Chuck Haralson and Ken Smith were inducted into the Arkansas Tourism Hall of Fame during the 43rd annual Governor’s Conference on Tourism
On March 28, 2008, a 76-year-old woman named Martha Bull entered a Greenbrier nursing home for what she and her family believed would be a temporary rehab period following a mild stroke. Ten days later, she was dead.
Bull, a mother of seven who lived most of her life in a small house outside of Perryville, was not a politically powerful or well-connected person. But her death set in motion an unlikely chain of events that has led to the conviction of a circuit judge on federal bribery charges, an ongoing civil lawsuit against Arkansas's largest nursing home operator and an FBI investigation into corruption in the state judiciary and perhaps beyond.
In July 2013, two months after a Faulkner County jury awarded $5.2 million in damages to Bull's family, then-Circuit Judge Mike Maggio reduced the size of that verdict to just $1 million. A few days before that, the owner of the Greenbrier nursing home, Michael Morton, wrote a series of checks to a number of political action committees that backed Maggio's campaign for a higher office. In March of this year, Maggio was sentenced to 10 years in prison for accepting a bribe. He has appealed to the U.S. 8th Circuit Court of Appeals.
Morton, however, has never been charged with a crime for providing the contributions. To the contrary, he is mounting a counteroffensive at the ballot box. Arkansans will vote this November on a constitutional amendment that would sharply limit the ability of patients and their families to sue for damages in situations like those in the Bull case. The so-called tort reform measure is being bankrolled largely by nursing homes, including Morton's. In June alone, his companies directly contributed $135,000 to a committee formed to gather signatures for the proposal, and may have routed more through the Arkansas Health Care Association, the lobby group for the state's nursing homes. Filings at the Arkansas Ethics Commission show the "Health Care Access for Arkansans" committee spent just under $600,000 in May and June, almost all of which went to a Colorado-based company that hires professional canvassers to collect signatures from voters. Because the proposed amendment would also limit attorney fees, canvassers framed the proposal to Arkansans as a way to curb greedy lawyers.
The big spending has paid off so far: Last Friday, the Arkansas secretary of state's office announced the committee had collected 93,000 signatures, surpassing the 85,000 required to place the proposed amendment on the ballot. Nursing homes can be expected to spend much more money in the coming months on advertisements aimed at convincing voters to support the measure.
The legal and political fallout from the Maggio-Morton affair may be far from over. But with many voters unaware of the context behind the proposed constitutional amendment pushed by Morton, it's worth taking a look back at the scandal thus far.
(A timeline of events is at the end of this article.)
Mike Maggio had served as a circuit judge in Conway for 12 years when the Bull case went to trial in his court. Originally appointed by former Gov. Mike Huckabee in 2001, he won re-election to the seat twice. When a position on the state Court of Appeals opened up in 2013, Maggio began considering a run for higher judicial office. In May of that year, the judge met with two key players in Arkansas politics — veteran political consultant Clint Reed and former state Sen. Gilbert Baker (R-Conway) — to discuss what it would take to mount a successful Court of Appeals race.
Reed later told the Arkansas Ethics Commission that he was at the meeting to share his expertise about the amount of money such a race would require: about $100,000 to $150,000. The person responsible for actually securing the funds, though, was Baker.
Maggio and Baker were friends, and although they inhabited different branches of government, their political careers followed similar trajectories. Baker first entered the state legislature in 2001. He, too, had ambitions of higher office: In 2010, he sought the GOP nomination to run against Democratic U.S. Sen. Blanche Lincoln. (Then-U.S. Rep. John Boozman beat Baker in the Republican primary and went on to defeat Lincoln that fall.) Term limits prevented Baker from seeking re-election to the state Senate in 2012, but like many former lawmakers, he parlayed his political connections into a lucrative post-legislative career, including a lobbying position at the University of Central Arkansas in Conway that paid $132,000 annually. Baker also helped coordinate fundraising for a number of campaigns — around 28 or 30 individual candidates at the time, according to his later statement to the ethics commission — although he says he was not paid for that work.
