Defense: Ruling an out for Arkansas businessman charged in bribery case

U.S. justices on bribery cited

In a last-minute effort to topple a federal bribery case that took years to hone and is set for trial next week, defense attorneys say a recent U.S. Supreme Court ruling nullifies the charges against Arkansas businessman Ted Suhl.

The last-minute "save" cited by Suhl's defense team is the high court's June 27 ruling voiding bribery convictions against former Virginia Gov. Bob McDonnell.

The high court tossed out McDonnell's 2014 bribery convictions after finding that the actions he took on behalf of people who lavished him with gifts weren't "official acts" and thus didn't equate to "quid pro quo" actions, or the exchange of something of value for a well-defined government action.

The justices said the jury's instructions on what constituted "official acts" were so broad that they could cover almost any action a public official takes. They remanded the case to the 4th U.S. Circuit Court of Appeals to determine whether there is sufficient evidence for a properly instructed jury -- a jury supplied with a clarified definition of "official acts" -- to convict McDonnell of committing or agreeing to commit an official act.

Legal experts say the ruling raises the bar across the country for prosecuting bribery cases.

In Arkansas, Suhl is accused of paying thousands of dollars to influence the official actions of a state official, Steven B. Jones, between 2007 and 2011 to benefit Suhl's mental-health businesses. The companies received more than $125 million in Medicaid reimbursements in that same time period through one of the divisions that Jones, then the deputy director of the state Department of Human Services, oversaw.

But unlike McDonnell, Jones pleaded guilty to accepting bribes for his performance of official acts and is serving 21/2 years in federal prison. He is to testify against Suhl, as is Phillip Carter, a former West Memphis city councilman and Crittenden County juvenile probation officer who is serving two years after admitting to being a "middleman" who transferred the cash between Suhl and Jones.

In a motion filed June 28, a day after the U.S. Supreme Court ruling in the McDonnell case, defense attorneys contend that the entire indictment against Suhl should be thrown out as a result of the McDonnell ruling. An accompanying 12-page brief sets out why they think the "official acts" that Jones performed in exchange for Suhl's money amounted to the same sort of vague actions that the high court said failed to constitute official acts in McDonnell's case.

The indictment against Suhl "is explicit that the only 'action' or 'decision' allegedly agreed upon by [Suhl] and Steven Jones is that Jones 'agreed to look into' various issues," it says. "But such an agreement between a public official and constituent is the type of 'democratic discourse' the Supreme Court sought to protect in McDonnell."

"The flaw with the indictment," the defense contends, "is that after McDonnell, what the government claims are official acts are not official acts at all. The Supreme Court was clear that McDonnell altered the legal landscape for political corruption cases in order to protect routine political interactions from overzealous prosecutions. .... 'Looking into' things is not enough."

The motion is pending before U.S. District Judge Billy Roy Wilson, in whose Little Rock courtroom Suhl is scheduled to be tried by a federal jury starting July 12.

A trial brief filed June 29 by Washington, D.C.-based attorneys for the U.S. Department of Justice, who took over the prosecution of Suhl from local prosecutors after the case became too demanding for the shorter-staffed local office, contends that the defense team "misapplied" the McDonnell ruling and "overstates its implications for this case."

It emphasizes how Suhl "asked Jones to use his official position to change ADHS policies to make them more favorable to [Suhl] and his companies and to exert influence over decision-makers in other government departments to take official action favorable to [Suhl.]"

"In essence," the brief states, "the defendant put Jones on his payroll so that he could obtain favorable official acts as opportunities arose."

Prosecutors say the McDonnell ruling "provides detailed guidance on the proper definition of 'official act' that merely requires more precise jury instructions in this case and does not warrant the pretrial dismissal of this indictment."

The McDonnell ruling defined an "official act" in two parts, saying the government must first identify a matter that is pending or may be pending before a public official, and secondly must prove that the public official made a decision or took an action on that matter "or agreed to do so."

In the McDonnell case, the actions that the U.S. Supreme Court downplayed as relatively commonplace political favors rather than official acts performed in exchange for bribes included setting up meetings, hosting events or making telephone calls on a constituent's behalf.

In Suhl's case, federal prosecutors say the actions that Suhl sought from Jones in exchange for cash went beyond mere routine favors.

They consisted of asking the governor to reappoint Suhl to the Arkansas Child Welfare Agency Review Board, helping expand the site radius for mental health providers so that Suhl's companies could operate in an additional city, assisting in obtaining support for the passage of a Senate bill, assuming responsibility for Medicaid billing and helping open up referrals in northeast Arkansas so that Suhl's companies could receive more business.

Prosecutors haven't said whether Jones actually ensured that those requests were fulfilled. But they have said that the intention of the person offering the bribe, as opposed to what was actually done, is what counts. Defense attorneys have seized on that, noting the Supreme Court's holding that the action taken in exchange for a bribe must include a "formal exercise of governmental power."

