LAWYER HUTCHINSON: Oops. BRIAN CHILSON

Sen. Jeremy Hutchinson’s mishandling of a lawsuit, subject of an article in the Arkansas Democrat-Gazette today, is old news to readers of the Arkansas Blog.

The Batesville Guard broke this story more than a year ago, in February 2017, and we reported that here. What’s new is a curious belated lawsuit to recover money from Hutchinson.

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The original suit was against Health Resources of Arkansas by its former chief executive, David Coleman. He was awarded $358,000 in what he claimed were unpaid retirement benefits. The judge issued a summary judgment in the case because of Hutchinson’s failure to respond to pleadings. He didn’t talk to the Democrat-Gazette today, but he did talk to the Batesville Guard at the time. We wrote:

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A large part of the article concerns Hutchinson’s failure to respond to filings in the case, a factor in the judge’s decision for a summary judgment. Hutchinson told the Guard he’d failed to appear for a December hearing because of a communications breakdown. He said he was in legislative meetings and an assistant had told him a request for a continuance had been filed. The case had been continued once before.

“The court said they never received it,” Hutchinson told the paper. “She insists she sent it. It’s not a good situation.”

If the name Health Resources of Arkansas or Preferred Family Healthcare rings a bell, there’s a reason. The names have popped up periodically in coverage of the scandal over legislators’ direction of General Improvement Fund money to nonprofits such as the mental health care provider. 

No kidding.

The news today is that Preferred Family Healthcare has sued Hutchinson and his current law firm to recover the money it lost. Note that it says it learned of the judgment only when garnishments were filed — in February 2017.

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So, 16 months after the fact, PFH is suing Hutchinson, who was on a $108,000-a-year retainer at the time with the outfit. That retainer has been characterized in former PFH executive Rusty Cranford’s recent guilty plea as bribe money for Hutchinson’s considerable help in getting state tax money and favorable legislation for PFH, still making $43 million a year in Medicaid reimbursements from the state. Hutchinson, who has not been charged with a crime, says it was a legitimate legal fee.

Now, after a recent bribery plea, PFH is moving to recover the money. Why did it take so long? Has it not made a claim on the senator’s malpractice insurance before now? If not, why not?

It’s hard not to be suspicious that this is PFH trying to cover its own very large taxpayer-financed rear. Where was it in 2017 when this news was in the local paper and the Arkansas Times? Other media perhaps should be mulling their own failure to ask questions at the time, too.

NOW, the state of Arkansas insists, state officials are more closely checking reimbursements to PFH and making the occasional inspection. That is too little too late. An accounting of state spending in the scandal years is needed and an assessment is also needed of the bribe-influenced legislation that set up a highly advantageous reimbursement system for PFH’s work. Gov. Asa Hutchinson and the Department of Human Services are far too forgiving of the past criminal endeavors that enriched this company.

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And speaking of rear-covering, I note this D-G passage:

Preferred Family Healthcare has either dismissed or suspended at least four members of its top management team since November after being briefed on the investigation in October, the company said.

“Today’s Preferred Family Healthcare is a different organization than the one led by the executives who came from Alternative Opportunities before the merger of AO into PFH in 2015,” the company said Friday. “After the merger, as we became aware of significant wrongdoing by certain executives and consultants, we removed those who put personal gain over the PFH mission.”

Dismissed executives included the chief executive officer, Marilyn Nolan; the chief operating officer, Bontiea Goss; and the chief financial officer, Tom Goss. They are all of Springfield, Mo.

Some details omitted from the rear-covering recited by the D-G:

* One key executive was put on leave only this week, after Arkansas Times’ inquiries about the seeming similarities between an unnamed executive accused in Cranford’s guilty plea and that of a top executive recently described as leading the company out of its mess.

* Michael Schwend, the current CEO at Preferred Family Healthcare, has led the company for years. In 2016, when this particular Hutchinson mess occurred, PFH filed a tax form showing Schwend was making a combined $986,000 from PFH and related organizations.  MIght a million-dollar-a-year man bear some responsibility for oversight of hired hands such as Cranford and Hutchinson and admitted felon and ex-legislator Eddie Cooper, to name just a few bad actors at PFH? Hutchinson’s lawyer, Tim Dudley, took note for the D-G that the company had even acknowledged in its lawsuit that it raised Hutchinson’s retainer fee for his fine work. That meant more than $100,000 in 2016, even as the Batesville case was imploding for Hutchinson’s lack of response.

PS: A lawyer comments that PFH wins the judgment it seeks from Hutchinson only by proving he fell down on the job (that might not be so hard) and by also proving they would have won the suit otherwise (perhaps harder). The suit, however, does open some doors to evidence discovery by Hutchinson into PFH operations.