Unsealed court documents include kickback accusation against former state Rep. Tim Summers; Summers says "Jon Woods is a proven liar" | Arkansas Blog

Monday, September 17, 2018

Unsealed court documents include kickback accusation against former state Rep. Tim Summers; Summers says "Jon Woods is a proven liar"

Posted By on Mon, Sep 17, 2018 at 9:33 PM

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The more than 500 pages of court filings recently unsealed by U.S. District Judge Timothy Brooks in the federal corruption case against former state Sen. Jon Woods include notes from a 2017 meeting between former Rep. Micah Neal and federal investigators. According to these notes, Neal described what appears to be an accusation by Woods that former state Rep. Tim Summers, then a lobbyist, took kickbacks in exchange for helping to get GIF money for an affiliate of Preferred Family Healthcare where Summers worked on staff.

Reached for comment today, Summers, a Bentonville Republican who served in the legislature from 2009 through 2013, said that he had done nothing of the kind. "I'm disappointed that Woods would say something like that, but it's a damn lie," Summers said. Summers has not been charged with a crime. He said that he voluntarily spoke with federal investigators in late 2016, and they explicitly told him that he was not the target of an investigation.

A "Memorandum of Conversation" was created by federal investigators on March 9, 2017, describing a February 24, 2017 meeting with Neal, who had pleaded guilty in January and was cooperating with the government. The document, part of the materials unsealed by Brooks late last month, was included as an exhibit in a motion by Woods' co-defendant, Randell Shelton, to dismiss the case due to alleged misconduct by the government (Woods and Shelton were both eventually found guilty at trial on multiple federal corruption charges). 

According to the memorandum, Neal provided the following information:
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Summers worked in leadership roles at Decision Point, which offers substance abuse treatment in Northwest Arkansas, from 2005 until he retired in May of this year. Decision Point was acquired by Alternative Opportunities — the nonprofit healthcare conglomerate that eventually became known as Preferred Family Healthcare, and has been enmeshed in multiple federal corruption cases — in 2011. After the acquisition, Summers continued as director of development for Decision Point under the umbrella of AO/PFH.

Decision Point and other affiliates of AO/PFH were major recipients of public money from the General Improvement Fund (GIF) — the now-defunct system that allowed individual legislators to allot surplus money from the state's general revenue to pet projects of their choosing. (According to an analysis by the Arkansas Democrat-Gazette, subsidiaries of AO/PFH received more in GIF money between 2013 and 2017 than any other entity in the state.)

Summers became a registered lobbyist in 2013, after he left the legislature. But he said that he never lobbied for Decision Point or AO/PFH, as claimed in Neal's recounting of Woods' comments (according to filings with the Secretary of State, he was not registered to do so).

In his role as director of development at Decision Point, however, Summers did say that he communicated with legislators, particularly from his area, and encouraged them to back GIF money directed to the nonprofit. "We got some $60,000 or $80,000 one year from several different legislators, but that was all legitimate and reported," Summers said. "That money went to Decision Point and in no way did I benefit from that at all."

He vehemently denied ever receiving any sort of cut from GIF money that went to Decision Point. "That wouldn't be proper," he said. "I don't like the fact that Woods or Neal said it, but both of those guys are proven felons and liars, so I think my reputation would stand on its own."

Among the GIF grants received by Decision Point was a $109,000 grant in 2013, backed by eight Northwest Arkansas legislators; the application was prepared by Summers and the grant agreement was submitted by Rusty Cranford, the former Arkansas lobbyist who ran state operations for AO/PFH. In 2016, $19,500 of a requested $80,000 went to Decision Point for a grant to offer meals for needy families and gifts for their children at Thanksgiving and Christmas. The application was likewise prepared by Summers, with Cranford as the responsible agent (Summers told me that the meals program was a success and the funds were well spent to help those in need).

In 2013 and 2014, Summers was one of several former legislators registered as a lobbyist for Cranford's firm, the Cranford Coalition. According to court filings, Cranford was engaged in clandestine lobbying for AO/PFH and its Arkansas affiliates at that time, in order to dodge limitations and reporting requirements on lobbying required of AO/PFH as a tax-exempt nonprofit. Cranford used sham "consulting and training" agreements to hide his activities, according to prosecutors, and the Cranford Coalition did not report AO/PFH or its affiliates as clients on its lobbyist registration forms filed with the Secretary of State's office at the time.

In June of this year, Cranford pleaded guilty in the federal case against him, which involved bribery and kickback schemes connected to GIF money, as well as other public corruption. The federal information filed along with Cranford's plea does not accuse Summers of wrongdoing. It does mention in passing a "Person 8" who closely matches the description of Summers: A member of the Arkansas House of Representatives from 2009 through 2013 who has been an employee of AO/PFH since 2011, and prior to that was an employee of Decision Point; Person 8 is also described as a registered lobbyist with the Cranford Coalition in 2013 and 2014.

According to the federal information, Cranford sent an email in 2012 to another AO/PFH executive with a copy of a $2,000 check to Person 8's campaign for Senate (Summers unsuccessfully ran for state Senate in 2012). Federal prosecutors have described a scheme by which Cranford would use his lobbying firm to secretly funnel money from the nonprofit to campaign contributions; such contributions were prohibited because AO/PFH was a tax-exempt charitable organization. There is no evidence that candidates who received the money knew about the scheme, and Person 8 is not accused of wrongdoing in the federal information.

Summers told me that he has not reviewed that court filing to verify whether he is Person 8, but noted that the Cranford Coalition had indeed contributed $2,000 to his campaign, as had AO/PFH executives such as Tom Goss, Bontiea Goss and Eddie Cooper, all of which was reported in his campaign filings. "That's a matter of public record," he said.

Summers was one of at least 23 current or former legislators on the list of 160 potential witnesses in the Woods trial released by Judge Brooks before the trial commenced, but he was not called to testify.

Summers said that to his recollection, when federal investigators spoke to him in December of 2016, they didn't ask about wrongdoing by Cranford or other executives at AO/PFH. He said that their main focus was the legislative mechanics of GIF funding — how the process worked. He said that he chose not to have a lawyer present when speaking to investigators, because he had nothing to hide. 

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