A reminder the indictment of former Sen. Jeremy Hutchinson for using campaign money for personal expenses was not an end to the investigation of the allegation that he was paid huge sums in legal retainer fees in return for legislative work for Preferred Family Healthcare.
Rusty Cranford, the admitted felon and former lobbyist and Preferred Family Health executive, said in his guilty plea that PFH had paid $500,000 to Hutchinson for legislative actions favorable to the company. Hutchinson, through his attorney, has said these were legitimate fees for legal work.
Last week, Hutchinson was indicted on campaign finance-related charges, but no charges related to the alleged bribery. We learned then that this should not be taken as a signal to the end of the bribery investigation. At least one other legislator/lawyer has also been under investigation for a similar fee deal.
Today, I happened on a federal court document to add to the appearance that Hutchinson’s legal fees were bogus.
It’s in a lawsuit transferred to federal court in July. In it, Preferred Family Health sues Hutchinson and the law firm in which he was formerly associated, now Steel, Wright
It covers ground we’ve mentioned before — a $357,000 default judgment awarded against Health Resources of Arkansas in Batesville. A former employee, David Coleman, had sued for unpaid retirement benefits. Health Resources became a part of Preferred Family Healthcare. Hutchinson failed to respond to filings and failed to appear at hearings. He told the Batesville Guard at the time that there were various communication problems, but conceded: “It’s not a good situation.”
The federal lawsuit by PFH says Hutchinson didn’t advise Health Resources or PFH of developments in the case and “persistently concealed adverse rulings.” It notes he’d acknowledged the date of a hearing on a motion by Coleman for summary judgment, but failed to appear. After the judgment was entered, Hutchinson failed to appeal the decision, “which was entirely premised on the persistent failures and omissions of Mr. Hutchinson and SWGH.”
Ultimately, PFH had to pay $383,805 to satisfy the judgment and subsequent writs of garnishment. PFH argues it would have won the case had Hutchinson provided proper representation. The “conscious indifference” in the case justifies punitive damages as well, the suit argues.
The lawsuit also says:
PFH specifically reserves the right to amend and plead further allegations and causes of action in this case. The specific allegations set forth above do not and shall not constitute a complete list of the negligent acts committed by Mr. Hutchinson and SWGH. Mr. Hutchinson may have caused additional and material financial injury to PFH/HRA through additional acts and omissions, as suggested by his invoicing and receiving monthly payments of $108,000 in 2016 and $271,000 in 2013-2015, without corresponding evidence of any legal work. A recent Plea Agreement, filed in the United States District Court for the Western District of Missouri, UnitedStates v. Rusty Cranford, 18-03020-01-CR-S-BCW (Attached hereto as Exhibit “C”), in which Mr. Hutchinson is referred to as Arkansas Senator A, further calls into question Mr. Hutchinson’s cause of financial damage to PFH.
There’s likely insurance available to seek an award in this case, if successful.
The Steel firm is contesting any responsibility. It cites statute of limitation issues, for one thing, but also cites “the doctrine of unclean hands.” Simply put, PFH was in cahoots with Hutchinson:
…. defendant states that plaintiff’s claims are barred, in whole or in part, due to its own criminal acts.
Hutchinson’s own defense is much the same, including that the PFH suit is barred by the “doctrine of unclean hands.” We can take judicial notice that many unclean hands were involved in this mess.
UPDATE: Nate Steel of the Steel firm responded to my question about the case:
As a professional association, members of our firm have always managed our own clients and caseloads, with few exceptions. This client was exclusively Mr. Hutchinson’s. No other member of the firm performed any legal work or received any fees. The firm is named in the lawsuit for purposes of insurance coverage only.
There’s been a change in leadership at the behavioral health services provider since the scandal erupted over abuse of Medicaid funds through bribery, kickbacks, sweetheart job deals