House rejects cut to treasurer’s legal fees

The Arkansas House of Representatives on Thursday rejected Senate President Pro Tempore Jonathan Dismang’s proposal to cut the state treasurer’s funding for legal fees nearly in half.

Dismang proposed the measure as an amendment to Treasurer Dennis Milligan’s appropriation for fiscal 2019 — House Bill 1122. It would have cut the office’s spending authority for “professional fees” from $194,372 to $100,000.

It comes after years of rising legal expenses for the office after a disgruntled former employee filed several lawsuits against Milligan in state and federal courts.

The House soundly defeated the cut in a split voice vote Thursday after several lawmakers spoke in defense of Milligan.

Rep. John Payton, R-Wilburn, said the amendment sought “to poke a finger in the eye of a duly elected constitutional officer.” Rep. Charlene Fite, R-Van Buren, noted that Milligan’s office has successfully invested state money, passing those benefits on to taxpayers.

“I think they are proving themselves to be good stewards of our money, therefore, I find this measure to be punitive,” Fite said.

Dismang didn’t return a phone message requesting comment Thursday.

The Joint Budget Committee had approved the amendment after initially voting it down.

Through a spokesman, Milligan said he requested the same amount for professional fees for fiscal 2019 as his office was allotted in the current fiscal year. He said the request represents the best estimation of what the office expects to spend on ongoing litigation and any legal advice needed on investment-related matters.

He said any unspent professional fee funds would be returned to the state or redirected to other areas of the treasury budget.

“As a fiscal conservative, I have returned $1.96 million of my annual budgets back to the state of Arkansas since 2015 – unspent money that was appropriated to my office – and I have earned the state over $154 million in interest receipts during that same time,” Milligan said.

After being ousted, treasury aide David Singer filed a discrimination and defamation against Milligan in federal court. Milligan won that suit after a trial last year.

Singer also filed a lawsuit in Pulaski County Circuit Court, claiming Milligan exceeded his authority in committing to a $450,000 contract with a company for a statewide financial-literacy program for elementary school students. That case is scheduled for trial later this month.

Singer filed a third suit in state court, alleging Milligan fired him for complaining about how the office was spending tax dollars. That case is on hold while the Arkansas Supreme Court considers whether the treasurer is constitutionally protected from such lawsuits.

Milligan’s office hired outside counsel after Attorney General Leslie Rutledge declined to represent Milligan and his staff, citing a conflict of interest.

Milligan hired Little Rock law firm Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. Since 2015, the treasurer has paid the firm $374,469.64.