The government's brief reveals publicly for the first time that the ties between Suhl, Jones and Carter date back years before Jones became deputy director of the state's largest agency in 2007. It says that in 2004, while Jones was a state representative, he signed a contract to provide "marketing services" for one of Suhl's companies for $1,000 a month -- a contract that will be shown to jurors.

"Jones will testify at trial, however, that he performed no work under this contract," says the brief by a department trial attorney, Amanda Vaughn. "Instead, the defendant's payments to him were simply a 'retainer' fee."

In the bribery case, Vaughn wrote, "The defendant's payments to Jones in this case were thus just another form of the 'retainer' fee the defendant had a history of paying to Jones. ... However, instead of entering into a formal contract, the defendant took multiple steps to conceal his payments," using Carter and another middleman, a now-deceased church pastor, to pass the payments through a church.

Vaughn said Suhl made checks out to the church from a Florida-based company he owns, Millenia Health Care Inc., "which appears to act primarily as a pass-through for the defendant's income."

She said Suhl then had Carter, "his trusted errand man, do the legwork of setting up meetings with Jones" instead of calling Jones directly.

"To discuss the official acts he sought to influence and to make payments, the defendant met Jones and Carter at out-of-the-way restaurants, most often at one in Memphis ... called Texas de Brazil."

Vaughn described how a regular pattern emerged in which Carter arranged a meeting between Suhl and Jones, and Suhl wrote a check to the church from Millenia a day or two before the meeting.

At the meeting at the restaurant, which was usually on a Sunday, Suhl gave the check to Carter and paid for the dinner. Carter then either cashed the check himself or passed it to the church pastor to deposit it into a church account and get cash. Carter or the pastor, John Bennett, then passed cash to Jones, but sometimes kept some or all of the cash for themselves.

The brief noted a "prior business relationship" that Suhl had with Jones, of Marion, as well as with Carter, Bennett and the church -- the Church of God in Christ in West Memphis. It says that from 2002 through 2007, one of Suhl's businesses, which did business as Arkansas Counseling Associates, "made regular payments to the church to rent vans the defendant had arranged to buy for the church and lease back for use with his businesses."

Vaughn said Suhl had also paid Carter "on various occasions" to preach at Suhl's business, The Lord's Ranch in Warm Springs. "And," she said, Suhl "employed Carter's wife in a practically no-show job from 2007 through 2012 while Carter served as a Crittenden County ... juvenile probation officer -- a job in which Carter had the power to and did refer probationers to the defendant's businesses for mental health treatment."

All of that conduct, Vaughn argued, "amounts to a years-long scheme" by Suhl to pay Jones to "exercise the powers of his office to change ADHS policies or pressure other government officials to take official acts favorable to the defendant. Accordingly, the defendant's payments were bribes."

Vaughn said the bribery scheme ended in October 2011 when the FBI, which had been investigating Suhl's relationship with Carter and Jones since 2009, approached Carter. She said he admitted his role in the scheme and agreed to cooperate, which included making secret FBI-monitored recordings with his fellow co-conspirators. She said the FBI confronted Jones in January 2012 and he also admitted his role and agreed to cooperate. Bennett died in 2014.

"In total," Vaughn wrote, "the government's evidence will demonstrate that the defendant made at least 13 bribe payments to Jones over the course of the scheme, with the last one occurring in September 2011. Jones' and Carter's testimony will lay out the scheme in detail. The government will introduce bank, phone and credit card records that lay out the scheme. ... Photographs and recordings will further illuminate the illicit pattern repeatedly followed" by Suhl and his co-conspirators.

The brief reveals that federal prosecutors also plan to play for jurors recorded statements that Carter made in 2010 and 2011, before he was approached by the FBI, to his boss at the juvenile probation office, Chip Barnes. The brief says Barnes was secretly working as a source for the FBI.

Vaughn said she expects Jones to testify that he told Suhl he could no longer be paid by Suhl's company when he became a deputy director at DHS, because DHS regulated his businesses. That, she said, proves the motive for Suhl to funnel his "bribe payments" to Jones through the church.

The government's physical evidence in the case "amounts to 4,000 pages of evidence," Vaughn said, which she said prosecutors hope to present through "summary charts."

The government asked that defense attorneys be prohibited from using "inflammatory rhetoric" to describe the execution of a search warrant at one of Suhl's businesses in 2012 that didn't result in any evidence for Suhl's trial. Prosecutors also asked Wilson to exclude evidence of past charitable donations to the West Memphis church by Suhl, his family and his businesses.

Defense attorneys have said that checks Suhl wrote to the church were just more of the same contributions he and his family made to the church over a period of years.

Metro on 07/05/2016

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AP Photo/File

In a Wednesday, April 27, 2016 file photo, former Virginia Gov. Bob McDonnell speaks outside the Supreme Court in Washington, after the Supreme Court heard oral arguments on the corruption case of McDonnell.

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