The Truth In Arkansas Politics

Beebe's Office Talked About Changing Constitution...

Mike Beebe's office has assured us that our private property rights are okay and that no court could change the law or constitution to allow private property to be taken for private use Therefore, he doesn't believe we need any additional legislation to protect our property rights.

Well, we just don't know that we believe that one, and neither does his office apparently...

The Constitution in Arkansas requires a "general, suitable and efficient" education system in the state. Well Mike Beebe's top assistant, Tim Gauger suggested in private emails that a Supreme Court decision in favor of school districts now challenging the adequacy of education funding this year would trigger initiatives to strip the guarantee of a "general, suitable and efficient" education from the state constitution.

Beebe said Gauger's remarks, though blunt, generally echoed what his office discussed in court pleadings. The comments were consistent with his office's argument that the Supreme Court usurped the Legislature's authority by reopening the case, he added

So Mike Beebe's office discussed the possibility of changing the Arkansas Constitution based on a single court case. Okay, and why are we to believe that this could not happen with any activist judge's decision on the TIF law?

Again, we just don't know what to believe with Mike Beebe...

We here at the Truth Blog have decided to periodically update our readers on the hypocrisy of Mike Beebe. With "Flip-Flop John Kerry's" Presidential Campaign advisor Greg Hale now advising Mike Beebe, we believe we will see many more Kerry-like flip-flops from Mr. Beebe.

On July 20, 2005 the Morning News reported that: " a report on allegations of misconduct against retiring Police Chief Sid Rieff does not have to be released to the public, the state attorney general's office said Tuesday."

http://www.nwaonline.net/articles/2005/07/20/front/02szagopinion.txt

"The investigation came after an anonymous e-mail alleged Rieff had not supported departmental supervisors, officers in the military, members of minorities and injured policemen. It alleged that Rieff initiated shouting matches, used racial slurs and was a member of a racist organization."

"The investigation was made after the council approved spending up to $10,000 for the investigation. The firm's bill came in at $15,720.38."

Well, this is completely opposite of what Mike Beebe said on May 30, 2003. In response to a request for an opinion on alleged misconduct in Paragould, Mike Beebe said, "I believe the public has a strong interest in knowing both the nature of the alleged misconduct by so highly placed an official and the nature of the response thereto by the PHA board."

http://jbs.mynewroads.com/archivedstory.asp?ID=4800

Mike Beebe needs to be consistent. You can't have it both ways when its convenient for your campaign. The Truth must ask, what is Mike Beebe hiding and who is he covering for?

State Democratic Party mum on loan strategy

Truth Blog: What kind of political strategy is this Willett? Sounds like the kind of strategy when you spend too much money and you can't pay all the bills strategy. How many more loans are you guys going to take? It seems like yesterday you were bragging about all that money you boys raised and now it looks like we are getting desperate doesn't it? Maybe if you guys quit charging meals at Hooters you wouldn't have this problem... Flashback to 2005 when the Dem party borrowed another $100,000: "Willett said the line of credit was opened so that he could begin spending money on the party, and not have to wait until the spring of next year, about one month before the primary election. 'The whole strategy is just to get the money earlier,' Willett said." Well Jason spring has come and gone and you guys spent all the money in like three months. Is this the same strategy as get the money earlier plan? How are you guys going to pay this one off next spring? You can always call on Howard Dean or maybe you have tried that already and he has not been willing... Anyway this is going to be interesting to watch...

The state Democratic Party took out a $100,000 loan in May, a month after it paid off almost all of its $150,000 debt from last year, the party’s campaign finance reports show, and its chairman isn’t saying much about its latest debt.

“We are going to have the resources to win in November,” state Democratic Party Chairman Jason Willett of Jonesboro said. “But we are not going to comment on internal strategy.”

The party also reported that it has received more than $830,000 and spent almost that much this year.

The Republican Party has reported raising much less money but has more cash on hand than the Democrats.

Clint Reed of Little Rock, executive director of the state Republican Party, said the Democrats’ new debt shows that “Wild Pitch Willett knows it’s going to take a lot of money to sell his liberal ticket to the people of Arkansas.”

Reed said he’s calling Willett that name because Willett’s prone to issuing “cartoonishlike slogans... and shallow explanations without substance.”

Willett, a former district director for U.S. Rep. Marion Berry, replied, “This is the kind of trash talk you’d expect from somebody supporting a Washington lobbyist for governor.”

Former Homeland Security Undersecretary and 3rd District Congressman Asa Hutchinson of Little Rock is the Republican nominee for governor. He’s said he’s no longer a lobbyist.

