As evidence of an alleged bribery scheme in the Arkansas legislature, the federal guilty plea entered Thursday by former lobbyist Rusty Cranford cites a 2015 bill sponsored by state Sen. Jeremy Hutchinson (R-Little Rock) that appropriated up to $3 million in state funds to Teach for America, a client of Cranford’s firm at the time. TFA, a national nonprofit, enlists recent college graduates to serve as teachers in low-income communities for at least two years.
The plea agreement contains no allegation of wrongdoing on the part of TFA. However, the mention of the TFA grant is noteworthy in part because the funding in question involved both Republican Governor Asa Hutchinson (who is the uncle of Sen. Hutchinson) and his challenger, Democrat Jared Henderson, who
The federal information in the Cranford case, which was filed by the U.S. attorney for the Western District of Missouri, does not name Sen. Jeremy Hutchinson or Teach for America. However, it refers to an “Arkansas Senator A” who filed Senate Bill 62 of 2015 for the benefit of “Entity H,” which it describes as “an out-of-state non-profit corporation … focused on expanding opportunities for
The federal information states that from January 20, 2015, to April 2015, “Senator A” was paid over $44,000 by entities associated with Cranford. Much of that payment came in the form of legal fees paid to the senator. (Hutchinson, an attorney, was retained by Preferred Family Healthcare, a behavioral health nonprofit that employed Cranford as an executive. The Cranford plea contains many additional allegations of bribery involving Hutchinson and other state legislators of both parties in regards to this nonprofit and its subsidiaries, as detailed elsewhere.)
The filing spells out the alleged quid pro quo between Cranford and “Senator A” as follows: “SB 62 and SB 655 were bills designed to be favorable to the interests of Entity H, a CRANFORD Coalition client. In exchange for the stream of benefits coming from [Preferred Family Healthcare], the CRANFORD Coalition, and CRANFORD, Arkansas Senator A agreed to advance the interests of Entity H through his introduction of and vote on SB 62 and his introduction of SB 655.” (Again, Entity H appears to be Teach for America.)
Sen. Hutchinson has said through an attorney that he’s done nothing illegal or unethical and that Cranford’s plea mischaracterizes his legitimate work as an attorney.
Because of how the legislative budgeting process works, the passage of a $3 million GIF appropriation bill wouldn’t necessarily mean the designated grantee would receive that much money. The amount of GIF funding actually available depended on the size of the state budget surplus in a given year. This meant GIF appropriations often were not fully funded.
In this case, though, TFA received the full $3 million: In January 2016, Governor Hutchinson announced he was allocating $3 million of his discretionary GIF funds to Teach for America over the next three years to pay for 150 new TFA teachers to be assigned to school districts in south and east Arkansas. The governor made the announcement alongside Henderson, who remained in his role as TFA director until June 2017. Also present at the conference was Walter Hussman, the publisher of the Arkansas Democrat-Gazette, who represented a group of Little Rock businessmen who donated an additional $3 million in private funds to hire new TFA teachers in the Little Rock School District.
The federal information states that “Entity H paid CRANFORD and his entities a total of $76,000 beginning on November 17, 2014.”
Asked Thursday afternoon about the TFA grant, Governor Hutchinson’s spokesman, J.R. Davis, said the governor was not yet prepared to comment but would be making a statement soon. Davis said the governor’s office was “as surprised as anyone” when the news of Cranford’s plea broke.
“Breaking news for you is breaking news for us, in this case,” he said.
In a phone interview, Henderson confirmed that TFA retained Cranford’s service as a lobbyist beginning in 2014 and confirmed that Cranford brokered a meeting between himself and Sen. Jeremy Hutchinson in advance of the 2015 session. Henderson said he was contacted by the FBI last June about the investigation and spoke with federal investigators for about an hour. He also confirmed that Cranford emailed him in 2015 about the progress of the two pieces of legislation Sen. Hutchinson sponsored, SB 62 and SB 655, as outlined in the federal court filing.
