Rep. Gates says plea deal isn’t conviction
Rep. Mickey Gates, R-District 22, said Friday that the no contest plea he entered earlier in the week to a felony tax offense is not a guilty conviction.
The three-term lawmaker representing north Garland and west Saline counties in the state House said the deferred adjudication plea he entered Monday was taken under advisement by the court. The first time offenders statute the plea was entered under allows Gates to avoid a finding of guilt if he complies with the terms of the six year probation Benton County Circuit Judge Brad Karren sentenced him to Monday in Garland County circuit court.
Gates was charged last year with six counts of failing to pay state income taxes or file tax returns. Charging documents said he owed $259,841 in taxes, penalties and interest as of June 2018, and that no tax returns from him were found in the state revenue agency’s computer system.
Gates said in 2016 that the state had reviewed 10 years of his tax returns during an audit that was ongoing at the time, including profits and losses of his S corporation promotional products business. A S corporation avoids corporate income taxes by passing profits and losses directly to its shareholders, which, in Gates’ business, are him and his wife.
Five of the counts filed against him last year were withdrawn as part of the plea agreement, which requires him to pay $74,789 in taxes, penalties and interest for the 2012, 2013 and 2014 tax years and file tax returns for the 2015, 2016 and 2017 tax years.
A six year statute of limitations prevented the state from prosecuting Gates for tax offenses it alleged prior to 2012.
“While I fervently wanted to have my day in court, my friends and attorneys convinced me to swallow my pride and agree to a deal that gets done what I have always wanted done, getting my tax bill with the state figured out and paid,” Gates said Friday in a news release.”It’s important to note that a plea under Act 346 is not deemed to be a conviction. The state Supreme Court has recognized that as the law.”
Gates said he’s still a bona fide House member despite Speaker Matthew Shepherd, R-District 6, of El Dorado, advising him to leave office earlier in the week. Gov. Asa Hutchinson, Lt. Gov. Tim Griffin and Attorney General Leslie Rutledge, all Republicans, called for him to resign last year.
The Republican Party of Arkansas had not responded to repeated requests for comment about Gates’ no contest plea at presstime. Gates said it’s up to his constituents to decide if he should remain in office, not legislative colleagues or the state’s executive branch. His seat is up for reelection next year.
“I respectfully disagree with the comments made by Gov. Hutchinson and Speaker Shepherd,” he said in the release. “I do not believe this situation warrants resignation. Rather, the people of my district should be the ones to decide who represents them.”
Gates filed six bills in the legislative session that ended earlier this year, according to the General Assembly website. Two became law. One authorized DFA to issue license plates recognizing spouses of deceased recipients of military decorations and one dealt with petitions for municipal improvement districts.
“I still go to committee meetings, and I also vote,” Gates said in a text message. “I am a full member of the Arkansas House of Representatives with all rights and privileges. My district is represented by a very active representative.”
The state Constitution prohibits persons convicted of an “infamous crime” from serving in the Legislature, but Shepherd said Thursday that Gates’ plea deal is not considered a conviction.
Jeff Rosenzweig, Gates’ attorney, said Monday that state and federal revenue agencies encourage taxpayer compliance by referring public officials with tax issues for prosecution.
“Those doing their best to pay their obligations shouldn’t be seen as an easy revenue source just because they do not have accountants and attorneys on staff or readily available,” Gates said in the release.
Special Prosecutor Jack McQuary, whom the state assigned to Gates’ case, said DFA tried to work with Gates prior to the Arkansas State Police opening an investigation, but Gates continued to make excuses for not paying income taxes or filing tax returns.
“This signals to everyone that you have to file or pay,” McQuary said Monday. “It doesn’t matter if you’re getting money back, you still have to file.”
Gates has said his tax issues partly stem from former employees who misappropriated proprietary information to secretly solicit customers for a business competitor. He won a judgment against them in federal court, according to court records.
“At a later date I hope to share more details of the various misunderstandings on this case and the failings of all sides, most assuredly including myself,” Gates said in the release. “I hope this will benefit not only DFA but also the citizens who deserve fair treatment from powerful state agencies.”