The enormous bribery scheme outlined yesterday in ex-lobbyist Rusty Cranford’s guilty plea goes far behind the main targeted legislators — former lawmakers Jon Woods and Henry Wilkins and current Sen. Jeremy Hutchinson. Others unnamed will be getting scrutiny, but a major question surrounds the nonprofit still receiving millions from Arkansas under a system corruptly influenced for its benefit.
Stipulated: Though Cranford says Senator A, acknowledged to be Hutchinson, received $500,000 in payments, he has not been charged. His attorney says he did no wrong. They will contend Hutchinson’s monthly retainer of $9,000 was just an honest legal fee.
Stipulated: Preferred Family Healthcare, the massive social service nonprofit for which Cranford once worked, has not been charged and its current officials have replaced others with whom Cranford worked in a scheme that included illegal campaign contributions, bribes, kickbacks to Cranford and others and lavish living for all in on the deal.
Preferred Family Healthcare issued this statement yesterday to the Arkansas Democrat-Gazette:
“Mr. Cranford’s guilty plea contains admissions and allegations which demonstrate clearly the extent to which Preferred Family Healthcare was victimized by the actions of former employees and representatives of PFH,” Reginald McElhannon, a spokesman for the nonprofit, said Thursday.
“Preferred Family Healthcare will continue its cooperation and assistance with investigative agencies and hopes to recover any misappropriated funds so those funds can be used for the benefit of our communities and beneficiaries,” the statement from McElhannon said.
Sorry. No sale. Preferred Family is no victim, it remains a beneficiary of huge contracts and a grading system manipulated to protect it. It should have been suspended from Arkansas Medicaid just as Ted Suhl’s behavioral health companies were suspended when they became involved in a federal bribery investigation.
If you have time, peruse the 43-page bill of particulars to which Cranford pleaded guilty. Among the details:
* Preferred Family Health and predecessor organizations took in from 2009-2016 $837 million in federal money for services in five states, including Arkansas, more than $300 million in Medicaid alone.
* Persons identified but unnamed in Cranford’s plea include these former Preferred Family officers — the founder and chief financial officer; the chief operating officer; the chief executive officer; and the chief clinical officer. They had varying degrees of authority over work by Cranford or distribution of money. These and others were also instrumental in separate private entities tied to kickbacks.
* The government says bribes were paid to legislators to get allocations of General Improvement Fund money for Preferred Family and related organizations.
* Not just Cranford, but certain former Preferred Health officials, are accused of embezzling the nonprofit’s money and also giving a high-paying job to a friend of Jon Woods.
* A top officer of the charity personally met with Hutchinson about “hiring” him “because of favorable legislative acts” he could perform.
* The charge indicates officers of Preferred Family were in on the bribes to Wilkins, funneled through his church. They were also kept informed of the bribing of Woods in return for money.
* The charity applied for hundreds of thousands in state money, knowing the way had been greased by bribery.
* The charity paid Cranford for facilitating the deals.
* Cranford schemed to protect a state rating system beneficial to Preferred Family.
* Preferred Family was paying a retainer to Hutchinson at the time he was helping Cranford pass legislation, backed by his uncle, Gov. Asa Hutchinson, to send $3 million in state money to another non-profit. (More on this to come.)
* The charge says the four former top officials of Preferred Family and former Rep. Eddie Cooper, who’d gone to work for the organization, embezzled money (again, remember, all this flowed from the goodness of
* A former Preferred Family leader got kickbacks from Cranford for money he’d been paid by Preferred Family.
* Preferred Family arranged to cover some of Cranford’s income taxes.
* In all, Preferred Family sent $3.5 million to Cranford’s lobbying company and other entities, at the direction of top officers.
* When the investigation became known, officers at Preferred Family tried to cobble up paperwork to cover their arrangements with Cranford.
* Cranford pay for fund-raising dinners for Arkansas legislators and a candidate for governor and Cranford kept Preferred Family officials aware of the campaign contribution checks written to those candidates.
A snippet of the charge refers to
There’s still more. But that gives you some idea. Preferred Family a victim?
Taxpayers and voters were victims. The organization now reaps a lucrative pile of tax money in a system set up to favor the organization. It claims to be a victim? It is a victim of itself in the form of its former leaders.
That Gov. Asa Hutchinson and his Department of Human Services have reacted to the scandal with silence or defense of continuing the arrangement with Preferred Family inevitably raises suspicion of complicity. That the governor’s nephew is in the middle of it, on a half-million worth of retainer fees, doesn’t help.
The same for the Ecclesia kickback scandal, where many Republican legislative friends of the governor shipped what we now know to be tainted money to a marginal college organized as a church. Has anybody in the Hutchinson administration called on Ecclesia to give the money back?
PS: David Ramsey reminds me of his reporting on when Jeremy Hutchinson introduced a Senate resolution praising some of the people implicated in the latest.