Asked whether he had any knowledge at the time that the senator was being paid by Cranford or entities associated with Cranford, however, Henderson replied, “absolutely not, no.”
“When I spoke to the FBI and they started bringing [Senator] Hutchinson into this, frankly I felt a lot of things but mostly, I was just angry,” Henderson said. “When we built our relationship with Sen. Hutchinson, he came out and looked at our schools, he talked to some of our teachers, he met some of our students, he talked to a couple of our principals. I really thought he was supporting us because we convinced him that we had a great mission and a good model, and to learn that he might have had other motivations is pretty enraging, to be honest.”
Henderson met Cranford that fall through a TFA donor in Pine Bluff, he said. Henderson said he began seeking a lobbyist in 2014 because he hoped to convince the legislature to devote $3 million in annually recurring funding to TFA’s mission of providing teachers in rural Arkansas. Such funding is not uncommon in other states, he said.
Henderson and TFA had hoped for a line item in the state education
“That’s when I went and raised the money from local philanthropists. We were able to do that relatively quickly and we presented the governor with a letter basically saying, ‘Listen, these donors have committed a little over $3 million if you will commit $3 million of your GIF money.’ “
The federal information appears to reference these efforts. On page 22, it states:
On February 13, 2015 a representative of Entity H emailed CRANFORD and stated that they were working to secure $3 million in pledges to Entity H in an effort to assist Arkansas Senator A’s ability to influence the Arkansas Governor’s office by providing an incentive for the Governor to provide the entire $3 million in GIF funds to Entity H.
The $3 million in state funds announced in 2016 was to be spent only on funding TFA’s activities in rural school districts. The matching $3 million in private funds were to be spent on expanding TFA to Little Rock.
Henderson said Friday that the only two-thirds of the $3 million GIF grant was expended, because of decisions within TFA’s national organization to shift its focus more toward urban areas. “We actually only claimed $2 million of that three,” he said. Henderson said he met with the governor last year to notify him of the change. The state grant paid for just over 100 teachers, Henderson said, or about two-thirds of its original goal of 150 teachers.
Update, 3:50 p.m.: Democrat-Gazette publisher Walter Hussman said in a phone interview Friday afternoon that he was unaware that Cranford’s plea agreement referenced the state grant to Teach for America provided by the governor. Hussman said he worked with Henderson to raise the private matching funds for TFA in 2015.
At the time, the Education Department had just assumed control of the Little Rock School District — the state Board of Education ordered the takeover that January — and Hussman said the department seemed receptive to TFA coming to the LRSD.
“Little Rock didn’t want them, under the previous school board,” Hussman said. “TFA had done such a fabulous job in east Arkansas and many other places. … So the idea was, ‘Why don’t we provide private funding to get Teach for America to come to Little Rock?’ ” (In some school districts, TFA is controversial in part because its recruits are by definition inexperienced and typically do not come from the communities in which they teach; they may also diminish the collective bargaining power of existing teachers.) The concept behind the public/private partnership was that Little Rock donors would pay for the program in the LRSD, leaving the state funds for other districts.
“I was very enthusiastic about it,” Hussman said. “Let’s let LR step forward and do something for our own schools, and let’s let the state take care of these poor kids in East Arkansas.”
Hussman said he didn’t recall whether he or Henderson first had the idea for the public/private partnership. “I just assumed the state would come up with the $3 million … How they did it or what the mechanism was, I didn’t get involved with that at all. I guess Jared took care of that,” he said.
Hussman said he never met with legislators about the TFA funding and said he didn’t recall speaking with Governor Hutchinson about contributing $3 million from his discretionary fund. “I talk to him from time to time about education, but I never lobbied him to say ‘Hey, why don’t you give the $3 million?’ I think Jared is the one that did that, and I think it’s great he did it. I really enjoyed working with Jared and thought he was a great fellow to work with — very capable, competent, and a real honest guy,” Hussman said.