FBI confirms Maggio inquiry

May 2013 seen as key time

CONWAY — The FBI on Thursday confirmed an investigation into campaign contributions made to ousted Circuit Judge Michael Maggio’s failed Arkansas Court of Appeals campaign through political action committees funded almost entirely by Fort Smith businessman Michael Morton and his companies.

FBI spokesman Debra Green said Thursday that she “cannot make a comment since it’s an ongoing investigation.”

In an email Thursday, Maggio attorney Lauren Hamilton said, “Having not been contacted by the FBI for a statement, I am unwilling to speculate on the scope of the investigation and though I would like to say more, under the current circumstances, it’s just not possible.”

On Sept. 11, the Arkansas Supreme Court ordered Maggio removed from office, months after it stripped him of all cases.

Much of the attention surrounding Maggio’s decision to lower a multimillion-dollar judgment against a nursing home owned by Morton has focused on July 2013. Yet, two days in May 2013 were also important in the case and in Maggio’s since-halted appeals-court campaign.

The Faulkner County Circuit Court jury announced its verdicts just after Maggio called the court back into session at 5:47 p.m. on Thursday, May 16, 2013. Less than three hours later, at 8:20 p.m., juror Jamie DuVall of Conway emailed Maggio to express second thoughts over the unanimous judgment of $5.2 million.

By 10:43 a.m. Friday, May 17, Maggio had contacted attorneys on both sides of the case by fax to set up a meeting for the following Monday in regard to DuVall’s email. The judge told attorneys not to contact any jurors, as lawyers occasionally do after a trial.

Sometime around May 17, meanwhile, Maggio reached a contract agreement with a political consultant for his forthcoming campaign for a seat on the Arkansas Court of Appeals. It’s a race Maggio abandoned this year in early March amid contention over his actions in this case and unrelated comments he had made online.

Morton told state investigators earlier this year that he “was first contacted in May of 2013” about giving money to political action committees during the pending case, according to an Arkansas Ethics Commission summary of his sworn testimony. The summary did not give a more specific date.

The series of events in the case in May and July 2013, even if coincidental, are “exactly the sort of thing” that FBI agents are likely examining as they investigate contributions that Maggio’s campaign got from the political action committees, said I.C. Smith, a former agent in charge of the FBI office in Little Rock.

“You’re usually very suspicious of such coincidences,” said Smith, who retired in 1998. “That doesn’t necessarily mean there is a criminality. But on the other hand, if you’re looking at it purely from an investigative point, particularly … on corruption matters, you look at it with a jaundiced eye, with skepticism.”

Smith, who now lives in Virginia and has no direct knowledge of the Arkansas investigation, commented based on his experience in working on corruption investigations, including one involving former Arkansas Sen. Nick Wilson, who was convicted of tax evasion in 1999 and racketeering in 2000.

Referring to the sequence of events, Smith said, “This is something an investigator would do. You make a flow chart, such and such date this happened and go through that thing. … That’s a very fundamental step by a good investigator.”

Leigh Coffman, the court reporter for the 20th Judicial Circuit’s 2nd Division in which Maggio presided, said she turns her tape recorder on when a trial goes into session.

In the eight-day trial of the negligence lawsuit over the 2008 death of Martha Bull, 76, of Perryville, Coffman turned her recorder on for the final time at 5:47 p.m. May 16, 2013. The jury then returned five verdict forms, and Maggio adjourned the court session at eight seconds after 5:55 p.m., Coffman said.

Unlike in a criminal trial where a unanimous verdict is required, just nine of the 12 jurors must agree on a verdict in a civil trial. In unanimous decisions, only the foremen sign the verdict forms. In a verdict that is not unanimous, the form requires the signatures of nine concurring jurors.

The jury in the Bull case unanimously agreed to hold the Morton-owned nursing home responsible for “ordinary negligence” that was “a proximate cause” of damage or injuries suffered by Bull and unanimously agreed on the $5.2 million judgment, court records show. Jury foreman Scott Munn, who has since moved to Texas, signed that form, which also included the handwritten sum that the jury decided Greenbrier Nursing Home and Rehabilitation Center should pay.

In the two nonunanimous verdicts, including the one that found the nursing home responsible for “medical negligence,” DuVall’s signature was the first of the required nine signatures. The only other unanimous verdict was the one in which the jury agreed that “a wrongful act or omission” was not “a proximate cause” of Bull’s death, so only foreman Munn signed the form.

In the email to Maggio, DuVall wrote in part, “It is my strong belief that awarding this amount of money is wrong. I know most jurors weren’t very comfortable awarding this amount either. … Surely, 12 people cannot really award 5.2 million dollars after deliberating a few hours.”

Reached at her Conway home recently, DuVall declined to comment. Asked if anyone on either side of the case had contacted her, DuVall said, “I don’t want to talk about it. I want it to be over with … my part.”

Smith said a good investigator would take note of the juror’s “misgivings” so shortly after the trial.

“You always remember, particularly when you’re dealing with civil cases more so than criminal cases, jurors can be susceptible to pressure from family, as well as” the news media and other things, Smith said.

Asked if the jurors had disagreed during deliberations about the size of the judgment, foreman Munn said, “I think the signatures will speak for themselves.”

