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Presumed Innocent (Gwen Moritz Editor’s Note)

4 min read

I hope you got a chance to read Senior Editor Mark Friedman’s law column last week, which belatedly broke the news that federal prosecutors in Little Rock had quietly dismissed last month all remaining charges against banker and businessman John Stacks.

While I firmly believe in the presumption of innocence, I used to also assume that the awesome power of the government — especially the federal government — is never wielded cavalierly. The Stacks case has challenged that assumption at every turn and, coupled with observation of several other cases, has led me to two conclusions:

♦ When the U.S. Attorney’s Office in Little Rock is involved, the presumption of a defendant’s innocence must be more than theoretic, and confidence that the power of the government is being used fairly and wisely must be tempered.

♦ Appointed judges not beholden to the whims of an excitable electorate need to be part of our state court system as they are in the federal justice system.

I don’t have room in this space to dissect the devilish details of the Stacks case, the outline of which may be familiar to you by now. A tornado destroyed a barn on Stacks’ property at Damascus in Van Buren County in 2008, and Stacks availed himself of a half-million dollar Small Business Administration disaster loan to replace equipment owned by his Mountain Pure bottled water business that had been stored in the barn.

Somehow he and the SBA got crossways over the paperwork after the loan had already been granted, and Stacks — whose authoritative personality does not engender sympathy — ended up having his bottling plant in southwest Little Rock raided by federal agents in 2012. The raid was either a quasi-military invasion or a standard search, depending on which side you believe, and Stacks was furious. He produced an amateurish video reenactment of the raid, and his company and several employees sued (unsuccessfully) the federal agencies involved.

In December 2013, Stacks was indicted on 11 felony counts accusing him of defrauding the government when he got the loan.

Stacks denied doing anything wrong at all, and he went on trial in September 2014. We don’t have nearly enough staff to devote two weeks to gavel-to-gavel coverage of any trial, but I did go to U.S. District Judge Leon Holmes’ courtroom to hear Stacks testify in his own defense and submit to cross-examination.

I felt he had a plausible, believable explanation for everything the prosecutors threw at him, but I didn’t second-guess jurors who heard far more testimony than I did. They found Stacks guilty on seven counts and hung on three. (Prosecutors dismissed one count before the jury began deliberating.)

But Judge Holmes did second-guess. In a detailed 46-page opinion, he reversed the jury’s conviction on two counts and ordered a new trial on the other five convictions, saying “the evidence preponderates sufficiently heavily against the verdict that a serious miscarriage of justice may have occurred.”

It is too much to hope that federal prosecutors would stop spending taxpayer resources on a case so tenuous. They appealed Holmes’ order to the 8th Circuit Court of Appeals, but the appeals judges weren’t inclined to overrule “a thorough, reasoned” ruling by the judge who heard all the evidence.

Slapped down again, prosecutors finally offered to dismiss the charges if — and this is important — Stacks promised not to seek attorneys’ fees and costs, which federal law allows in cases of frivolous prosecution. Had he not agreed to that, the defiant U.S. Attorney’s Office was prepared to continue using tax dollars to beat this dead horse.

Pat Harris, the first assistant to U.S. Attorney Chris Thyer, continues to insist that “we had evidence that (Stacks) had defrauded the United States.” Stacks says it cost him at least $10 million in direct and indirect costs to defend against charges that the prosecutors couldn’t prove to the satisfaction of the judge.

And this case, combined with the recent action the other U.S. District Judge Holmes — P.K. in Fort Smith — has taken to punish abusive class-action attorneys, underscores the freedom that thoroughly vetted, appointed federal judges have to do what they believe is right. They don’t have to worry about an unpopular decision being used against them in a dark-money campaign ad. Our state court system needs judges like that, specifically at the Supreme Court level.


Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.
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