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Outbound state Sen. Jake Files of Fort Smith pleaded guilty to wire and bank fraud last week, along with money laundering charges.

His well-reported scheme involved Files helping secure a state GIF grant to build a badly needed softball park complex in Fort Smith. In essence, he falsified an application with rigged bids, received the grant, kept a nice chunk in cash for himself, and never did the work.

While that case is resolved, and the effective date for Files' resignation from his District 8 seat looms, I find myself remembering the $80,000 he received in November 2014 from a major state nursing home executive after Files supported proposed constitutional amendment SJR 1. That change would have capped potential losses in nursing home medical injury cases.

Although that bad idea thankfully died in committee, it has been resurrected, with Files reported as a co-sponsor, as the expanded sequel amendment called SJR8 that Arkansas voters will decide in November. I like to call it the "price on life amendment" since, in addition to nursing home injuries, this version would financially cap awards in other civil cases involving wrongful death, quadriplegia and brain damage at $500,000.

Files' leadership role in pushing the latest amendment leaves me wondering why his FFH Construction received the previously reported (yet still mysterious) $80,000 wire transfer that David Norsworthy deposited into his First National Bank account only a week after the unsuccessful SJR1 amendment was introduced in 2014.

Norsworthy's deposit reportedly surfaced during the discovery process in a Fort Smith civil suit. The downfall of SJR 1 also marked the beginning of the relentless offensive by certain groups to seek "tort reform" that could potentially benefit the industry's pocketbook in civil cases when residents die or are injured.

As Files' actions came under increasing public scrutiny last year, reporter John Lovett of the Southwest Times Record of Fort Smith did some admirable reporting into the Norsworthy deposit, but was stonewalled for answers by Files and Norsworthy.

So now, as mentioned above, in light of Files' admitting criminal guilt in both fraud and money laundering in another matter, I'm naturally wondering why a career state nursing home executive would send Files' construction company $80,000 only a week after the senator was key in pushing legislation to benefit that industry.

Did Files' company add a major addition to the Norsworthy home? A new olympic pool? A heated and cooled three-car garage?

Lovett was curious in his May 5, 2017, story when he followed the money. I believe what Lovett revealed in his story eight months ago warrants rehashing because of Files' guilty plea last week.

Here is a portion of what Lovett reported that, for me and in many ways, becomes even more pertinent today.

"When asked about the financial document showing the $80,000 wire transfer, Files emailed a protective order. However, the order states 'any documents that have been or may be designated as 'confidential' shall be so designated by stamping the documents with the label 'confidential' in a manner that does not interfere with the legibility of the document ...' The document has no signs of being stamped 'confidential.'"

"Norsworthy did not respond to calls ... . Files would not go on the record with a response, and simply provided the protective order ... . The protective order was issued about one month before Files received a $30,000 loan from lobbyist Bruce Hawkins. The loan surfaced in October 2015. It was not illegal at that time, though, for a legislator to receive a loan from a lobbyist. But Act 1108, which passed in April of this year, made it against the law."

Lovett's story continued: "Norsworthy is part-owner in over a dozen nursing homes in Arkansas with Michael Morton, a Fort Smith businessman with ties to former central Arkansas circuit judge Michael Maggio. Maggio had reduced a judgment against Greenbrier Nursing and Rehabilitation Center from $5.2 million to $1 million after its owner, Morton, donated about $24,000 to Maggio's campaign. Morton was not charged with a crime. Maggio was sentenced to 10 years in prison March 2016, the maximum possible sentence for reducing a jury award in exchange for a bribe."

So there you have it, valued readers. What say we file this lingering question as the Eighty Grand Enigma? And who knows if the feds have any interest in asking some questions of their own about the transaction? Considering developments in the Legislature since 2014, I'd say they could be justified in taking a peek.

My larger view, especially of late: While it's always good to be the king, it can be equally rewarding for elected public servants we Arkansans too often blindly trust to lead us honorably and with our overall best (as opposed to special) interests at heart.

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Mike Masterson is a longtime Arkansas journalist. Email him at mmasterson@arkansasonline.com.

Editorial on 02/04/2018

Print Headline: Under scrutiny

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Comments

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  • BoudinMan
    February 4, 2018 at 8:12 a.m.

    Good job, Mike. It's good to expose these pay-for-benefits schemes that companies and politicians engage in. They need to be brought out into the sunlight. Now if you, or someone else at the ADG, could only shine a light on the $500,000 supposedly given to Paul Ryan by the Koch bros. a week after the tax scam bill passed the House, I think we'd be better off for it.

  • Knuckleball1
    February 4, 2018 at 12:37 p.m.

    Mike, this is just the tip of the iceberg, if the Feds dug a little deeper there is not much telling what they may find.

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