Among the donors Baker solicited for funds was Michael Morton, a wealthy Fort Smith businessman who owns all or part of 27 nursing homes across the state. The Greenbrier Nursing and Rehabilitation Center, in which Martha Bull died five years earlier, is owned by Central Arkansas Nursing Centers, a Morton company. Morton, whom Baker knew from his time in the legislature, had a reputation for generous political giving. A January 2015 report by the Arkansas Democrat-Gazette showed Morton had given over $1.25 million to various state campaigns over the past 15 years — a huge sum in Arkansas, where individuals' campaign contributions are capped at $2,000 per candidate.
Morton later said Baker asked him to support Maggio's run for the appeals court "during a chance encounter" in May, when Morton and Baker ran into one another at Brave New Restaurant in Little Rock. Morton agreed to do so. In a recent legal filing, Morton's attorneys argue that "while the parties might have understood that 'support' for a candidate generally included financial support, there was no discussion of, much less agreement to, any specific campaign contribution" during their conversation at the restaurant.
That same month, in Maggio's courtroom in Conway, a jury was hearing the details of the death of Martha Bull. On April 6, 2008 (only a few days after she was admitted to the home), Bull began complaining of severe abdominal pain. The following day, her calls for help intensified and she began loudly crying out. A doctor was not called until 2:20 p.m. that afternoon. Upon reviewing her medical history — which included an abdominal abscess — the physician ordered her transferred to a hospital emergency room for treatment, but when the nursing director for that shift forwarded the message, her fax was sent to a machine recently installed in a closet. Bull was found dead at 10:20 p.m.; the fax was found the next day.
The trial lasted eight days. Finding the Greenbrier nursing home liable for negligence, medical malpractice and violation of a patient's rights, the jury dealt it a massive financial blow, awarding $5.2 million in damages to Bull's family for pain, suffering and mental anguish. On May 16, the night the Bull verdict was handed down, Morton called Baker to discuss the need to institute tort reform in Arkansas — that is, abridging the amount of damages that can be awarded in civil lawsuits. (The proposed constitutional amendment currently backed by Morton is an example of such a reform.) Morton later said that he and Baker did not discuss Judge Maggio during that conversation.
Maggio announced his candidacy for the Court of Appeals on June 27. On July 8, Baker received a FedEx package from Morton that contained multiple checks. Ten were campaign contributions, each in the amount of $3,000, made out to political action committees, including seven PACs created by Baker's attorney, Chris Stewart, in July. The last check was a charitable contribution of $100,000 to Baker's employer, UCA. (The university has since refunded the donation.) Morton later told the ethics commission in a sworn statement that he was simply contributing to PACs identified by Baker, a trusted ally, and that while he knew some of that money would flow to Maggio's campaign, the idea of buying a favorable ruling from the judge had "never even entered his mind." Morton was willing to support Maggio "because Judge Maggio had made good rulings ... and had followed Arkansas law to a 'T.'"
In any case, a favorable ruling is what Morton received. His attorneys had requested Maggio grant a new trial or a remittitur — a reduction of the damage award — in the wake of the Bull verdict. On July 11, Maggio entered an order denying a new trial but granting the remittitur. "[T]he Court does find that the jury award of $5.2 million is so great that it shocks the conscience of the Court. The Court also finds that the evidence, testimony, and argument by Plaintiff's counsel inflamed the jury's passion and prejudice resulting in an award that is punitive in nature, despite the Court's previous ruling that punitive damages would not be allowed in this case," the judge wrote, lowering the judgment to $1 million, an 81 percent decrease.
Candidates for judicial office cannot accept — or solicit — campaign contributions more than 180 days before the election, which was May 20, 2014, in Maggio's case. Thus, his campaign for Court of Appeals did not begin receiving contributions from the PACs established by Baker until December 2013 and January 2014, when it received $12,700. More may have been forthcoming in the following months, but then Maggio began attracting unwanted attention for other reasons.
