving their retirements benefits for their service in the legislature.

The Northwest Arkansas senator, also the nephew of Gov. Hutchinson, mentioned the new selection committee established last year that will give senators in the 35-member upper chamber the power to bring and hear ethics complaints against any of the body’s 35 members.

“We now have an ethics committee that is prepared to deal with indictments or how we deal with those things as they are presented to (us),” said Hendren.

In highlighting his expectations for the upcoming session, the Senate Pro Tempore noted that “corruption scandals” have been ongoing at the State Capitol since he joined the legislature as a House representative in 1994. After he was elected by his chamber peers to lead the Senate, Hendren said he has made restoring trust in the institution his focus.

“I hope to restore it by correcting some of the damage that’s been done to the institution because there has been continued corruption scandals that we’ve had. So, unfortunately, it’s nothing new,” said Hendren, adding “way back in the 1990s when I was in the House we had … members going to prison and we’ve had scandals going nonstop for what seem like decades It’s culminated now and it has to stop.”

Shepherd, who said he plans to announce House committee and leadership assignments on Monday, also said ethics were a “top priority” for him in his role as the incoming Speaker, but he offered no specific legislation or rules that the House plans to adopt.

“If we don’t set a higher standard for ourselves, then all of the other things we might do seems all for naught because ultimately the public is going to have some questions in their minds,” said Shepherd. “I will say that many other things that have occurred in the past are not really gray areas, but they’ve been serious violations of law.”

Besides the Senate’s new ethics rules, Hendren said he would also support recently filed legislation that would force a state representative or senator to forfeit retirement benefits if convicted of a state or federal felony or a crime arising out of their official capacity as a state lawmaker. He also cheered the recent testing of video equipment in the Senate, which will allow the body to live-stream the chamber’s in-session business for the first time in history.

ONGOING FEDERAL PROBE
Earlier this summer, the Senate adopted its new ethics rules amid a flurry of recent federal indictments, plea deals and convictions involving bribery and corruption of public officials. In June, 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. Files, who resigned his Senate seat in early February, reported to prison in August and must pay restitution of $83,900 for his guilty plea to charges of money laundering, wire fraud and bank fraud in a scandal involving General Improvement Funds (GIF).

After Files conviction, Sen. Jeremy Hutchinson, R-Little Rock, was indicted by a federal grand jury in late August for allegedly devising a scheme to steal thousands of dollars in campaign contributions and then falsifying state campaign finance reports and tax filings. The charges are part of the illegal activity involving former lobbyist Milton “Rusty” Cranford, who has pleaded guilty to bribing Arkansas elected officials in a multi-million-dollar scheme involving a Missouri nonprofit, Preferred Family Healthcare (PFH).

Hutchinson, who is Hendren’s first cousin, is also the son of former U.S. Sen. Tim Hutchinson, R-Ark., and the nephew of Gov. Asa Hutchinson. He had been a state senator since 2011 and first came to the State Capitol as a state representative in 2000. He resigned from the 35-member body last summer after charges were filed and has denied any wrongdoing.

Two former Democratic lawmakers, Reps. Eddie Wayne Cooper of Melbourne and Henry “Hank” Wilkins of Pine Bluff, are also tied to the federal probe involving Cranford. A year ago, Cooper pleaded guilty in federal court for his role in a conspiracy to embezzle more than $4 million from a Springfield, Mo.-based health care charity. Wilkins pleaded guilty last summer to conspiring to accept over $80,000 in bribes in exchange for influencing Arkansas state legislation and transactions, including steering approximately $245,000 in GIF funds to his co-conspirators.

GIF spending was also at the root of another investigation involving former State Sen. Jon Woods and former Rep. Micah Neal, both Republicans from Springdale. In September, Neal was sentenced to three years of probation for his role in a kickback scheme concocted by former Woods and others unknown persons to steal GIF dollars. He was ordered by a federal judge to pay $200,000 in restitution.

Woods, however, was sentenced to 18 years and four months in federal prison for his involvement in a widespread kickback and bribery scheme with Ecclesia College at the center. He was ordered to prison in late September as he was awaiting an appeal. A jury convicted the former Springdale senator of 15 felony counts related to public corruption, including conspiracy to commit fraud, money laundering, and mail and wire fraud.

A SESSION AHEAD
Hendren and Shepherd later talked about their role in shepherding parts of Gov. Asa Hutchinson’s broad legislative package, which includes an omnibus transformation plan, a $110 million tax cut package, teacher raises, along with finding a way to pay for state highway construction. Hendren said as co-chair of the task force that spearheaded the governor’s 2-4-5-9 tax cut plan, he looks forward to the debate on the tax code-busting legislation, while acknowledging that the final product may not look like the original package.

In the House, Shepherd said he and Rep. Andy Davis, R-Little Rock, will be responsible for carrying the water on Hutchinson’s gaggle of more than a dozen bills to downsize 42 commissions, boards and agencies into 15 cabinet-level departments. In a one-on-one interview with Talk Business & Politics at his State Capitol office on Wednesday (Jan. 10), Hutchinson said he will kick-off the 2019 legislative session next week by asking state lawmakers to quickly approve his government transformation plan.

“This complements the work that has been done over the last number of years in regards to tax cuts and the task force, as we look at the revenue side and the spending side,” Shepherd said of the legislation to downsize state government. “So, I think it has the potential to be something that will serve our state well and set the stage for additional savings in the future.”