If you read the daily newspaper or the Arkansas Blog you might have seen reporting on activities of the Arkansas Teacher Retirement System.
Under the leadership of former state Sen. George Hopkins of Malvern, it has taken a role as plaintiff in about a dozen class-action lawsuits alleging bad work by investment companies.
The practice came to light when a federal judge in Massachusetts commissioned a special report that looked into attorney fees in one of the suits. It produced a $300 million settlement with State Street Corp. (including $40 million for ATRS) and $75 million in attorney fees for the Labaton Sucharow firm of New York, among others.
Belatedly, the judge learned Labaton had paid $4 million to a Texas lawyer, Damon Chargois, as a “finder’s fee” in the case. The judge’s eyebrows were raised by the likes of this note to Labaton from Chargois:
“We got you ATRS as a client after considerable favors, money spent and time dedicated in Arkansas … “
Say what? Here’s some of the story.
Steve Faris, another Malvern homeboy who succeeded Hopkins in the Senate, introduced the Labaton firm to ATRS in 2007. He made the introduction on behalf of a friend, Tim Herron, who works in Chargois’ law firm.
Herron worked in Arkansas, too. His uncle, Gordon Powell, worked for the House of Representatives during sessions. Powell also was board president for Central Arkansas Telephone Cooperative in rural Hot Spring County, outside Malvern. Faris was employed there for a time as manager. Hopkins was the co-op’s legal counsel. Paul Doane was ATRS leader at the time of first Labaton contact, but after Hopkins took over in 2008 the class-action cases multiplied. Hopkins told the judge he’d gotten encouragement from political leaders, including the governor’s office, to enter the cases. Chargois apparently got fees in at least nine of them. It was perceived undercompensation in some cases that led to his email complaint to Labaton.
The political involvement with Arkansas doesn’t end at George Hopkins’ door. The Labaton firm, Chargois, Herron and Hopkins and his wife contributed tens of thousands of dollars to the political campaigns of former State Treasurer Martha Shofner. She served then on the ATRS Board, which took votes on hiring law firms.
The Arkansas Democrat-Gazette’s Chad Day reported in 2013, shortly before Shofner went to prison for taking kickbacks from a bond salesman, that Herron had provided an apartment to Shofner rent-free for about four years. The reporting then indicated Faris had hooked Herron up with Shofner.
Faris is something of the Zelig of Arkansas politics. I met him first as gatekeeper for Secretary of State Bill McCuen, who would die after being paroled from prison with cancer while serving a sentence for public corruption. Years later, as a Senate staff nabob, Faris landed a pied a terre in a converted steam plant on the Capitol grounds set up during the McCuen era.
Faris has won seats on all sorts of government committees, including the Arkansas Lottery Commission. After his tenure in the Senate and despite being a Democrat, Faris was hired by Republican Michael Lamoureux to be his right-hand man when Lamoureux was Senate president pro-tem. Note: While in the legislature, Lamoureux was on the payroll of a political organization and a phone company with legislative agendas. He served briefly as Govermor Hutchinson’s chief of staff, perhaps influencing Hutchinson’s appointment of Faris to the Arkansas Public Employees Retirement System Board. Lamoureux has since become a lobbyist and it’s also been disclosed that he figured in the long list of legislators who helped ship state money (unconstitutionally) to the corruption-enmeshed Preferred Family Healthcare and affiliates.
A related tidbit: In 2012, eight members of the Labaton firm contributed $500 each to a successful candidate for state legislature in Arkansas. His name? David Kizzia. Hometown? Malvern.
Must you pay to play in Arkansas? To quote what President Trump said of Vladimir Putin’s disavowal of election interference: The denials from all involved are “extremely strong.”