An Arkansas lawmaker who was connected this week to a federal corruption investigation -- that has so far netted convictions of four of his former colleagues -- helped steer money in 2015 to the nonprofit Teach for America organization on behalf of lobbyist Milton "Rusty" Cranford, according to court papers.
Cranford pleaded guilty Thursday to one federal charge of bribing Arkansas lawmakers between 2010 and 2017, including an unnamed "Senator A" who sponsored a pair of General Improvement Fund bills in 2015 -- identified as Senate Bills 62 and 655 in Cranford's plea agreement.
The sponsor of those bills, according to legislative records, is state Sen. Jeremy Hutchinson, R-Little Rock, who at the time did legal work for one of Cranford's clients.
Hutchinson, who has not been charged with a crime, could not be reached for comment Friday. His attorney has denied any wrongdoing by the senator and said Friday that Hutchinson had not received any money through Teach for America's payments to Cranford's lobbying firm.
But the disclosure that the investigation into General Improvement Funds has grown to include Teach for America -- referred to as "Entity H" in court papers -- adds a new layer of politics in the unfolding case.
The Arkansas director of the nonprofit organization at the time, Jared Henderson, is a Democrat now running to unseat Republican Gov. Asa Hutchinson. In 2016, the governor pledged $3 million to Teach for America from the governor's discretionary fund as a result of the legislation his nephew, Jeremy Hutchinson, sponsored.
On Friday, the governor's office said the state ended up giving Teach for America a reduced amount of $2 million. The final of three installments was canceled, a spokesman said, after the governor's staff determined that the nonprofit failed to recruit the number of teachers it had promised.
Neither Henderson, Teach for America nor the governor have been accused of wrongdoing in the federal case. Teach for America recruits college graduates from around the U.S. to teach in low-income school districts.
In an interview Friday, Henderson said he and Cranford were introduced by a donor in 2014. Henderson said he hired Cranford, who helped Henderson build connections at the state Capitol, including with Sen. Hutchinson, who later introduced the appropriation benefiting the organization.
After the first one-year lobbying contract with Cranford expired, Henderson said, it was renewed for an additional year and then allowed to run out. During the course of their work, Henderson said he never knew that Sen. Hutchinson had contracts with Cranford, or that the lobbyist was acting unethically.
The FBI contacted Henderson on June 1, 2017, which happened to be his last day working at Teach for America, he said, leading him to originally believe the call was a prank. He said he spoke to investigators for about an hour, and again briefly in August.
"We invested a lot of time and work with Sen. Hutchinson. I really, really believed he was supporting us because he believed in our mission," Henderson said. "The idea that he may have been doing it for some other reason, it's aggravating."
Of the two bills Sen. Hutchinson sponsored in 2015, only Senate Bill 62 passed and became Act 610. It authorized the appropriation of $3 million in General Improvement Funds to go to Teach for America, though the actual expenditure was not announced until a news conference in January 2016 at which both Henderson and Gov. Hutchinson lauded the initiative. Henderson was not a gubernatorial candidate at the time.
"The announcement of the funding comes at a time when enrollment in the state's teacher-education programs -- both traditional and nontraditional -- is in decline," this newspaper reported in 2016. An additional $3 million at the time came from private donors, including Arkansas Democrat-Gazette Publisher Walter E. Hussman, Jr.
The grants were intended for hiring an additional 200 teachers throughout schools in Little Rock and in the Delta.
The deal to recruit teachers could not be met, Henderson said, when the national organization made the decision after the grants had been awarded to focus less on rural areas. He said Teach for America voluntarily declined the final $1 million payment after it was able to recruit only a little more than two-thirds of the teachers promised.
According to the criminal information attached to Cranford's guilty plea, Teach for America paid Cranford a total of $76,000 for lobbying work, starting in November 2014.
In January 2015, Cranford "forwarded the draft of the $3,000,000 grant for Entity H [Teach for America] to a representative of Entity H," the court record states.
A month later, that representative emailed Cranford to say the organization was looking to secure $3 million in private matching donations as part of an effort to "assist [Sen. Hutchinson's] ability to influence the Arkansas Governor's office by providing an incentive for the Governor to provide the entire $3 million in GIF funds," according to the record.
Henderson said he believed he was the representative referred to in the document.
The matching funds were quickly secured by a coalition of Arkansas business people who wanted to see Teach for America begin work in the Little Rock School District, Hussman said in an interview Friday. The state funds were dedicated to hiring teachers in the Delta.
"Not for the fault of Jared Henderson, but Teach for America could never live up to its commitment," Hussman said.
The publisher and businessman said that was likely the result of fewer students wanting to join the program as the economy strengthened. Like the state, the private investors ended up paying out only about two-thirds of what they had pledged, he said.
"There was a drop-off in teachers coming to Arkansas, Mississippi, places like that," Hussman said. Friday was the first time he had heard that Cranford had worked for Teach for America, he said.
In his plea agreement, Cranford admitted to bribing "Senator A" as well as several other now-former lawmakers, to "provide favorable legislative action" including steering General Improvement Fund money to Preferred Family Healthcare Inc., a charity that both Cranford and Sen. Hutchinson worked for.
The agreement states that Sen. Hutchinson received $500,000 in cash, checks, wire transfers, retainers and attorneys' fees, as well as World Series tickets in 2013. The agreement doesn't link those payments to Sen. Hutchinson's efforts on behalf of Teach for America.
Tim Dudley, Sen. Hutchinson's attorney, said Friday that the governor had not been made aware of the connections between the nonprofit, Cranford and his nephew when he approved the expenditure.
"Jeremy never talked to the governor, period, about Teach for America," Dudley said.
J.R. Davis, a spokesman for the governor, said that while the deal to direct money to Teach for America was negotiated more than two years ago, the governor recalled that his conversations were almost all with the private investors who were looked upon to raise the matching funds.
Sen. Hutchinson, who represents Senate District 33 that covers part of Pulaski and Saline counties, decided not to seek re-election. His term expires in January.
A Section on 06/09/2018