Senators propose new ethics rules but won't call for resignation of colleague | Arkansas Blog

Thursday, June 14, 2018

Senators propose new ethics rules but won't call for resignation of colleague

Posted By on Thu, Jun 14, 2018 at 6:38 PM

click to enlarge SEN. JIM HENDREN: New ethics rules proposed by the incoming Senate president pro tem would create committee to handle complaints of conflicts of interest.
  • SEN. JIM HENDREN: New ethics rules proposed by the incoming Senate president pro tem would create committee to handle complaints of conflicts of interest.

A bipartisan group of Arkansas senators introduced a draft of new ethics rules Thursday morning in response to a widening federal bribery scandal that has ensnared several former legislators of both parties and appears to implicate at least one sitting senator, Republican Jeremy Hutchinson of Little Rock.

Here's a PDF of the draft rules, which will be considered at a Senate business meeting scheduled for 1 p.m. on Tuesday. If approved, the rules would require broader disclosure of financial interests, prohibit certain business conduct and create a Select Committee on Senate Ethics to hear allegations brought against senators by their colleagues (though not brought by others outside the body, crucially).

Senate Majority Leader Jim Hendren (R-Gravette), Minority Leader Keith Ingram (D-West Memphis) and outgoing Senate President Pro Tem Jonathan Dismang (R-Beebe) were among those who presented the rules. (Hendren is also the incoming president pro tem.)

The legislature can't pass new laws while not in session and the 2019 regular session won't begin until January. However, the Senate (and the House) can pass new rules that govern the body's internal operations at any time.

The proposed rules come in the wake of the guilty plea entered last week by former lobbyist and health care executive Rusty Cranford, who admitted to federal investigators that he provided hundreds of thousands of dollars in bribes and kickbacks to multiple legislators over the course of several years. Cranford sits at the center of several corruption cases the FBI evidently has been investigating for years.

A brief synopsis: In May, Hank Wilkins, a former Democratic senator and representative from Pine Bluff pleaded guilty to "conspiring to accept over $80,000 in bribes in exchange for influencing Arkansas state legislation and transactions." Cranford apparently steered the money to Wilkins through an account at a church where Wilkins served as pastor, allegedly in exchange for Wilkins' assistance passing legislation favorable to Cranford's clients and his employer, Preferred Family Healthcare. Days later, former state Sen. Jon Woods, a Springdale Republican, was found guilty on 15 of 17 counts in a federal corruption trial; former Rep. Micah Neal (R-Springdale) also pleaded guilty in that case. Woods and Neal received kickbacks in exchange for guiding state grants to Ecclesia College, a small Christian school in Springdale, and to a subsidiary of Preferred Family Healthcare. And when Cranford himself pleaded guilty, the federal information stated the lobbyist had paid $500,000 in "cash, checks, wire transfers, attorney fees and retainers" to an unnamed "Arkansas Senator A" who fits the description of Sen. Hutchinson. (Hutchinson is the nephew of Governor Asa Hutchinson and the cousin of Sen. Hendren.)

At today's announcement, Hendren outlined proposed changes to the Senate's Rule 24, which governs the chamber's code of ethics. That rule already contains a means by which the Senate can discipline its members for ethical violations, but Hendren and the other senators propose toughening those standards.

The definition of "financial interest" would be expanded to include employees of consultants of businesses or other entities. "In the past, it’s just referred to if you own part of a business or part of an institution that may have business before the state," Hendren said. "We’ve made that much broader to include anybody who’s an employee or a consultant, and we’ve also defined what a consultant is: anyone who provides expert or professional advice."

The current rules already contain a number of prohibitions; the proposed draft strengthens the language on some and adds some new ones. A senator explicitly could not "accept employment or compensation that could be reasonably expected to impair his or her independence of judgment," Hendren said. A senator would be prevented from acquiring a financial interest based on his or her knowledge as a legislator that "something is going to change in an industry," Hendren said, which he likened to insider trading rules. A senator could not pay below or charge above fair market value for goods or services with any lobbyist or entity that does business with the state. ("So, no sweetheart deals," Hendren said.) The draft rules would prevent any family member of a senator from working for the Senate. (The current draft extends this to family of Senate staff, but Hendren said that phrase will be struck.)

It's not practical to prevent legislators from participating in any legislation that could benefit them financially in any way, Hendren said. "You’ve got farmers and bankers and lawyers and accountants who have other jobs but also serve in the legislature. … [If we're discussing] banking issues, I like to hear from a banker that I trust that is in the legislature. I don’t want to necessarily ban him from participating in the discussion, but it’s fair that we all know that it affects his industry," he said. Therefore, the draft rules require greater disclosure of certain interests, rather than a prohibition.

