Ouachita County judge indicted

— Federal agents arrested Ouachita County Judge Mike Hesterly on Thursday in an indictment that accuses him of awarding FEMA disaster-relief funds to a Bearden contractor in exchange for an agreement to contribute to Hesterly’s 2010 re-election campaign, court documents released Thursday showed.

Hesterly, 47, of Camden and Harry Clemons Jr., 39, of Bearden are each charged with one count of conspiracy to defraud an agency of the United States and a count of bribery concerning a program receiving federal funds, according to a federal indictment.

The charges were announced by Conner Eldridge, the U.S. attorney for the Western District of Arkansas.

Hesterly - who was indicted under his full name of James Michael Hesterly - was held without bail in the Union County jail Thursday. Clemons was issued a summons to appear to face the charges. Both men are to appear at the federal courthouse in El Dorado at 10 a.m. today.

The federal indictment also accuses Hesterly of violating Arkansas bidding law, including failing to follow a sealed bidding process, not properly advertising the bid, not awarding the contract to the lowest responsible bidder and failing to file the proper bid documents with the Ouachita County clerk’s office.

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The amount of the reported campaign contribution was not specified in the indictment, nor does it say whether Hesterly received any money.

Arkansas State Police spokesman Bill Sadler confirmed late Thursday that troopers are investigating Hesterly, but he couldn’t say whether the probe involved any of the allegations in the federal indictment.

“There is a state police investigation relating to what could amount to violation of Arkansas laws ... involving Judge Hesterly,” he said.

Hesterly is the lone subject of the state investigation, Sadler said.

FBI Supervisory Special Agent Kim Brunell said Hesterly surrendered Thursday without incident to federal agents in El Dorado. Brunell confirmed that Clemons remained free and declined to give a reason why federal agents want Hesterly detained.

FBI agents from the El Dorado office led the public-corruption investigation, Brunell said.

In November 2011, Hesterly confirmed to the Arkansas Democrat-Gazette that U.S. attorneys were investigating his office after subpoenas were served that month. Federal officials collected information related to Federal Emergency Management Agency disaster-assistance funds awarded after tornadoes and flooding in October 2009.

Court documents released Thursday accuse Hesterly and Clemons, owner and operator of Clemons Construction, of conspiring “through a corrupt bidding process” to award Clemons a contract to remove tornado debris in exchange for a payment to Hesterly’s re-election campaign.

Hesterly was first elected as county judge of Ouachita County in 1996.

“Clemons arranged for two other bidders to submit intentionally inflated bids to Hesterly through fax. Clemons then met with Hesterly at his office and submitted a bid on behalf of himself and another company in the amount of $120,730, a total amount below the inflated bids,” according to a statement from Eldridge’s office concerning the indictment.

“Hesterly accepted Clemons’ bid on March 26, 2010, and, on April 8, 2010, applied for federal funds from FEMA to help Ouachita County pay for the contract,” the statement said. “Hesterly represented to FEMA that Clemons was the lowest bidder among the three bids that he had received.”

Federal rules require that the contract be awarded through a sealed bid process and follow applicable state laws.

According to the indictment, no sealed bidding took place.

The indictment also accuses Hesterly of failing to properly advertise for the bid.

In August 2010, Clemons “submitted documentation to Hesterly stating that all work on the contract had been complete and requested a payment of $69,865 for Clemons Construction,” Eldridge’s statement said. “Hesterly signed an order allowing Clemons’s claim for payment to go through.”

Clemons then received a check in that amount from the county, according to court files.

Through a spokesman, Randy Coleman, special agent in charge of the FBI’s Little Rock field office, said the investigation was another example of federal authorities taking on local corruption.

“Today’s arrest demonstrates our commitment to prosecuting allegations of corruption in our state wherever they may be,” Coleman said.

Front Section, Pages 1 on 01/18/2013

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