Saturday, July 16, 2016

The trial of Ted Suhl, day 3: "I had friends that were fishes"

Posted By on Sat, Jul 16, 2016 at 5:23 AM

click to enlarge FRIENDS WITH BENEFITS: Phillip Carter (left) says he's received money from Ted Suhl since 2002 in exchange for services, some of which were illegal. Carter is cooperating with prosecutors and is a key government witness in its case against Suhl. - NELSON CHENAULT (PHOTO OF SUHL)
  • NELSON CHENAULT (photo of Suhl)
  • FRIENDS WITH BENEFITS: Phillip Carter (left) says he's received money from Ted Suhl since 2002 in exchange for services, some of which were illegal. Carter is cooperating with prosecutors and is a key government witness in its case against Suhl.

Ted Suhl has been in the business of providing mental and behavioral health services to young people in Northeast Arkansas for decades. Thousands of teenagers have either passed through his inpatient facility formerly known as the Lord's Ranch (now renamed Trinity Behavioral Health) or received outpatient services via Arkansas Counseling Associates. Now, Suhl stands accused of federal bribery, with the U.S. Department of Justice alleging he funneled thousands of dollars to Steven Jones, a top official at the Arkansas Department of Human Services, in return for gaining preferential treatment for his companies. That helped keep clients — and the Medicaid reimbursements they represented — flowing to Suhl's businesses, according to federal prosecutors. Our account of day 1 of the trial is here, and day 2 is here. Read on for day 3.

At first glance, Phillip Carter and Ted Suhl would seem to come from different worlds. Suhl is a successful businessman who owns multiple mental and behavioral health companies that in recent years have received over $20 million annually in Medicaid funds from the state of Arkansas. Carter, a former West Memphis juvenile probation officer, has held down multiple side jobs — as a grocery store security guard, as a driver, doing lawn care — to keep his constant financial troubles at bay. Yet Carter and Suhl have been friends for over a decade, and they have their similarities. Both were in the business of working with troubled youth. For both men, faith plays a central role in their lives: Carter was an ordained minister at the 15th Street Church of God in Christ (COGIC) in West Memphis and Suhl's inpatient treatment facility in Warm Springs, which was formerly called the Lord's Ranch, once described its treatment approach as "Bible-based." And both Suhl and Carter had deep connections in East Arkansas politics.

Carter is a key witness for the prosecution in the United States' case against Suhl. Now serving a sentence in federal prison for his role as a middleman in a scheme in which Suhl allegedly paid DHS Deputy Director Steven Jones, Carter is hoping for leniency in return for his cooperation. Most of Friday's court proceedings were devoted to Carter's testimony, in which he explicated his role in (1) brokering a series of meetings between Suhl and Jones and (2) allegedly laundering cash destined for Jones by way of the 15th St. COGIC. In return, Jones allegedly helped shape DHS policies to be more beneficial to Suhl in variety of ways and passed him "inside information" — always via Carter.

There's no doubt Suhl and Carter knew each other well, as shown by numerous wiretapped phone conversations played for the jury, and there's no doubt Suhl gave money to Carter in a variety of ways. Whether that money then traveled to Jones (and if so, how frequently) depends in part on Carter's testimony. Suhl's defense attorneys argue Carter has simply told FBI investigators and prosecutors anything they want to hear.

This isn't a novel accusation to level at a co-conspirator who's struck a plea deal, of course — but in the person of Phillip Carter, the defense has especially fertile ground in which to plant seeds of doubt for the jury as to the prosecution's overall narrative.

For one thing, Carter has been convicted of a charge in a second felony corruption case separate from the Suhl matter but occurring during roughly the same time frame: the Hudson Hallum vote-buying scandal. Hallum, a Democratic state legislator from West Memphis, benefited from a scheme to buy bundled absentee votes with both cash and goods (including half pints of vodka), and in 2012 pleaded guilty to felony conspiracy to commit election fraud. Suhl's defense team wants jurors to know all about Carter's role in the Hallum scheme — as well as Carter's alleged solicitation of prostitution. Before the trial began, prosecutors convinced U.S. Judge Billy Roy Wilson to preclude mention of Carter's alleged solicitations, as well as "details" of his voter fraud conviction.