In March 2014, Blue Hog Report, a liberal blog authored by Little Rock lawyer Matt Campbell, published screenshots of comments made by a user on a message board for Louisiana State University fans, TigerDroppings.com. Under the handle "geauxjudge," and for no evident purpose besides gossip, the user disclosed confidential details of an adoption proceeding by the actress Charlize Theron, which apparently occurred in Maggio's court, though handled by a different judge. "Geauxjudge" also made numerous comments disparaging women, many of them sexual in nature. "Women look at 2 bulges on a man, one in the front of the pants or second one in the back pocket," read one posting. "Whichever one is bigger they can do without the other."
The comments also contained quips about race, homosexuality and Arkansans' supposed tendency toward incest. Campbell quickly drew the conclusion that "geauxjudge" was Mike Maggio, based on various identifying details, including the fact that "geauxjudge" wrote proudly of the athletic accomplishments of Maggio's daughter. Meanwhile, the state ethics agency responsible for policing judges' behavior, the Judicial Discipline and Disability Commission, had already begun investigating Maggio about the TigerDroppings comments.
Maggio dropped his campaign for Court of Appeals when the news broke. But Campbell then turned his attention to the events surrounding the Bull case. He noted that seven PACs assisting Maggio's campaign each received $3,000 donations from Morton days before Maggio granted the remittitur. This led the attorney for the Bull plaintiffs, Thomas Buchanan, to file a complaint with the Arkansas Ethics Commission, which interviewed Maggio, Morton, Baker and others. That summer, after the judicial ethics probe concluded Maggio's TigerDroppings comments were impermissible, the Arkansas Supreme Court permanently removed him from the bench.
But it was up to the federal authorities to pursue the larger issue of the Morton donations. Since the state judiciary receives some federal funds, the U.S. Department of Justice initiated a criminal investigation of Maggio on corruption charges. In January 2015, Maggio entered a negotiated plea, meaning he agreed to fully cooperate with prosecutors in hopes of a lighter sentence.
The plea agreement signed by Maggio identifies Morton only as "Individual A ... a stockholder in numerous nursing homes" and Baker as "Individual B ... a lobbyist and political fundraiser." Baker, it states, directly asked Maggio to consider running for the Court of Appeals in early 2013. On May 16 of that year, the day of the verdict in the Bull case, it says, "Individual B sent Maggio a text message stating, 'I have a LR lunch today with the nursing home folks. The topic will be judicial races. You are at the top of the list.'" On June 29, two days after Maggio announced his candidacy for the race, "Individual B sent Maggio a text message stating in part, 'Well, your first 50k is on the way.'" It concludes that "Maggio granted the remittitur in part because Maggio wanted to retain [Morton's] financial support of his campaign for Court of Appeals." The offense to which Maggio pleaded guilty, federal funds bribery, carried a maximum penalty of 10 years in prison and a $250,000 fine.
A year passed with no further indictments. Then, in February of this year, as Maggio's sentencing date approached, he attempted to withdraw his guilty plea, arguing that he could not be charged under the federal bribery statute in question and that his previous lawyer had given him bad advice (he's since hired new counsel). Another reason for the about-face later emerged, in part: The U.S. attorney's office said Maggio had not fully cooperated with prosecutors and had made untruthful statements, so they had recommended a harsher sentence.
U.S. District Judge Brian Miller rejected Maggio's attempt to withdraw the plea, and on March 24 he sentenced Maggio to 10 years in prison — the maximum allowable under law, and a departure from guidelines. "I put drug dealers in prison for five, 10, 20 years for standing on a corner selling crack cocaine," Miller said at the time. "A dirty judge is far more harmful to society than a dope dealer." Corruption in the judicial system especially erodes public trust in government, he added, because "a judge is the system." Maggio is still attempting to withdraw his guilty plea in his appeal. He is free while the case goes through the courts.
