by Gwen Moritz
Posted 3/5/2018 12:00 am
Updated 2 weeks ago
I’ve never been a depressive type, and I think of myself as skeptical rather than cynical, but the past couple of years have done a number on my psyche. Has government corruption become the rule rather than the exception?
I returned to Little Rock from a 10-year sojourn in Tennessee in the summer of 1999. That was a few months after the wide-ranging Whitewater investigation ended with the Republican-controlled Senate declining to convict Bill Clinton and smack in the middle of the federal prosecution of former state Sen. Nick Wilson and his gang of thieves.
Since then, however, the public corruption I’ve observed on the state and national level has been of the scattered, individual type. There have been cases of official corruption, but Lu Hardin, Martha Shoffner, Hudson Hallum, Paul Bookout, Michael Maggio, etc., have all been corrupt in different ways at different times.
Yes, we had Operation Delta Blues, in which a number of east Arkansas law enforcement officers were in league with drug dealers. And some employees of the Arkansas Department of Human Services facilitated an astonishingly widespread conspiracy to steal federal money intended to feed poor kids. Disturbing and disappointing, but those involved were rank-and-file government employees, not elected officials.
The General Improvement Fund scandal in Arkansas and a related embezzlement case in Missouri have been especially disheartening, coming at the same time that people who worked to get President Trump elected are dropping like flies in Mueller’s investigation.
Federal prosecutors in the Western District of Arkansas, as everyone knows, elicited a guilty plea out of former state Rep. Micah Neal, R-Springdale, 14 months ago. He admitted steering grants from the controversial GIF to a couple of nonprofits in exchange for kickbacks.
Neal claimed he was enlisted for the scheme by a state senator, and that turned out to be Neal’s fellow Springdale Republican, former Sen. Jon Woods. Woods has pleaded not guilty and is scheduled for trial in April — along with the president of Ecclesia College in Springdale, one of the two nonprofits that allegedly paid kickbacks to him and Neal, and a go-between.
State Sen. Jake Files, R-Fort Smith, pleaded guilty in January to wire fraud and money laundering in connection with GIF money he routed to himself.
Meanwhile, in the Western District of Missouri, federal prosecutors have been going after executives of a nonprofit provider of mental health services, including a former Arkansas state representative and an Arkansas lobbyist. The company, based in Springfield, Missouri, is now known as Preferred Family Healthcare Inc., but it was formerly known as Alternative Opportunities Inc. and did business in Arkansas as Dayspring.
Former Rep. Eddie Cooper, D-Melbourne, pleaded guilty last month to being part of a seven-year conspiracy to embezzle more than $4 million from AO/PFH. Cooper personally received more than $450,000 and, groan, it started while he was still in the state Legislature, taking official actions designed specifically for the benefit of the employer he was simultaneously ripping off.
AO/PFH’s revenue was almost exclusively from Medicaid, so the money being embezzled was taxpayer money.
Law enforcement officers don’t believe in coincidences, and it is no coincidence that AO/PFH is the second nonprofit that allegedly paid kickbacks to Neal and Woods (although it has not been named in the Arkansas cases). Its lobbyist, Rusty Cranford, has also been indicted in Missouri; he was “Person #4” in Cooper’s plea agreement and is “Person A” in Micah Neal’s plea agreement and the indictment against Woods.
So AO/PFH is the victim of the embezzlement scheme in Missouri, where other executives are also implicated, and the payer of bribes in Arkansas, where rumors persist that more legislators will be caught up in the GIF scandal. I hope that’s wrong, but I’m preparing for a depressing wave of nauseous cynicism.
Michael Flynn, Paul Manafort, Rick Gates, George Papadopoulos and Carter Page all joined Donald Trump’s campaign in February and March 2016. All but Papadopoulos were already involved in financial transactions with Russians or pro-Russia Ukrainians, and Papadopoulos was promptly befriended by a Maltese professor who happened to have political connections in Russia he was eager to share with young George.
Flynn, Gates and Papadopoulos have all pleaded guilty to lying to federal investigators — as has a lawyer who worked with Gates and Manafort, Alex van der Zwaan, the son-in-law of a Russian oligarch. It seems volunteering to become convicted felons was their best option.
Very coincidental indeed.
Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.