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story.lead_photo.caption In this January 2017 file photo, Arkansas House Speaker Jeremy Gillam, R-Judsonia attends a legislative committee meeting. (AP Photo/Brian Chilson, File)

House Revenue and Taxation Committee Chairman Joe Jett lent $16,000 to then-House Speaker Jeremy Gillam in the fall of 2016 to help Gillam's financially struggling berry farm, both said recently when asked by a reporter.

Gillam, of Judsonia, said he hopes to pay back the loan by the end of this year. Gillam resigned from the state House of Representatives in June to become the University of Central Arkansas' director of governmental affairs and external relations.

The loan was made before Jett switched from the Democratic Party to the Republican Party in December 2016 and before Gillam reappointed Jett as chairman of the House's taxation committee in January 2017. Jett lives in Success in Clay County in northeast Arkansas.

Senate President Pro Tempore-elect Jim Hendren, R-Sulphur Springs, said he suspects that other state lawmakers have loaned one another money over the years.

He said he advanced what he believes was roughly $4,000 to then-Senate Revenue and Taxation Committee Chairman Jake Files, R-Fort Smith, to help Files cover some checks. Hendren was Senate majority leader at the time. Hendren said he recently wrote off the loan as a gift.

In June, Files was sentenced to 18 months in federal prison and ordered to pay restitution for offenses that included obtaining state money for a ball field project but instead using it for his own purposes. The former senator pleaded guilty to wire fraud, bank fraud and money laundering charges in January.

On Friday, Gillam filed amendments to his Statement of Financial Interest for 2016 and 2017 to disclose Jett as a creditor to whom at least $5,000 was personally owed and obligated and is still outstanding. The Statement of Financial Interest is the annual personal financial disclosure report filed by elected officials with the secretary of state's office.

Gillam amended his reports after consulting Arkansas Ethics Commission Director Graham Sloan last week.

Gillam initially told a reporter that he believed that state law didn't require him to disclose what he described as a farm-to-farm business transaction. Then he was informed by the Arkansas Democrat-Gazette that Sloan suggested that the loan should be disclosed under state law.

"Let's disclose it. No big deal," Gillam said.

DISCLOSURE RULES

The instructions for the Statement of Financial Interest show that disclosure is required of "[d]ebts not incurred in the ordinary course of business [that] include, but are not limited to, such items as ... money borrowed from individuals, other than family members, who are not normally in the business of lending money."

The Statement of Financial Interest form states that debts of at least $5,000 are required to be disclosed, Sloan said Thursday in an email to this newspaper.

Gillam also filed an amendment to his report for 2015 to disclose that then-state Reps. David Branscum, R-Marshall; Bill Gossage, R-Ozark; and Rep. Jon Eubanks, R-Paris, wrote him checks for $700 each in December 2015. That was after this newspaper reported that Gillam Farms had state tax liens filed against it for more than $2,000. Gillam was vice president of Gillam Farms.

Gillam said he had forgotten about receiving those checks, which were designed to help the farm pay its delinquent taxes. He said Branscum reminded him when Gillam was trying to figure out what else he needed to disclose on his updated Statements of Financial Interest.

Branscum, who is now the U.S. Department of Agriculture's rural development director in Arkansas, recalled that Gillam initially declined Branscum's offer to give Gillam $2,100 in December 2015. Gillam later agreed to accept that money after Branscum, Gossage and Eubanks said they would give $700 each.

Gossage, who is now Gov. Asa Hutchinson's deputy chief of staff for external operations, confirmed through Hutchinson spokesman J.R. Davis that he wrote a $700 check to Gillam.

Eubanks acknowledged that he also wrote a $700 check to Gillam, adding, "I have done it for people at home in a bind."

POSSIBLE CHANGE

House Speaker Matt Shepherd, R-El Dorado, said Jett informed him about the loan to Gillam after this newspaper contacted Jett.

That's the only loan between representatives that he is aware of, Shepherd said.

"I have no reason to believe what they did was wrong," he said, referring to the loan.

But Shepherd said he has asked the legislative staff to "bring to me either legislation or possibly a rule to prohibit loans among legislators.

"I have got to give it some further thought whether it be just an outright ban, whether there is some threshold, some maximum amount, but that's something that I'm certainly looking at, and I don't think that going forward that we should have loans among members for significant amounts of money," Shepherd said. Gillam appointed Shepherd as chairman of the House Judiciary Committee in 2015 and 2017.

Hendren said he plans to ask the Senate ethics committee to study loans between lawmakers.

"Sometimes there is a gray area between loans and gifts and what deals are between people who have known each other for years," he said.