Rather than disclosing financial interests only of $12,500 and above, "you basically have to report everything," Hendren said. Senators would have to report their financial interests in brackets: $0 to $1,000, $1,000 to $12,500, $12,500 to $50,000, or above $50,000. "You’ll have to have much more disclosure on the details of where your income comes from, and that includes you and your spouse," he said. Senators would have to "list any real estate that is rented or leased to lobbyist or entities that do business with the state." Attorneys and consultants who do referrals after they're elected must report the amount of compensation they receive for any referrals. If a senator's financial situation changes by more than $10,000 over the course of a year, that must be reported, too.

Under the current rules, a senator may accuse another senator of violating the code of ethics, but that complaint must be made before the full Senate, in public. The draft proposed Thursday would create a new five-member committee, the Select Committee on Senate Ethics, to handle such complaints. The members are to be selected by the president pro tem and give a 3-2 majority to the majority party. Hendren announced the members of the proposed committee today: Sens. Missy Irvin (R-Mountain Home), Dave Wallace (R-Leachville), Jason Rapert (R-Conway), Will Bond (D-Little Rock) and Bruce Maloch (D-Magnolia). The accused senator would be notified at the same time the ethics committee would be notified, after which the committee would have 10 days to begin a hearing and an investigation. The committee's meetings would generally be public but it could also meet in executive session, Hendren said. After the hearing concludes, the committee would issue written findings and recommendations to the president pro tem, after which the Senate could issue penalties ranging from a letter of caution to loss of leadership or committee assignments all the way to expulsion from the body.

Finally, the draft rules would make a senator under criminal indictment ineligible to retain any leadership position or chair any committee. A senator who enters a guilty plea would be forced to vacate his or her office. (The rules already state that being found guilty would result in removal.)

As more than one journalist pointed out at today's announcement, the enforcement mechanism to take action against a corrupt senator would be his or her own colleagues. The chamber has 35 members; it's a small club. Hendren said he felt confident that members would "step up and do the right thing" despite the difficulty of confronting a fellow member. "The overwhelming majority of the Senate, when they see one of their colleagues in violation of what we have said is prohibited conduct, will make that accusation," he said. "If somebody is violating the rules that we have adopted, they will be held accountable."

Yet when asked whether any current senator appears to be in violation of these draft rules, Hendren and the others hedged.

"This isn’t a response to any of the incidents that have happened. It’s a response to all of them that have happened, not just in the last two years or three years, but in the last 20 years or 30 years. I was in the House back in the late 90s. The exact same thing was going on — some of it even worse," he said. "This is not a response to this case or that case, or this person or that person. This is a response to, time and time again we continue to have some people make poor decisions, and it’s clear we need to establish better guardrails for folks."

Jacob Kauffman from KUAR asked Hendren specifically why he wouldn't say Sen. Hutchinson' actions would have run afoul of the guardrails that the rules proposed.

"These rules have not even been adopted yet; they're a draft," Hendren said. "I don't know all the facts, and I don't think anybody does. ... You're asking us to bypass the entire process that we've laid out here."

Later, he added, "I believe in the rule of law and innocent until proven guilty and due process, whether it be for Judge [Wendell] Griffen or whether it be for Sen. Hutchinson or anybody else. ... When someone is convicted or pleads guilty and it’s clear they’ve violated the law … believe me, they will be asked to step down."

Hendren also pointed out today that affecting the behavior of those outside the legislature — lobbyists, for example — will require a change in law, not rules.

Sen. Bond, who was one of those present today, offered a few additional suggestions of his own, though he made it clear there wasn't consensus around such ideas. "We can add sunshine to the process [by] announcing the conflicts … maybe putting them on a website so the public has easy access," he said.

"Then we have to look at incentives ... and that’s legislation, largely. Maybe if you’re convicted of certain offenses, you lose all your state retirement benefits — that’s an idea that’s been discussed. If your business is engaged in bribery or some form of improper public influence, maybe you lose the ability for a certain number of years to accept a state contract or get any Medicaid money."

Bond also said the legislature should also discuss changing disclosure laws on election spending — something it's refused to do for several years, despite attempts by Rep. Clarke Tucker (D-Little Rock) and others — and the Senate should finally begin live-streaming itself when it's in session, something the House began doing long ago.

Bond suggested that certain individuals besides senators should be allowed to make an allegation of unethical conduct. "Maybe that can include others, including House members or staff or whoever," he said.

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