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| WILL ARKANSAS STATE TREASURER DENNIS MILLIGAN HAVE TO RESORT TO PANHANDLING? |
Lawmakers Wednesday declined to review a request
to allow more state money to be spent on $170,000 worth of outstanding legal
fees incurred by Arkansas Treasurer Dennis Milligan's office.
Senate President Pro Tempore Jonathan Dismang, R-Searcy,
said Milligan's office should have gone to legislative leaders months ago to
discuss a legal bill that in total tops $330,000, related to lawsuits filed by
a former employee.
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| JONATHAN DISMANG |
Officials from the treasurer's office had asked lawmakers to
approve shifting $205,000 within the treasurer's budget to pay off the $170,000
in outstanding legal fees -- which the office does not have the spending
authority to pay -- and to pay outside legal counsel to help implement
legislation approved earlier this year on how the office invests money.
The legal bills from the Mitchell Williams law firm are the
result of litigation filed in federal and state courts by the treasurer's
former outreach manager, David Singer. Arkansas Attorney General Leslie
Rutledge's office, which serves as general counsel for state offices and
officials, had a conflict of interest and declined to defend Milligan's
office.
"I feel like I'm missing something because you've
incurred debt to a law firm that you didn't have the money to pay, and now
you're coming before us and asking to pay the bill," Dismang said during
the Arkansas Legislative Council's Performance Evaluation and Expenditure
Review Subcommittee meeting Wednesday.
Sen. Bruce Maloch, D-Magnolia, a co-chairman of the
subcommittee, raised similar concerns.
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| BRUCE MALCOH |
"Our issue is the fact that when you know you're
getting close to running out of money, you come and get appropriation before
you spend the money," he said. "You put yourselves in a legal limbo
of spending money without appropriation. You put the Legislature in a
bind."
Rep. DeAnn Vaught, R-Horatio, asked whether it would be a
better use of taxpayer funds to settle the case or to use in-house legal
counsel.
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| DEANN VAUGHT |
In response, Chief Deputy Treasurer Jason Brady said he had
known since January that a retrial was coming up that would increase legal
fees. Because of the legislative session going on earlier this year, Brady
said, Wednesday's subcommittee meeting was the first available time to handle
the request.
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| JASON BRADY - CHIEF DEPUTY TREASURER |
Brady said he did not speak to legislative leaders about the
mounting legal fees. He apologized to lawmakers and said he took responsibility
for not doing so.
In response to a question from Rep. Kim Hammer, R-Benton,
about whether the office was trying to hide something, Chief Deputy Treasurer
Grant Wallace said: "There was no attempt to hide these charges. You're in
the midst of a legal battle and you're doing what you can to protect the
interest of the state at that time."
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| KIM HAMMER |
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| GRANT WALLACE - ANOTHER CHIEF DEPUTY TREASURER |
Brady said the office received an offer to settle the case
for $1 million, but he did not believe that amount would cost taxpayers less
than going to court.
He also pointed out that Milligan had prevailed in federal
court, though a state case is ongoing. A jury trial is scheduled for July 12.
T.J. Fowler, chief legal counsel for the treasurer's office,
added that the ongoing litigation is too complex for one person to handle.
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| T.J. FOWLER - TREASURER'S OFFICE CHIEF LEGAL COUNSEL |
The treasurer's office request was initially approved in a
voice vote, but after several lawmakers asked for a roll call, that vote was
overturned.
During the roll call, five members of the subcommittee voted
in favor of review. Maloch said 14 of the 20 members were present and that a
majority was needed for review.
Sen. Jason Rapert, R-Bigelow, who voted to approve the
request, was the sole lawmaker to defend the office Wednesday.
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| JASON RAPERT |
"I doubt the treasurer at all enjoyed being sued,"
he said. "We cannot control, any of us, the fact that somebody sued you,especially frivolously sued you, and you did your part to defend
yourself."
Singer filed a complaint that the treasurer violated the
state's whistleblower law when he fired Singer in April 2015.
In the original state lawsuit filed against Milligan and his
then-chief of staff, Jim Harris, in September 2015, Singer's attorney said
Singer had complained about "using public funds to engage in political
activities and harassment," although the complaint offered no details.
An updated complaint also alleges that Milligan illegally
transferred funds within his office to pay a Washington, D.C., company for a
program offering financial literacy instruction to elementary school students.
The federal lawsuit ended in February when a jury cleared
Milligan of a discrimination claim and Harris of a defamation claim.
Singer alleged that Harris defamed him by writing in an
interoffice memo to the deputy chief of staff that Singer had "mental
problems." Singer also alleged that Milligan fired him because the
treasurer believed, based on viewing the memo, that Singer suffered from a
mental disability.
Singer contended his firing violated the Americans with
Disabilities Act, which prohibits terminating someone on the basis of a
disability, real or perceived.
Wednesday's meeting was the second time the treasurer's
office has asked to shift funds to pay for the lawsuits. In March 2016, the
Arkansas Legislative Council voted to shift $50,000 to cover the office's legal
fees.
At the time, Wallace said the treasurer's office had paid
$36,229.16 in legal fees to the Mitchell Williams firm, but the office had
enough spending authority remaining to pay $10,000.
He said half of the $50,000 shift would be used to hire a
bond attorney.
State records show that the treasurer's office paid the Rose
Law Firm, which was hired as the bond attorney, $20,063 in fiscal 2016 and $7,080
in fiscal 2017. It paid Mitchell Williams, which represented the office in
the state and federal lawsuits, $60,256 in fiscal 2016 and $83,653 in fiscal
2017.
After Wednesday's meeting, Dismang said he expected the
treasurer's office to return to the subcommittee with more information about
the request.
"I expect that they will try to bring it back up, but I
don't know what their timeline is for doing that," Dismang said.
"They were obviously OK with not having paid their bills and Mitchell
Williams was OK not being paid, knowing that the funds were not sitting there
for their legal fees."
Stacy Peterson, a spokesman for the treasurer, said the
office was still formulating its next steps but that it expected to go back
before lawmakers at a future date.
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| STACY PETERSON - MOUTHPIECE FOR TREASURER'S OFFICE |
If the money isn't appropriated, she said, the law firm
could go to the state Claims Commission, which adjudicates claims against the
state.
"We don't really feel like that's necessary when the
money's there," Peterson said. "We have the money. It's just not in
the right line item so we can spend it."
Maybe Milligan can use some of those coins he purchased with public funds (to use while campaigning) to pay down his mounting debt.