Nicholas Birdsong, a policy associate at the National Conference of State Legislatures' Center for Ethics in Government, said he's not aware of any specific state rule or statute relating to loans among legislators in states across the nation.

"There very well could be, but I haven't come across anything specific to it," he said in an email to this newspaper. "There are several states that have legislative ethics statutes discussing loans generally, which might apply to some loans between legislators.

"Under some circumstances and in some states, loans given and received may need to be disclosed under financial disclosure requirements," Birdsong said.

"Loans may be included in the definition of a gift, particularly for unsecured loans not made through the ordinary course of business or with terms more favorable than those generally available to the public," he said.

JETT'S LOAN

Jett said he agreed to provide the loan of $16,000 to Gillam after a handful of people went out to dinner with Gillam. Jett said he told Gillam that he would be more than willing to assist Gillam if Gillam needed financial help.

He said Gillam eventually called him and asked for assistance.

"I would do the same thing for a friend in need," Jett said in an interview. "It was outside our legislative duties.

""I knew there was nothing nefarious going on, and there was no pro quid quo," he said, referring to Gillam's reappointment of Jett as House Revenue and Taxation Committee chairman.

"I never gave it a second thought," Jett said. He said his family farms about 8,000 acres and grows soybeans and rice.

Gillam said the loan had nothing to do with him reappointing Jett as committee chairman.

"By far, on the feedback I had gotten in '15 and '16, from all the members as far as who was a great chair, who had done a good job and everything, Joe had gotten the highest marks and feedback from the membership as far as what a great job he had done and everything," he said. "I had Republicans and Democrats all saying, 'He's your chair.'"

Gillam said he used the money to pay farm-related expenses.

"That was in the fall of 2016, and I had my stroke so I had been out of commission a little bit with helping my brother and that kind of stuff," he said.

Gillam said the loan didn't have an agreed-upon interest rate and was based on a handshake.

"I plan on trying to put interest on that, but there was not a set thing," he said.

Gillam said he's hoping to repay the loan by the end of this year "just because we are trying to sell all the tractors and everything and get everything liquidated."

He has said he and his brother sold their 450-acre berry farm in White County in May. Ritter Crop Services of Jonesboro bought the farm for $1,364,925, according to the White County assessor's office.

Gillam makes $130,000 a year working for UCA.

The speaker and the president pro tempore now earn $47,277 a year; other legislators make $41,393 a year. All lawmakers also may get paid per diem and mileage for attending legislative meetings.

HENDREN'S LOAN

Hendren, who is president of Hendren Plastics Inc., said he believes the loan to Files was made during the 2015 regular legislative session.

"Back in the session, I was made aware of the fact that he had some checks that had been returned and was in a real financial bind because of some vendors not paying him," Hendren said.

"He needed a way to clear that until he could collect from his vendors, and the request was made to me through another legislator that if I could help him on a short-term basis, so that he could cover those checks and not have a big news story about checks being returned, and I agreed to do that," Hendren said.

Sen. Bart Hester, R-Cave Springs, said he approached Hendren about assisting Files.

"I don't remember the exact amount because I would have to go and check, but I think it was about $4,000 that I advanced him," Hendren said. "It became apparent shortly thereafter that he was in a lot worse financial trouble than what I had been made aware of and he wasn't going to be able to repay it, so recently I just wrote it off as a gift."

Hendren said he's not mad about having to write off the loan to Files.

"Anytime I loan money to friends, I always do it with the expectation that you may not get paid back, and, if you can't do that, you shouldn't loan money to friends," Hendren said.

Federal investigations in the past two years have led to five former lawmakers being convicted or pleading guilty to federal charges. Besides Files, they are former Sen. Jon Woods, R-Springdale; Rep. Micah Neal, R-Springdale; Rep. Hank Wilkins, D-Pine Bluff; and Rep. Eddie Cooper, D-Melbourne. Woods, Neal, Wilkins and Cooper were convicted in a public corruption case.

Former state Sen. Jeremy Hutchinson, R-Little Rock, was indicted last month on federal wire fraud and tax charges to which he pleaded innocent Tuesday. Republican Gov. Asa Hutchinson is the uncle of Hendren and Jeremy Hutchinson.

In addition, Rep. Mickey Gates, R-Hot Springs, faces state criminal charges accusing him of not paying income taxes or filing tax returns.

SundayMonday on 09/23/2018

Print Headline: Legislators report loans among peers

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Comments

  • dearlo
    September 23, 2018 at 6:45 a.m.

