Corruption scandal ensnares 5 ex-lawmakers, so far

Arkansas’ largest political corruption scandal in almost two decades has led to convictions of five former Arkansas lawmakers so far — two senators and three House members.

The five used their elected positions and jobs in conspiracies to steal from government programs, federal court records show.

Prison terms loom. More charges may develop.

They and at least six co-conspirators carried out public-corruption schemes under the Capitol dome that stretched at least as far as 2010.

The schemes involved: A Capitol lobbyist’s bribery conspiracy to benefit executives of a Missouri mental-health treatment company and a Magnolia youth detention center, from at least 2010-14.

Two legislators’ state grants to a private Christian college in Springdale, about 2013-15.

A state senator’s 2016 grant to help build a Fort Smith ballpark complex.

In 2000, Sen. Nick Wilson, D-Pocahontas, pleaded guilty to one count of racketeering after a 1999 federal investigation targeted 10 people, including three other current or former state legislators. The crimes included theft and kickbacks from state programs.

The Arkansas Democrat-Gazette has created a timeline of events that led to today’s criminal charges, guilty pleas and convictions.

Federal authorities started a political corruption probe in Arkansas in the summer of 2014. It expanded into three investigations spanning Arkansas and Missouri.

Here’s how the public corruption plots unfolded, according to plea agreements, indictments, emails, texts and other federal court records: 2010

Oct. 20: Longtime Arkansas lobbyist Milton “Rusty” Cranford and Rep. Eddie Cooper, D-Melbourne, ask an executive with Missouri-based nonprofit Alternative Opportunities Inc. to reimburse $3,351 in campaign contributions — illegal spending for tax-exempt charities like AO. The executive asks instead for a Cranford lobbying firm invoice, typically paid as “training” or “consulting” services. Significantly, Cranford and Cooper also are employees of AO, which collected $179 million in state and federal money between 2011 and 2016 for providing mental health services in Arkansas, mostly to Medicaid patients. Oct. 24: Cranford emails unnamed legislator about a policy meeting that affects AO: “Rep. Cooper is on the committee and he is carrying my vote to follow your lead.”

Unknown date: AO begins $1.5 million in payments over five years for rental of executives’ properties, which is not related to AO’s nonprofit mission. AO also spends illegally on executives’ personal services, charter air flights for family and pets, sports tickets, political kickbacks and more.

2011

Feb. 27: Cranford asks about Arkansas senators’ plans for state general improvement fund (GIF) grant donations.

2012

July 27: After U.S. Congress members halt a labor investigation into AO, Pennsylvania-based lobbyist Donald Jones asks AO executives on this date and other occasions to contribute to their political campaigns.

2013 89th Arkansas General Assembly

Jan. 16: Cranford, Cooper and thenRep. Henry “Hank” Wilkins IV, D-Pine Bluff, plan new legislation, HB1328. Becomes law March 11 as Act 321. Law requires state Division of Youth Services to get legislative approval before adopting new contracts or rules for companies like South Arkansas Youth Services (SAYS), a Magnoliabased nonprofit that provides

detention and group home services for troubled Arkansas youths. SAYS was paid $75.6 million in federal and state funds between 2011 and 2015, mostly through Arkansas state contracts.

Feb. 15: Cranford and Sen. Jon Woods, R-Springdale, draft SB350, which becomes Act 791. Authorizes up to $2 million for a GIF grant for Drug Abuse Prevention and Treatment program for mental-health clients. AO deposits $1 million from that grant on Dec. 12, 2013. The same day, AO pays Cranford $187,175.

Feb. 24: Cranford sends SAYS executive director Jerry Walsh a twoyear contract for “consulting” services for the youth detention nonprofit, at $3,334 per month. Walsh signs on, though significant lobbying is illegal for tax-exempt nonprofits.

May, unknown date: Cranford suggests to Walsh that SAYS hire unnamed Arkansas senator and lawyer for help to preserve the nonprofit’s state contracts, and also hire Cranford’s son at $60,000 per year and pay higher lobbying fees to Cranford firm. Senator’s contract is $7,500 per month. New Cranford lobbying contract, $8,000 per month.

June, unknown date: Woods tells Rep. Micah Neal, R-Springdale, that Cranford will kick back 20 percent of state grants that legislators direct to a Cranford startup called AmeriWorks. In grant applications, it did business as Decision Point of Bentonville, a subsidiary of AO. Woods, Neal authorize a $400,000 grant to AmeriWorks/Decision Point.

July 31: Oren Paris, president of private Christian school Ecclesia College, approves hiring a Woods family friend at $43,000-per-year and $7,000 signing bonus.