A judge has been convicted of accepting a bribe — but no one has yet been charged with paying that bribe. Morton and Baker both contend their actions were innocent, if unfortunately timed. Baker has said he knew nothing of the Bull case at the time he sought the donations from Morton. He resigned his lobbying job at UCA in April 2014, saying he didn't want to be a distraction. Morton has also denied any quid pro quo; he has said he never intended the contributions to Baker's PACs to be related to the Bull case. Speculation has ebbed and flowed that the Justice Department is probing even broader allegations of wrongdoing, given that Baker and Morton are such well-connected political figures.
Separately, the two men are the subject of a civil suit filed in Faulkner County Circuit Court by Buchanan, the lawyer for the estate of Martha Bull, who says his clients were deprived of their property (that is, the jury's damages award in the original negligence case) by "a closed door tete-a-tete of electoral corruption, bribery and felonious abuses of public trust." Morton, Baker and Maggio together conspired to deliver the reduced verdict, Buchanan alleges; attorneys for Morton and Baker have asked Special Judge David Laser to dismiss the case. Much depends on Maggio's plea agreement, which Morton's attorneys argue should not be admissible as evidence, since Maggio is still attempting to withdraw it.
"Without Maggio's plea agreement, plaintiffs have offered no evidence that Morton bribed Maggio — other than speculation based on the coincidence of the timing of Morton's checks to the PACs and the remittitur in the Bull case," a recently filed brief for Morton states.
As the lawsuit unfolds, though, so does another election cycle.
Michael Morton and other nursing home owners are hoping to convince voters this fall to amend the state's constitution to circumscribe the right to sue for medical malpractice or negligence. If successful, it will make verdicts like those the jury rendered against Morton's Greenbrier nursing home an impossibility. In fact, it seeks to cap such damages at one-fourth the reduced amount in the Bull case, at just $250,000. When coupled with the time and expense necessary to perform such complex litigation, that could remove any incentive for lawyers to represent individuals injured by a nursing home or their families.
Besides capping "non-economic" damages a jury in a malpractice suit may award at $250,000, the ballot initiative would also limit attorneys' fees to one-third of the net recovery in such a suit. Anecdotally, when canvassers for the petition approached voters this summer, they typically only mentioned the second aspect of the amendment and framed the measure as a means of stopping predatory attorneys from charging exorbitant fees.
But the first point is the crucial one for nursing homes. Non-economic damages are those awarded for harms that are difficult to quantify, such as pain and suffering (whereas "economic damages" include medical bills or lost future income resulting from an injury). Non-economic damages are especially essential in cases involving nursing homes, since residents typically have no potential to earn future income.
Morton would not comment on the ongoing litigation brought by Buchanan, but his spokesman, Matt DeCample, provided the Times with the following statement regarding the proposed constitutional amendment: "Mr. Morton feels that tort reform is necessary to ensure that Arkansas nursing homes can stay in business and continue to serve those who need them. Owners and operators cannot get conventional insurance on their facilities because of the unceasing barrage of unchecked litigation. This means that any case, whether founded or frivolous, can potentially shut down a nursing home, displacing residents and costing Arkansans their jobs."
Martha Deaver, the president of Arkansas Advocates for Nursing Home Residents, said the proposed amendment is "a scam" that would give facilities "a free pass to abuse and neglect the elderly." In July, she formed a committee to fight the measure. "Arkansans have a constitutional right to hold corporate wrongdoers of the health care industry accountable when they abuse and neglect our loved ones, and we are going to work hard to preserve that constitutional right," Deaver said in a statement. "We will vigorously oppose the corporate nursing home owners' efforts to devalue human life."
If past battles over tort reform are any indication, the state's trial lawyers can be expected to oppose the amendment and may well contribute to Deaver's effort this fall (as of Aug. 8, her committee had reported no contributions). Generally speaking, attorneys have a vested interest in preserving the ability to sue for wrongdoing, just as medical providers generally have a vested interest in preventing those suits. However, although the state's main doctors' lobby has endorsed the current push for tort reform, there's no question it is primarily the project of nursing homes. In May and June, individual physicians and pharmacists contributed about $1,600 to the canvassing effort. The vast majority of the rest of the contributions — over $600,000 during that period — came from nursing homes and their trade group, the Arkansas Health Care Association. Rachel Davis, a spokeswoman for AHCA, said the organization has "long supported this type of reform because it benefits Arkansans, the medical community and our members." An excessively litigious environment for providers "increases health care cost for everyone," Davis said.