Attorney General Mike Beebe of Searcy, a former state senator, is the Democratic nominee for governor.

Two months ago Willett said the party paid off its $150,000 revolving line of credit with First National Bank of Jonesboro after collecting roughly $750,000 in filing fees from candidates for federal and state offices. At that time, he said that line of credit might be tapped again.

The filing fees raised this year helped pay Democratic expenses, which include paying off last year’s loan, contributing to the coordinated campaign to help all party candidates, and contributing $2,500 to Democratic candidates unopposed in the primary but facing Republican opponents in the general election, said Democratic spokesman Bart Haynie.

Willett has repeatedly described the debt incurred last year as an investment to help the party regain the governor’s office this year. Republican Mike Huckabee has been governor since 1996.

Among other things, Willett has said the party has opened a Northwest Arkansas office, added employees and paid competitive salaries so the party doesn’t have constant turnover.

According to a report filed Tuesday with the Federal Election Commission, the Democratic Party of Arkansas took out a $100,000 loan from First National Bank of Jonesboro with an interest rate of 6.5 percent May 23.

The party owes $5 on a $150,000 loan that it took out from the same bank with an interest rate of 4 percent May 3 of last year, the report said.

For the first five months of this year, the state Democratic Party reported receipts of $833,884 and disbursements of $803,180. Cash on hand amounted to $39,256 at the end of May.

In contrast, the state Republican Party reported receipts of $368,734 and disbursements of $353,665 through the end of May. Cash on hand came to $107,394 at the end of May.

The GOP reported debts and obligations of $38,868 at the end of May.

Reed said these debts already have been paid, but the party has to amend numerous previous reports to reflect that.

A year ago, former state Democratic Party Chairman Ron Oliver of North Little Rock, whom Willett ousted in February 2005, said the party’s going $50,000 into debt through May 2005 meant that the party was in serious financial trouble.

At that time, Willett called Oliver’s observation sour grapes. (BY MICHAEL R. WICKLINE ARKANSAS DEMOCRAT-GAZETTE)

I don’t know if anyone read a story in the DemGaz (SEE BELOW) on May 30^th that talked about a tax-exempt Arkansas health-care organization under scrutiny by the U.S. Senate Finance Committee, but the we decided to do further investigations. The Truth ran a check of Mike Beebe’s contribution reports because we all know how he likes to receive unethical contributions. Low and behold what do you think we found? Mike Beebe received a $250 contribution from Michael Moody the Chief Medical Officer of Arkansas Foundation for Medical Care. Mike Beebe continues to accept contributions from entities that he regulates, entities that have their ethics in question (like Mr. Beebe), special interests and convicted felons. Mike Beebe seems to think that this behavior is quite alright for an individual running for Arkansas’ highest office. Mike Beebe continues to show a disregard for ethics, a disregard for honesty and a disregard for the average Arkansan. We encourage you to contact Mike and tell him you are tired of his special interest dealings, his disregard for ethics and his Hollywood elite pandering. Mike if you truly “Believed in Arkansas” you would stop all of this unethical behavior…

Here are the specifics from the article: “A tax-exempt Arkansas health-care organization under scrutiny by the U.S. Senate Finance Committee paid for Little Rock apartments and cars for its top executives, held board retreats in Lake Tahoe, Nev., and Half Moon Bay, Calif., and awarded a $16,500-pe-rmonth contract to a business owned by an officer's wife and daughter.

These and other spending practices of the nonprofit Arkansas Foundation for Medical Care were detailed in its response to questions from Finance Committee leaders Sen. Charles Grassley, R-Iowa, and Sen. Max Baucus, D-Mont.

The committee is examining the finances and effectiveness of the foundation along with those of more than 50 similar agencies around the country, known as quality improvement organizations. The foundation released to the Arkansas Democrat-Gazette its nine-page response, along with more than 600 pages of supporting documents.

A spokesman for the Senate Finance Committee declined to discuss details about its inquiry into the Arkansas Foundation for Medical Care.

However, Grassley and Baucus have written that they are investigating the "financial improprieties by the [quality improvement organizations], including but not limited to, questionable travel and conference expenses, possible mis- use of rental property, and loans executed to subsidiaries." Their findings could result in legislative or regulatory changes for the organizations, a spokesman said.

Officials with the Arkansas Foundation for Medical Care declined to discuss the Finance Committee's inquiries. Spokesman Nikki Thornton said the organization doesn't want to "pre-empt" an interview the committee has requested with the organization's chief financial officer.