The fact of the conviction itself, however, is fair game, and the defense has brought it up as frequently as it can muster. On cross-examination Friday, defense attorney Alex Romain played a recording of a wiretapped conversation in which Carter talks with his supervisor, Chip Barnes, about whether it would be illegal to "raffle a car" as an incentive for people to go vote in an upcoming election. (Hudson Hallum's father owns a West Memphis car dealership.) Barnes says he thinks it would be, as long as voters aren't told to vote a particular way in order to be eligible to enter the raffle. Barnes adds knowingly, "...but the car is going to be given away by Hallum Motors ... people will know who to show their appreciation to." Both men laugh and laugh. (Barnes eventually became an informant for the FBI.) 

In such conversations, Carter appears to be what Romain accused him of being in his opening statement for the defense on Wednesday: a hustler through and through, who'll do or say anything if it benefits himself. Referencing Carter's statement to investigators when first confronted about his role in the alleged Suhl conspiracy in 2011, Romain asked Carter if he "told the FBI — and I'm quoting you — 'F[uck] Ted Suhl'?" (That is, Carter was quite willing to throw his old friend under the bus if it would get him out of hot water.) “When it came to that, yes,” Carter replied, quietly.

In the same conversation with the FBI, Romain said, Carter "told the government [he] would get the ‘big fish' and asked them how they wanted those fish prepared — blackened, fried or grilled."

But none of that indicates Carter's statements regarding Suhl are necessarily false, and if his testimony was flawed from the prosecution's perspective, it also showed how far back the relationship between the two men did go. As a PO, Carter referred youth to Suhl's companies. A Suhl entity employed Carter's wife, Leatrice, for what Carter maintains was a no-show job. Carter said he helped broker a $40,000 donation from Suhl to the 15th St. COGIC to benefit the campaign of its pastor, John Bennett, in his bid to become bishop of the Church of God in Christ's First Jurisdiction in Arkansas (a politically powerful position in the eastern part of the state, Carter said).

In return, Carter told U.S. prosecutor Lauren Bell, "whatever Ted Suhl wanted, that's what I was going to do. Bar none." Most pertinently, Carter said he immediately contacted Suhl when he found out in 2007 that another friend, Steven Jones, had been appointed to a job atop the bureaucracy of DHS, which oversees providers such as Suhl's companies. Jones was a former legislator well known to Suhl; the businessman had in fact paid Jones a retainer of $1,000 a month for a period beginning in 2004, when Jones was a member of the state legislature. (More on this should emerge when Jones takes the stand.) 

Suhl's response, according to Carter, was, "That's huge." He sounded excited at the news, Carter added. "I advised the defendant that Steve was hungry ... [and] wanted to get paid," Carter said. Carter told Jones that Ted Suhl wanted to talk; Jones allegedly told Carter that he had a minimum fee of $2,000 for such matters. Suhl allegedly paid that fee through a donation to the 15th St. Church of God in Christ. Carter claims Suhl said, "y'all know what to do with it." (That is: Provide cash to Jones, by Carter's account.)
Carter testified that the three men then set up a meeting at the Lord's Ranch, where Suhl allegedly asked Jones about his relationship with then-Gov. Mike Beebe, a Democrat. He wanted to know "How close they were, what sort of influence he [Jones] had with him [Beebe]," Carter said. Specifically, Suhl allegedly wanted help in getting reappointed to a state body with regulatory power over providers such as himself: the Child Welfare Review Board. Under former Republican Gov. Mike Huckabee, Suhl had been a member of that board, but Beebe had declined to reappoint him. Jones was circumspect, in Carter's telling, and made no promises.

From there, a pattern developed of regular meetings between the three men; Carter said they met some 20 times between 2007 and 2011, when the FBI stepped in. At first, they met at the Cracker Barrel in West Memphis, but Carter said Suhl was uncomfortable meeting there because “too many people know us [Jones and Carter] in Crittenden County.” Likewise, they couldn't meet in Little Rock, because it was "right under the governor's nose ... Steve is very well known ... it wouldn't have been wise." So, the bulk of their meetings took place in Memphis, at the Texas de Brazil, a steakhouse. 

