State Treasurer Dennis Milligan signed an agreement Friday with Attorney General Leslie Rutledge to pay a $1,000 civil penalty for violating state law by hiring his first cousin for a job paying $63,000 a year in the treasurer's office.
He paid the $1,000 fine upon signing the three-page agreement, Rutledge said.
Milligan also voluntarily reimbursed the state for Sam Swayze's gross salary of $6,941.62 for the period the relative worked for his office.
Milligan, a Benton Republican who was sworn in as state treasurer on Jan. 13, recalled Friday that he promised Arkansans during his successful campaign last year that he would follow the law and "do what is right in order to restore integrity and accountability to the treasurer of state's office."
"In the early days of my administration, a hiring mistake was made," Milligan said in a written statement, referring to Swayze's selection.
Milligan said he reimbursed the state $6,941.62 on his own for Swayze's gross salary "to make things right with the hard working taxpayers of Arkansas."
Milligan -- who apologized on Feb. 20 for his part in hiring his first cousin -- said Friday that "once again, I apologize to my family, my staff and, more importantly, the people of Arkansas."
"As a result of our internal review, I ordered the implementation of a new policy and procedure to ensure this does not happen again," he said.
Milligan, who is a former Saline County circuit clerk and chairman of the state Republican Party, said he hopes his actions "close this issue and allow us to get back to the job of governing."
Swayze started work for the treasurer's office Jan. 14 as the investment manager assistant.
He has worked as a campus supervisor at North Little Rock High School, director of business development at the Better Business Bureau, and vice president and financial adviser at Delta Trust Investments, according to his resume. He also worked for Smith Barney, Prudential Bache Investments, Dean Witter Reynolds, Shearson American Express and Swink and Co. Investments.
Swayze was allowed to resign after it was discovered that his employment violated Arkansas Code Annotated 25-16-1001 through 1007 and the Office of Personnel Management Policy 30.15, and Swayze's last day was Feb. 13, Milligan spokesman Grant Wallace said last month.
Milligan realized he wasn't allowed to hire Swayze after reviewing Swayze's personnel papers and statement of financial interest and a subsequent review of state law and policy, Wallace has said.
Milligan has said he had been "unaware of the extent to which relationship was defined in the state nepotism law.... I thought the policy applied to the immediate family -- mother, father, brother, sister, wife, son or daughter."
Under Arkansas Code Annotated 25-16-1005, a public official who knowingly violates 25-16-1002 (A) "shall be subject to a civil penalty of one thousand dollars ($1,000)" and the attorney general may file suit in Pulaski County Circuit Court to collect the penalty.
Rutledge, a Republican from Little Rock, said she concluded her investigation of Milligan and Milligan paid "the maximum civil penalty" of $1,000 to the General Revenue Fund account of the State Apportionment Fund.
"Treasurer Milligan has met the requirements set forth in the settlement, and I now consider this matter resolved," she said in a written statement.
Under Arkansas Code Annotated 25-16-1004, "a person commits an offense if the person approves an account or draws or authorizes the drawing of a warrant or order to pay the compensation of another person employed in violation of 25-16-1002." The offense is a Class A misdemeanor.
Pulaski County Prosecutor Larry Jegley, a Democrat, could not be reached for comment by telephone Friday afternoon. Swayze also could not be reached for comment by telephone Friday afternoon.
State Democratic Party spokesman Candace Martin said Friday that "it is extremely discomforting that Dennis Milligan, the elected official in charge of the State's treasury, has demonstrated such a poor grasp of basic government ethical practices and hiring laws.
"However, this incident is merely another example of a larger pattern of ethical misconduct on the part of Mr. Milligan, not the least of which was the attempted blackmail of his primary opponent during the 2014 campaign," Martin said in a written statement, referring to former Rep. Duncan Baird of Lowell, who lost to Milligan in the primary.
In November of 2013, Baird told reporters that Milligan claimed to have damaging information about him and urged Baird to drop out of the race unless "you want to see this on the 7 o'clock news."
The information was a video of Baird and three other lawmakers, including House Speaker Davy Carter, R-Cabot, walking into the state Capitol with two women about 2 a.m. Oct. 18, 2013, after a special legislative session had finished business for the day. The group's members wanted to go up to the Capitol roof, but they were turned away by Capitol police, according to emails about the visit.
At that time, Milligan said it was "simply a lie" that he wanted Baird to drop out of the GOP primary race. That prompted Baird to give reporters copies of what he said was his taped conversation with Milligan during his meeting at a Krispy Kreme doughnut shop. A voice on the tape says "Here's the bottom line, you're finding a new career, you're not going to run for state treasurer. OK ... you want to see this on the 7 o'clock news?"
Milligan later said he had no plans to use the information himself, but that "my sources said they planned to leak it." He declined to disclose his sources.
Baird is now Gov. Asa Hutchinson's budget director.
Hutchinson declined Friday to comment through his spokesman about Milligan's settlement agreement with Rutledge.
Milligan is the second state treasurer in the past 11 years to be sanctioned for employment of a relative or relatives.
In 2004, then-Democratic state Treasurer Gus Wingfield of Delight was fined $750 and reprimanded by the state Ethics Commission for giving promotions and pay raises to members of his family.
In July 2003, Wingfield promoted his daughter, Valerie Wallace, from investment accounting manager to chief operating officer and gave her a raise from $55,995 to $73,143 a year. At that time, he also promoted his other daughter, Margaret Gutierrez, from executive secretary to treasurer assistant, raising her pay from $40,666 to $53,344.
Republican Gov. Mike Huckabee, Democratic Secretary of State Charlie Daniels and Democratic Auditor Jim Wood also had relatives on their staffs. Huckabee gave a job to his brother-in-law, Jim Harris, who is now Milligan's chief of staff.
In 2005, the Legislature enacted Act 2262 to bar constitutional officers, lawmakers or heads of state agencies from hiring or promoting relatives. The law has a grandfather clause, exempting those employed as of Aug. 12, 2005.
Wingfield's successor as state treasurer, Newport Democrat Martha Shoffner, had legal problems of her own.
She was caught on camera accepting bribes from bond broker Steele Stephens, who worked for St. Bernard Financial Services.
Shoffner resigned as the state's treasurer May 21, 2013. Shoffner was convicted in March 2014 on 14 extortion and bribery charges.
During Shoffner's trial, Stephens testified that he secretly gave Shoffner $36,000 in cash over a 2½-year period, during which his employer's share of the state's bond business increased exponentially.