In an April 4 letter to the foundation, the Finance Committee requested information regarding the use of corporate apartments and business contracts with foundation employees' family members.

The foundation, which had an $18 million budget in 2004, contracts with Medicare and Medicaid to examine the state's health-care services and make recommendations.

It is one of the nation's 53 quality improvement organizations, which collectively receive about $367 million in federal funds annually to handle complaints about treatment paid for by Medicare and to review Medicare payment errors. Arkansas' Medicaid program also pays the organization about $12 million annually to determine the medical necessity of some services billed to Medicaid and perform retrospective reviews of other services.

APARTMENTS AND CARS

The documents sent to the Finance Committee outlined and defended the foundation's spending on items such as housing and vehicles for employees.

The foundation, located in Fort Smith and Little Rock, has paid for three Little Rock apartments for top officers, according to the documents. The properties include a $995 a month 1,060-square-foot Riverfront Drive apartment for chief medical officer Dr. Michael Moody and a $470 a month 556-square foot west Little Rock apartment used by Chief Operating Officer Gary O'Neal in 2002.

In response to a committee question, the foundation acknowledged that "[f]rom time to time," family and friends stayed in the apartments, including times when family members of unidentified executives stayed on "an extended basis." On those occasions, according to the response, the executive paid "at least 40 percent" of the lease.

The foundation's response said the apartments were an economical way for the executives to do business in Little Rock, where they spent, on average, three days per week. Using the apartments saved $5,000 to $10,000 annually, according to the foundation's analysis. The response did not indicate why the executives weren't required to move to Little Rock.

A 2003 audit of the foundation noted that the apartment leases were "expressly unallowable," particularly the $11,380 paid in 2002 for Moody, whose wife and daughter were listed on the lease.

The audit, conducted by the U.S. Defense Contract Audit Agency, which audits contracts for some governmental agencies, also took exception to $15,241 paid for car leases - a 2000 Toyota for Chief Executive Russell Brasher and a 2002 Cadillac for Moody. Attempts to reach Moody and Brasher for comment were unsuccessful.

"Because AFMC does not identify and segregate personal and business travel mileage, we have no way to substantiate and measure business use," the audit said.

The cars and apartments were in addition to salaries.

An audit the following year noted that Moody was paid $206,298 for 60 percent of his time. That's significantly higher than the $182,457 paid by a similarly sized quality improvement organization for a full-time position, according to the audit. Auditors also questioned a $22,539 bonus Brasher received in 2004. His total compensation that year topped $285,000, not including benefits.

FAMILY BUSINESS

The Senate Finance Committee also asked about the foundation's relationship with Graphic Impressions Inc., a company hired to develop "communication messages and materials" and implement a media strategy.

The company was a family business, owned and operated by the daughter and wife of Larry Martin, the foundation's vice president of communications, according to the foundation. The company, which had no other employees, was paid $16,500 a month, or $198,000 annually, not including expenses.

In 2004, federal auditors questioned Martin's relationship to the business. Martin had been a principal of Graphic Impressions and even signed its contract with the foundation in 2001. When he was hired by the foundation in May 2003, he turned the business over to his daughter. Federal guidelines for organizations receiving grants prohibit organization employees from receiving consulting fees at the same time.

The foundation maintains Martin never owned the business and that his title as principal was a "marketing title." But in 2004, federal auditors concluded "Mr. Martin's association with Graphic Impressions continues to materially exhibit the behaviors of ownership." "Moreover, our review disclosed numerous deviations from normal and established internal control policies and procedures regarding contract award, approval of invoices, payment of invoices, and inadequate disclosure of related party transactions," auditors wrote.

The audit also notes that Graphic Impressions rented an apartment in Little Rock, where Martin lived, and began charging the foundation $100 per day for lodging and $50 daily for meals.

In his response to the audit, chief executive Brasher wrote that "there is not a shred of evidence to support" the assertion that Martin "continued to gain financially from AFMC's business with Graphic Impressions" after the foundation hired him.

Graphic Impressions received $220,845 in fiscal 2003, the largest consulting fee the organization paid a single entity. Its contract ended Feb. 1, 2005. There is no phone listing for that business, or for Artisan Communications, as it was renamed in 2004.

BOARD RETREATS

The Senate Finance Committee did not ask for the foundation's travel expenses, but the issue arose in inquiries into other organizations.

According to a Dec. 8, 2005, letter from Grassley, the board of directors of a New Jersey quality improvement organization traveled to the Cayman Islands and California for annual retreats, trips with a combined cost of more than $100,000.

