An Arkansas Board of Corrections review of procurement documents between the body and an outside legal counsel found no evidence of fraud or legal misconduct, the board member who led the investigation informed the board on Tuesday.
However, board members approved during a special meeting that a new protocol be established to avoid future incidents similar to the one that sparked the initial review.
The Arkansas Legislative Council had requested that the Legislative Joint Auditing Committee also conduct a review during a March 15 meeting at the state Capitol in Little Rock. The council had also requested that the Joint Performance Review Committee examine the functioning of the body.
Three days earlier, board Chairman Benny Magness withdrew the board's contract with attorney Abtin Mehdizadegan, a partner in the Little Rock-based law firm of Hall Booth Smith P.C., from consideration by a legislative committee. He did so after being unable to explain language added to procurement documents. At the time, he promised to authorize a board investigation into the added language and submit the documents again later.
The Arkansas Department of Corrections had asked the Legislative Council's Review Subcommittee on March 12 to ratify the board's contract with Mehdizadegan after state procurement director Ed Armstrong said ratification of the contract is required to make the contract a lawfully binding obligation on the state, because it appeared that public procurement processes were not followed.
The report presented by William "Dubs" Byers on Tuesday states that Mehdizadegan "supplied revisions to those documents consistent with the legal arguments currently pending, and he expected that any concern regarding those revisions would have been addressed by Chairman Magness, Mr. Brown or his staff, or the [Office of State Procurement]. I found no evidence of fraud or legal misconduct in this matter."
Mehdizadegan has said he submitted the documents March 6 to the state Department of Corrections with "quick revisions" and made reasonable changes to the contract and no one objected to the changes.
According to Byers, the changes included Mehdizadegan adding the phrase "if applicable" to four areas of the documents.
Byers told the board he didn't believe the people involved in the process did anything unethical or illegal. He said Mehdizadegan's changes "were made in his mind in good faith. He was trying to protect the people he was representing, which is the Board of Corrections."
While Byers said he didn't fault Mehdizadegan, he wished the attorney had more obviously flagged the changes for others to see.
"It's my opinion that all this was just done too hurriedly," Byers said.
In order to avoid repeating the issue in the future, Byers recommended that the Board of Corrections "establish a protocol for the development of and submission of procurement documents. This would include a review by staff attorneys and at least a 24-hour waiting time between the time documents are completed and the submission to the [Office of State Procurement]."
He also recommended that the board hold off on resubmitting the procurement documents until the issues are resolved.
At stake, however, is the board's ability to pay Mehdizadegan, Byers said in an interview after the meeting. In addition to going through the procurement process, the body can continue through current litigation until a judge orders payment to Mehdizadegan or seek to pay the attorney by going through the state Claims Commission, according to the board member.
Mehdizadegan's contract started Dec. 8 and will continue until Dec. 7, 2024, with a total project amount of $207,000 under its terms. The board had incurred $139,639 in legal fees with the legal counsel in December, January and February, Chad Brown, the department's chief financial officer, testified before the subcommittee on March 12.
During that subcommittee meeting, House Speaker Matthew Shepherd, R-El Dorado, and Sen. Jonathan Dismang, R-Searcy, said they objected to the language added to the documents.
Among other things, they cited language in the document that reads: "Nothing in this Contract shall be construed as a waiver of the State's sovereign immunity, if applicable. Any claims Contractor wishes to assert against the State in Connection with this Contract shall be brought in the Arkansas State Claims Commission, if applicable."
Dismang has said the subcommittee was being asked to blindly ratify the contract that was resubmitted several days earlier.
Byers said that, while some lawmakers have referred to the documents as the contract, the Board of Corrections signed the contract in December. After the body voted to hire him Dec. 8, Mehdizadegan signed a supplemental agreement Dec. 23.
Magness has said the Board of Corrections plans to present the investigation's findings to lawmakers once the investigation was complete and the board has had an opportunity to meet to review the findings.
Mehdizadegan was hired by the Board of Corrections less than a week before he filed a lawsuit on their behalf challenging two laws passed in last year's legislative session that the board says weakened its authority in violation of Amendment 33 to the state constitution.
Arkansas Attorney General Tim Griffin later filed suit against the board saying it violated the Arkansas Freedom of Information Act when it went into executive session to hire Mehdizadegan.
Griffin has appealed rulings in the lawsuits to the Arkansas Supreme Court.
One appeal is related to a Jan. 19 ruling by Pulaski County Circuit Judge Patricia James that, in part, levied a preliminary injunction against two laws that the board's suit contends violate the state constitution. Gov. Sarah Huckabee Sanders is one of the defendants in that case.
The other concerns a Jan. 22 order from Pulaski County Circuit Judge Tim Fox dismissing Griffin's suit against the board.
Information for this article was contributed by Michael R. Wickline and Grant Lancaster of the Arkansas Democrat-Gazette.
CORRECTION: The Arkansas Legislative Council requested that the Legislative Joint Auditing Committee conduct a review of a contract between the state Board of Corrections and an outside legal counsel. An earlier version of this story incorrectly stated who was the subject of the request.