“It was a process, and it was followed,” Munn said.

Another juror who spoke on condition of anonymity said the jury reached its decision by adding what each of the 12 jurors thought was the proper amount of money to award the Bull family and then divided that total by 12.

“We had lots and lots of discussion on it, and there was a lot of agreement and disagreement,” she said. “This was the way it turned out. … I can only speak for myself. I felt it was too much. … I feel what a jury decides is to the best of their ability, and I don’t think any one person is totally right or wrong.”

Jeffrey Hatfield, a lawyer with the Little Rock firm that represents some of Morton’s nursing homes, said Morton’s lawyers in the Bull trial did not contact any jurors, including DuVall, after the verdict.

“We did not and have not,” Hatfield said recently. “We got the order that came in from Judge Maggio” on May 17, 2013. “It would not be our practice anyway. I wouldn’t call people until a week or so and give them a break.”

Thomas Buchanan, the Little Rock attorney who represents two of Bull’s daughters who sued the nursing home and others, said he also has not contacted jurors since the trial.

DuVall re-sent her email to Maggio at 7:41 a.m. that Friday, May 17, saying she wasn’t sure it had gone through earlier.

At 10:43 a.m., Maggio’s office sent a fax to five lawyers in the case about DuVall’s email. He redacted her name and email address and set a hearing for the following Monday at 1 p.m.

Maggio said he pretty much agreed with the plaintiffs that the email “was really nothing he could consider,” Buchanan has previously said.

Out of court, Maggio also was busy during this time moving forward with his political plans.

According to a staff summary of testimony before the Arkansas Ethics Commission, which is among the agencies that have investigated Maggio, campaign consultant Clint Reed told the staff that former state Sen. Gilbert Baker, R-Conway, had reached out to Reed at “the end of the last legislative session” to ask whether Reed would help with the Maggio campaign.

The 2013 legislative session ended May 17, the day Maggio was also dealing with the DuVall email and perhaps other judicial business.

Maggio also reached out to Reed, the summary adds, but it doesn’t say exactly when that happened.

Reed “presented a budget of how much money it would take for Judge Maggio to win” an appeals court race “around the time that they executed the contract near May 17,” the summary says.

Reed told the commission staff that his consulting company, Impact Management Group, is typically contracted in May for judicial races. Maggio released a statement formally announcing his campaign on June 27, 2013.

According to Reed’s testimony, “it was clear that Mr. Baker helped recruit Judge Maggio to run and made sure that he [Maggio] had the financial resources necessary.”

Invoices from Impact Management Group and payments from the Maggio campaign began in either May or June, Reed said. “Since there was a [state law] prohibition on [judicial campaigns] raising money during that time, Mr. Reed assumes that Judge Maggio was personally paying for it and attributing it as a loan to the campaign.”

Between June and September 2013, Maggio lent his campaign a total of $2,889.53, according to his campaign-finance records filed with the secretary of state’s office. During that period, Maggio paid Impact Management Group a total of $2,000 at the rate of $500 a month.

Maggio never reported a payment to the consulting company for October 2013, and by the time he reported that he had paid the fee again in November, he also was reporting that he had received his first campaign contributions that same month.

At an unspecified date while Maggio was presiding over the Bull family’s lawsuit, Morton said he ran into Baker and Baker associate Linda Leigh Flannigan at Brave New Restaurant in Little Rock. There, Morton told state investigators, he was asked “if he would support Judge Maggio if he ran for Court of Appeals and he said ‘yes,’” the report states, according to a summary of Morton’s testimony before staff members of the Arkansas Ethics Commission.

In Conway, Maggio signed an order entering the judgment on June 4, 2013. A week later, he stayed any proceedings to enforce the judgment in the Bull case, pending the defense’s post-trial relief motions.

On July 8, 2013, Maggio heard the nursing home’s plea for a new trial or a reduced judgment.

Outside court, efforts to get Maggio elected to a higher court moved forward that same day, when Morton signed checks totaling $24,000 to eight PACs, seven of which later contributed a total of $12,950 to Maggio’s campaign. Morton has said it was his understanding that the political action committee donations were intended for the Maggio campaign.

A FedEx receipt showed that the company delivered the checks to Baker’s Conway home on July 9, 2013.

On July 10, 2013, Maggio signed an order denying a new trial and reducing the $5.2 million judgment to $1 million. The order was filed in the circuit clerk’s office the next day.

Morton also signed at least one other significant check July 8, 2013 — a $100,000 donation to the University of Central Arkansas Foundation. Baker delivered the gift to the foundation, which foundation president Shelley Mehl said was “properly receipted” on July 15, 2013. After contention surfaced surrounding Baker, Maggio and the Morton donations, UCA returned the check March 24.

Another political ally of Baker, Don Thomas, also soon donated to the UCA nursing program a $10,000 check dated July 17, 2013. Thomas, a former campaign consultant for Baker, has said he knew nothing about any of the political action committees, even though one of them was named after him and he was listed as an officer on two of them. Unlike Morton, Thomas had previously donated to UCA.

Calls to Maggio, Morton, Baker, Thomas and Reed have not been returned.

The FBI is known to have interviewed at least two people in the matter and has been to Maggio’s former court office.

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