    Gillum Farm, lol now I know why his son never got back to me with that promised of grape vines. Seems he was to busy covering hr and his famlies rear in's and scrambling to get some money to save the farm or stay out of prison. I suppose none of them will pay it back nor serve a day in jail. They want even have to post bond and the rest of the story will never be told. Oh joy life is good in Arkansas where to good old boys still run or ruin our state. Vote all of them out in November, we plan to just say no.

  • JMort69
    September 23, 2018 at 8:40 a.m.

    Clearly, our state house is inundated with failed business people. Is anyone there financially solvent? And, why, out of the 135 legislators, do the same names just keep coming up over and over again in these shady dealings? Perhaps because these are the shadiest dealers in the group. The disclosure language above is written in clear English. But yet, Gillam, who now works as a lobbyist for a college, couldn't read and understand it. The former speaker, somehow, didn't think the rules he was sworn to uphold applied to him. Apparently, none of the self-imposed "rules" apply to any legislator. That's why Hendren and his minions coming up with yet another set of "rules" is such a joke. Somehow, the new rules are going to make the crooks behave. Yeah, and I've got some swampland in Florida to sell. For those of you who vote strictly because you have pledged your allegiance to a political party, you had better wake up. Neither party in Arkansas is innocent in these crimes and it is we the people who have paid the price. There is a greater, overarching issue than a trite political party here. That is, do you care about our state? Do you care about your fellow taxpayers? Do you care about the lack of integrity we find throughout our current state government? Most importantly, do you want these crimes and criminals to remain in charge going forward? If not, it is time for you to throw off your cloak of partisanship and do what is right for our state and for her people. VOTE THEM OUT, VOTE THEM OUT!!

  • ChenalMe
    September 23, 2018 at 8:53 a.m.

    The swamp rats continue to be exposed. Excellent job, Dem-Gaz! Please keep up the the great work.

  • Skeptic1
    September 23, 2018 at 10:32 a.m.

    So one person loaned money to another to help his failing business? OK, unless it was campaign finance money or money from the state's coffer how is this a crime? Most people don't know that legislatures make very little for the time spent doing that job, many, if not most, have lucrative private employment or businesses otherwise they could not afford the position. People have become lazy and too eager to jump into the mob rather than engage in critical thinking.

  • Goad
    September 23, 2018 at 10:47 a.m.

    I don’t see what Gilliam did was wrong.

  • JA40
    September 23, 2018 at 11:05 a.m.

    This smells awful, but the legislators see nothing wrong. If you can't keep your own house clean, how can you keep Arkansas clean?? They should know the rules BEFORE taking office. Wonder how long they'd last in banking??

  • JMort69
    September 23, 2018 at 12:15 p.m.

    I have owned successful,small businesses for 46 years. Never once have I gone to any individual, even my parents, to get a loan. That is why banks exist. So, why didn't these legislators go to banks? Perhaps because, in Gillam's case, banks wouldn't loan him money due to tax liens. Perhaps in Files case, banks wouldn't lend him money because his accounts were overdrawn and they had doubts about his business practices. Hutchinson was broke, Woods was broke, others involved in the fraudulent schemes against us, such as Shelton were broke, Paris's college was broke and in arrears on their bank loans. And, some of you see nothing wrong with Gillam not disclosing he had gotten this loan, when the rules they set for themselves clearly say they should. Here's what I know from experience, if you can't get a bank to loan you money, your business is in trouble. When you are desperate for money, you are easy pickins for corrupt people. That is not the type person I want in charge of billions of my tax dollars. And, as for the rest of the legislature, I feel sure they all knew each other's situation, some have admitted publicly that they did, and yet, nothing was said. I contend we need a fresh start. Term limits will help with that, but as for the rest, VOTE THEM OUT, VOTE THEM OUT!!

  • JMort69
    September 23, 2018 at 12:59 p.m.

    Oh, I left off a couple. Mickey Gates, who didn't find it necessary to pay taxes on his business, for years. And then we have failed attorneys Bob Ballinger and Michael Lamoureux, both in really tight with our governor. Somehow, all of the aforementioned people thought they were above the law and the rules. As did Rev. Wilkins, who, I guess wasn't broke because of all the bribes he had funneled through his church for his personal use. Absolutely despicable! I fully expect this list to grow before the feds are done, but that may not be before the election. So, it's up to us Arkansas.

  • LR1955
    September 23, 2018 at 3:01 p.m.

    Vote the Incumbents OUT!
    voterparticipation dot org

  • BoudinMan
    September 23, 2018 at 4:03 p.m.

    Good points, JMORT. That brings to mind: you know who else could no longer go to the banks for business loans? trump. Wonder where he started getting cash? oh, that's right. Jr. told us. Putin.

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