"[I]t is difficult to understand why an entire board would need to travel from New Jersey to the Grand Cayman to discuss improving quality of care for beneficiaries," Grassley wrote.

The last two retreats for the Arkansas Foundation for Medical Care's board members were held in Lake Tahoe and Half Moon Bay, outside San Francisco.

At least 23 people traveled on the four-night Lake Tahoe excursion and stayed in a $262-per-night hotel, according to travel vouchers obtained by the Arkansas Democrat-Gazette. At least 26 people traveled to Half Moon Bay in 2005, staying in a hotel where Brasher's room cost $436 per night.

Other trips taken by the Arkansas foundation's board members included visits to New Orleans and San Francisco, where the organization paid for dinner for the wives of some board members, according to a travel voucher.

"The retreat is an educational training time that offers continuing education hours," Thornton said in a May 19 interview. "It also is a time for strategic planning. Beyond that, it's an opportunity for the board to develop their own capabilities of a governing body and to plan for the future of the organization." Auditors haven't always seen it that way.

A Defense Contract Audit Agency review of the foundation's 2000 expenses took exception to $61,010 in travel costs associated with a board retreat in Coeur d'Alene, Idaho. Eighteen employees and 16 board members attended that event.

The next year, auditors again questioned $67,469 spent on a retreat in Jackson Hole, Wyo., attended by 34 people.

"There is no business and/or technical reason to hold meetings attended only by AFMC employees and Board members, who are all located in Arkansas, in locations requiring significant travel and hotel expenditures," the audit said. "Likewise, five hours of meeting time do not require four days of resort accommodations."

In an August 2002 response to that audit, Brasher acknowledged that the "travel expenses related to the annual Board of Directors retreat ... do not pass the test as a reasonable cost."

HIGH PAY

In addition to travel expenses and corporate apartments, Grassley has also questioned the compensation paid to board members by quality improvement organizations.

The Arkansas Foundation for Medical Care's 25 board members - most of whom are doctors - received a total of $150,114, according to the group's 2004 tax filing. Two board members received more than $10,000 each in compensation for serving in what is typically a voluntary role for nonprofit organizations.

Julie Munsell, spokesman for the Arkansas Department of Health and Human Services, said the Medicaid program's approximately $12 million in annual contracts with the foundation have been "heavily scrutinized" to ensure the price of services is appropriate.

"We will let the monitoring processes that are in place deal with any potential issues of AFMC's business practices," Munsell said. "Much like other entities we contract with [hospitals, for example] we aren't involved in administrative decisions."

In addition to monitoring Medicare and Medicaid billing and services, the foundation investigated 23 consumer complaints from August 2004 through April 2005. It confirmed that a "quality concern" existed in four of the complaints.

In a March 7 press release, the Senate Finance Committee noted that Grassley was concerned about "the seeming lack of effectiveness and accountability" of the quality improvement organizations generally.

An Institute of Medicine report released in March found that while the quality of health care received by Medicare beneficiaries has improved nationally, it is unclear how much the program of quality improvement organizations contributed to that improvement.

Why don't we ask Mike Beebe why Arkansas taxes are so high?
-------------------------------------

FORT SMITH - Arkansas ranks in the top ten, but this list isn't one the state wants to be on. In the first of a two-part story, 5NEWS reporter Jared Broyles investigates why you're paying the high price of high taxes in Arkansas.

"In my opinion it is a death spiral," KFSM financial expert John Taylor said.

Arkansas ranks among the top 10 states for the worst tax climate. When it comes to overall taxes, we rank 41st among the 50 states. Arkansas does even worse when you look at the business tax index -- a low score at 44. Those numbers from the non-profit Tax Foundation are cause for concern.

Commenting on the report, Rogers mayor Steve Womack said, "It does not portray a very good picture for business development in our state."

Neighboring Oklahoma does much better at 17 and 8. The Sooner State is nearly two dozen spots higher than Arkansas overall and far better for business.

"We're losing more and more jobs to offshore. We're losing more and more jobs to other southern states that have conservative governors who are cutting taxes and calling up industry and saying, we're open for business," state senator Denny Altes said.

So, how did we get here, where the tax burden has become too much to bear?

Republican candidate for governor Asa Hutchinson explains:

"The past two decades if we had a need in education or roads or any other social needs in our state we raised the taxes to meet that need. Now we're to the point where we can't really do that anymore."

Mike Beebe, the state's current attorney general and Democratic candidate for governor agrees.

"I've been saying all along that our state income tax and our state sales tax which the two primary taxes which support state government have gotten to the point where they're not competitive."