Carter said the men “purposely avoided [using] names on the telephone,” and that it was Suhl who told him to "be careful on the telephone" because of the possibility of a phone tap. Indeed, in the many conversations recorded between Suhl and Carter in the FBI wiretap, Suhl is extremely careful to never mention Jones by name, typically referring to "your buddy," even when the context makes it clear Jones is being referenced.  Likewise, Jones is very cautious in his conversations with Carter and seems determined to keep their talks brief. (However, Carter is not as careful and occasionally lets names emerge into conversations — to the delight of the listening FBI agents at the time, no doubt.) Carter would use coded language to tell Jones he'd have a "package" — cash — ready for him. 

“Why did you need to conceal that?” prosecutor Bell asked Carter. “Well, it was wrong,” he replied.

As mentioned on day 1 of the trial, there is one gap in the hard evidence supporting the government's narrative about how the bribery scheme allegedly worked. Though bank and phone records show a clear pattern of activity (a flurry of calls, a check from Suhl to Carter's church, a meal at the Texas de Brazil), there's no paper record of the final step in the process, in which Carter allegedly delivered cash payments to Jones. The FBI wiretap captured one final iteration of the pattern, but Carter never gave Jones the money. Instead, he and Pastor John Bennett kept if for themselves. Carter was then approached by the FBI to hand over the cash to Jones — using bills the government provided. (Bennett died in 2014 without being interviewed by the FBI.)

On Friday, Carter told prosecutor Bell that there were times when he and Bennett would keep the money Suhl gave them, and times when they'd pass on the money to Jones. Suhl always intended these checks for Jones, Carter maintained, but since he avoided talking to Jones directly, it was easy for Carter and his pastor to take a cut when they felt inclined to do so. Regarding that last payment, he claims that he and Bennett were in personal financial binds and needed money. But Carter also said they had another motive: They weren't going to give the $2,000 payment to Jones until he "produced" — that is, followed through in some way with what Suhl wanted him to do. In this instance, that would be some action related to a DHS policy that resulted in referrals — that is, young Medicaid clients and the money they represent — going to a competitor of Suhl's, Mid-South. (Whether those two explanations can coherently coexist is another question for the jury.)

Bell also walked Carter through portions of several conversations at the same time that relate to another, lesser favor Suhl asked of Jones, via Carter: Providing monitoring reports about his companies collected by DHS. The jury heard the following on Friday. In a July 2011 call, Suhl tells Carter, “You might want to ask him and see if he’ll give ‘em to you ... he might have some inside information related to what Janie’s saying.” Carter told the prosecutor that "Janie" means Janie Huddleston, who was the other deputy director at DHS at the time other than Steven Jones. In the DHS bureaucracy, there are two deputy directors, each of which is responsible for five of the ten divisions that comprise the agency. According to Carter, Suhl said that Janie Huddleston didn’t like him. Later in the call, Suhl makes reference to “Janie” being “out of control," though it's not clear what he means. “I’d like to see them” Suhl tells Carter, regarding the monitoring reports.

In a later call, Carter asks Suhl for a fax number. He tells Suhl he's about to fax him the “inside information.” The documents don't appear to be extremely important to Suhl, though: Still later, when Carter asks if they were received, and if they were helpful, Suhl says they were just "more of the same" information.

At such moments in the recordings, it's tempting to speculate on the nature of the decade-long personal relationship between Suhl and Carter. The connection was based on financial benefit, perhaps, but Carter said Friday that he also believes Suhl's money and favors were genuinely intended to help him — that Suhl wanted to help him. On Thursday, when asked about how he first became involved with Suhl, Carter focused on their business dealings. But he added in passing, with a slight distance to his voice, "I loved the name. The Lord's Ranch." Asked what the Lord's Ranch was, Carter's first description wasn't "an inpatient facility," but this: "19 cottage-style, nice, immaculate homes on 1,200 acres of land. ... Horses. Catfish ponds."

On redirect examination of Carter, Lauren Bell, the prosecutor referred back to the statement the defense attorney had presented in which Carter had offered to serve up "big fish" to the government after the FBI confronted him. "Even if Ted Suhl was a ‘big fish,’ was he your friend?" Bell asked.

“I had friends that were fishes,” Carter told her.

Carter appears to be a problematic friend to have had. He's why the case against Ted Suhl exists: The FBI began looking into Carter due to a citizen complaint that he was "double dipping," which led them to Jones and Suhl. It also appears that the Hudson Hallum investigation grew out of that initial investigation into Carter. He's now, in a sense, befriended the prosecution; it's the hope of the defense attorneys that Carter's bad luck will rub off on his new allies as well.

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