Aug. 26: Paris agrees to pay a

consulting company set up by Randell Shelton, another Woods friend, for one year of services at $50,000. Court records describe the company as an entity created “to pass bribe payments” from Paris to Woods. Late September: AmeriWorks gets Woods/Neal grant checks totaling $400,000. Ecclesia College gets $200,000. Neal gets $20,000 kickback for AmeriWorks, $18,000 for Ecclesia; Woods gets “unknown” amount cash.

2014 Federal investigation starts

July 24: Federal authorities investigate tip that Woods directed suspicious state GIF grants to Ecclesia College. Aug. 13: After FBI contacts Cranford and asks questions, he returns $400,000 AmeriWorks grant.

Late November: Woods and Neal decide to redirect $200,000 of the returned AmeriWorks grant to Ecclesia College.

Dec. 18: Planning agency issues $200,000 check from original AmeriWorks grant to Ecclesia. Dec. 30: Ecclesia president extends Shelton company’s consulting contract, at $65,000.

2015 Grand jury subpoena appears

Feb. 11: Woods files “Work College Act,” SB323. Awards up to $2 million in state grants to qualifying work colleges. Ecclesia is only qualifier. Bill becomes law, Act 417, though later no state money is distributed.

Oct. 2: Ecclesia’s president Paris pays $10,000 more for Shelton consulting services.

Oct. 26: Grand jury subpoena goes to Northwest Arkansas planning agency that processed most Ecclesia College and AmeriWorks GIF grants.

2016

Mid-December: Planning district approves GIF grant by Sen. Jake Files, R-Fort Smith, for $46,000 to lay water and sewer lines at Fort Smith ballpark construction project. Files’ company also manages construction.

Dec. 30: At Files’ urging, a planning agency issues $26,945 check from the grant to a contractor Files chooses. Contractor takes money to Files. She tells FBI that Files uses some to pay employees and pockets the rest.

2017 Federal charges begin

Jan. 4: Neal pleads guilty in western Arkansas federal court district to one count of conspiracy to commit mail and wire fraud. Sentence is three years’ probation and one year house arrest, due to his cooperation with authorities.

Sept. 13: Woods charged with 17 counts connected with honest services fraud (depriving citizens of a public official’s honest services) and other crimes. Woods pleads innocent. Dec. 18: AO lobbyist Donald Andrew Jones of Philadelphia pleads guilty to one count of conspiracy in western Missouri federal court. AO paid him more than $973,800 between 2011 and 2016 for political lobbying services. He awaits sentencing.

2018 More charges, guilty pleas and a trial

Jan. 29: Now-former Sen. Files pleads guilty to three counts wire and bank fraud and money laundering in western Arkansas in connection with theft of almost $26,000 from state GIF grant and a fraudulent bank loan application. Now serving 18-month prison sentence. Feb. 12: Cranford lobbyist and former Rep. Cooper pleads guilty in western Missouri to one count of conspiracy to embezzle more than $4 million from AO. Awaits sentencing.

Feb. 21: Cranford, who once headed AO’s Arkansas operations, is indicted in western Missouri in $1 million bribery conspiracy. Later, prosecutors accuse Cranford of plot to murder co-conspirator and AO lobbyist Jones. Jailed, Cranford pleads innocent. April 30: Former Rep. Wilkins pleads guilty in Little Rock federal court to one count of conspiracy to commit offenses against the United States, including taking bribes totaling $83,000 in exchange for influencing Arkansas legislation. Awaits sentencing.

May 3: Federal jury finds former Sen. Woods guilty of 15 counts of fraud and conspiracy to commit fraud. Now serving 18-year-four-month prison sentence and must pay $1.6 million restitution, forfeit $1 million in assets. Consultant Shelton convicted in same trial on 12 counts, now serving six-year prison sentence. Shelton must pay more than $660,600.

June 7: Cranford pleads guilty in western Missouri to one count of bribery of a federal program. Admits AO, later Preferred Family Healthcare, paid him more than $3.5 million from 2010-17. Still jailed, awaits sentencing. July 19: Former SAYS youth detention center director Walsh pleads guilty in western Arkansas federal court to one count of diverting funds from agency without board approval. Awaits sentencing.

Aug. 30: Sen. Jeremy Hutchinson, R-Little Rock — whom court records mention, but do not charge as “Arkansas Senator A” — is charged in a separate case with 12 counts related to misspending campaign contributions for personal use and falsifying state campaign finance reports and tax filings. Pleads innocent. Resigns Senate seat. Awaits trial.

Sept. 11: AO former executive Keith Noble pleads guilty in western Missouri to one count of concealing knowledge of a felony. Admits receiving $4.3 million personally from embezzlement, theft and other crimes. Noble also admits knowing three other former executives embezzled from the nonprofit. His plea doesn’t name them, but job descriptions match former chief financial officer Tom Goss, his wife and former chief operating officer Bontiea Goss and former CEO Marilyn Nolan. The Gosses and Nolan have not been charged.