Unlike individual candidates' campaigns, there are no limits on the amount of money an individual can give to a ballot initiative committee. Nonetheless, it is difficult to say how much money Morton himself has invested in the push for tort reform. His business entities contributed $135,000 in June, filings show. But it also seems reasonable to assume the state's largest operator of nursing homes has been a major source of funds for AHCA, which provided $330,000 to the campaign in May and June. AHCA is a private entity and does not typically disclose its donations, although that could change in this case: Matt Campbell, the Blue Hog Report blogger, has filed an ethics complaint against AHCA, contending that state law says an entity contributing more than 2 percent of its annual revenues (around $2.25 million in recent years) to a ballot access committee must itself file as a committee and disclose revenue and expenditure information.
(UPDATE, Aug. 11: Prodded by Campbell's complaint, the AHCA this week filed disclosure of its donors. As expected, Morton's businesses provided tens of thousands of dollars to the constitutional amendment campaign via the AHCA.)
Donations to trade associations, like donations to PACs, can obscure the source of political giving. Then again, Morton makes no secret of his desire to see tort reform in Arkansas. To him, it's a matter of sensible public policy — just as his donations to Maggio were a matter of supporting a judge with the right judicial philosophy that happened to align with his business interests.
Morton may well never be charged with a crime for his role in the Maggio bribery case. It is difficult to prove a campaign contribution definitively constitutes a bribe. Ironically, it perhaps works in Morton's favor that he has been so profligate in political spending in general. In the 2014 election cycle alone, campaign finance reports show Morton and his companies gave at least $250,000 in Arkansas politics, donating to both gubernatorial candidates, candidates in at least a dozen legislative races, three candidates running for open seats on the Arkansas Supreme Court, and candidates in a number of down-ballot judicial races. Republican Attorney General Leslie Rutledge alone received around $92,000 from Morton that year. Associate Supreme Court Justice Rhonda Wood — a friend of Maggio's who also received fundraising help from Baker — received over $70,000 in 2014.
Assume for a moment that Morton didn't give $30,000 to Gilbert Baker's PACs on July 8, 2013, with a specific outcome in mind regarding the case then before Judge Maggio. Assume that the checks he sent to Baker, although intended eventually for Maggio's campaign, were not meant to obtain a quid pro quo in reducing the Bull verdict. If that's so, why would Morton give tens of thousands of dollars to Maggio's campaign? For the same reason he gave to so many other candidates and the same reason any donor gives to any politician: access. In Morton's sworn statement to the ethics commission in 2014, he told an investigator that "the best way to get access to politicians is to support them in political races." The investigator summed up his subsequent remarks like this (Morton's statement begins on page 10 of the document):
Campaigning is an industry; it is big for journalism, media, it is big for everything. Candidates want to build up money early to scare their opponents away, so he is asked early, every time. It never ends, he reiterated. It starts for him as soon as one election is over for the next. People get to him early and often. He wants that, however, because he wants to be able to have access to them to talk about his industry so they can provide quality care for the elderly in Arkansas.
This fall, a presidential race of unprecedented spectacle will overshadow this and every other state-level issue in Arkansas. But the national discontent that fueled the rise of Republican Donald Trump (and Democrat Bernie Sanders) has been born in large part by a chronic sense among much of the voting public that the political system is rigged — that the few people with "access" get to make the rules, and that that access can be bought and sold. Traditionally, for those who lack connections and wealth, one avenue for political access is the ballot box. Another is the civil justice system, which provides a means for the powerless to demand accountability from the powerful and seek redress for legitimate grievances. In Arkansas, those rules may also change after the November election.
Max Brantley provided much of the original reporting for this story.
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