And that's bad for business.

"So if you're going to pay somebody an hourly wage, they can only spend what's left over after taxes," Taylor explained. "so, if you go to a state where an employee has more left over after taxes, then its logical that you would have to pay them a little less money than if you went to a state where the tax climate was much higher."

States like Texas, Tennessee and Florida that don't have a personal income tax.

Arkansas leaders worry that businesses and residents will run for the borders. Just take a family of four with an average household income of $50,000. In Texas and Tennesee they would pay no state income tax. In Oklahoma, the family would pay about $2,100. And in Arkansas, if the couple files jointly they would pay $200 more. But if they file separate tax returns in the Natural State, they would actually save $400 more than if they lived in Oklahoma.

But it's wealthy Arkansans who have the most to lose, and choose to move so they don't have to pay the price. Financial expert John Taylor points out that few that made their fortune in Arkansas continue to live here. Like the founding family of Wal-Mart: only two Waltons haven't fled the state.

"You say, 'Well shouldn't those people pay income tax?'" Taylor questioned. "Well, would you rather have a little of their money or none of their money?"

State senator Denny Altes of Fort Smith agrees:

"If the wealthy people are leaving with their money then where does that leave us the poor people? Behind to pay the taxes."

But, they say money isn't all Arkansas is losing. The state is also losing its minds.

"More and more of our bright young people that we educate with our tax dollars will go to Texas, and Tennessee and other places," Taylor warned.

Senator Denny Altes says the state has a surplus: one billion dollars banked in less than three years. He says some of that money should be used to pay for current programs and help lift the tax load, but Altes says other state legislators have ideas of their own.

"It's a vicious cycle, and the people say we want to save, we want to keep it, but we don't save, we don't keep it," he said. "We spend it on existing programs to expand them and we create new programs to expand government."

Altes says the fear of a future recession has legislators hoarding money in Little Rock instead of spending the surplus to lighten Arkansans' tax loads. Taylor says this is a wake-up call.

"I think its eventually going to stop the growth in Northwest Arkansas," Taylor predicted.

However, economist Dr. John Shelnutt with the Arkansas Department of Finance and Administration warns Arkansans about reading too much into the Tax Foundation's report. He says what's interesting about the study is that the methodology is skewed towards flat tax. According to him, the foundation awarded higher points for states that had a flat tax structure, a smaller number of tax brackets, or no tax in a major category. Dr. Shelnutt says the vast majority of the weight of the index and ranking is by that structure.

Shelnutt says when you look at Arkansas compared to Arizona, the entire difference came from bias toward flat tax structure. He believes even a state with a higher marginal tax rate than Arkansas would look better in the rankings if it has fewer brackets. (KFSM)

Former Transportation Information Technology Chief To Oversee Next Generation Foundation's Executive Advisory Board

Washington, DC – The former Chief Information Technology Officer at the U.S. Department of Transportation and current Vice President of Government Relations at Lockheed Martin, Daniel P. Matthews has agreed to join the Next Generation Foundation (NGF) as the head of its Executive Advisory Board , the organization announced today.

"When it comes to successful leadership there is not a more respected or knowledgeable individual than Dan Matthews," noted NGF President R. Stuart Jones. "For a longtime, Dan has displayed a passionate commitment to creating a brighter future for the citizens of this country regardless of where they live, or who their parents are. We are honored that he has joined us in this incredibly important flight."

As Chairman of the Executive Advisory Board, Matthews will help NGF develop and implement its programs like its e-DELTA initiative. The e-DELTA broadband initiative will work to bring public, private and non-profit leaders together to ensure affordable high-speed internet is available in the Mississippi Delta Region, one of the countries poorest areas. By leveraging their expertise and resources, NGF will work to bring affordable high-speed internet and the 'know-how' to use it to the Delta region.

"It is organizations like the Next Generation Foundation that can unlock the potential of the Delta region by working to ensure that every student, parent and grandparent has the same resources a doctor, lawyer or CEO would have," commented Dan Matthews. "I am excited to be a part of this growing organization and look forward to the task at hand."

The Next Generation Foundation is a collection of professionals in Washington and across the country dedicated to improving economic and educational conditions in the Mississippi Delta. In February NGF announced its inaugural Promise Scholarships and plans to announce the recipients of the scholarships in June. NGF focuses on the eight states of the Mississippi Delta: Arkansas, Illinois, Kentucky, Louisiana , Mississippi, Missouri and Tennessee, as well as parts of Alabama. For more information visit the website at www.ngfonline.org.