Probable cause found in Maggio ethics case

Mike Maggio
Mike Maggio

The Arkansas Ethics Commission on Friday found probable cause in the campaign-finance case against Circuit Judge Michael Maggio, who also is under investigation by the FBI and a second state agency.

Maggio of Conway appeared before the commission with his attorney, Lauren Hamilton, and told the panel that he was sorry and blamed a mathematical error for donations his campaign received above state limits, said Thomas Buchanan, the attorney who filed the ethics complaint against Maggio.

The commission's task was to decide whether probable cause existed for finding that Maggio had violated state law by accepting campaign contributions of more than $2,000 per election from anyone and whether he accepted a contribution from "a prohibited political action committee."

The hearing, which lasted roughly 30 minutes, was closed to the public in keeping with state law, but Buchanan was allowed to participate.

The commission took no public vote on the Maggio case. Under commission procedures, that means the panel did not dismiss the case and will instead propose a settlement with Maggio.

When a commission finds a lack of probable cause, it votes publicly for dismissal, Commission Director Graham Sloan has said. After Friday's hearing, he said he could not comment on pending matters.

Maggio and Hamilton left the commission's offices immediately after Sloan talked with them privately. Maggio, who has been stripped of his court cases by the Arkansas Supreme Court, would not comment.

Hamilton said the closed session was "confidential," but she said Maggio had not acted unethically.

"He complied with all the laws," she said. "We await to see what the commission decides to do and take it from there."

The FBI and the Arkansas Judicial Discipline and Disability Commission also are investigating Maggio over contributions his since-halted appeals-court campaign received from seven of eight political action committees funded almost entirely by nursing-home owner Michael Morton of Fort Smith or his businesses.

Morton has said he donated the money to the PACs with the understanding that they were for Maggio's campaign. Each of Morton's checks was dated July 8, three days before Maggio cut a Faulkner County jury's $5.2 million judgment against one of Morton's 32 nursing homes to $1 million.

The judgment came in a negligence lawsuit filed by the family of patient Martha Bull, who died in 2008 in the Greenbrier Rehabilitation and Nursing Center. Buchanan filed an ethics complaint against Maggio on behalf of two of Bull's daughters after the timing of Morton's PAC donations came to light in March.

Buchanan said Friday that Hamilton took the position during the hearing that campaign donations exceeding the state's $2,000 limit were clerical errors.

According to Buchanan, Maggio told the panel that his campaign had two people looking over the campaign funds. Those two, Maggio reportedly said, were responsible for ensuring the campaign followed the law.

Maggio said there was a breakdown in communication and a mathematical oversight, Buchanan related.

"There was no ill intent involved," Maggio said, according to Buchanan. Maggio also said he didn't know the source or the amount of money given to his campaign, Buchanan said.

Buchanan said Maggio did not identify the two campaign workers.

Maggio's campaign-finance documents filed with the state listed Luke Pruett of Conway as his chairman/treasurer, but Pruett told the Arkansas Democrat-Gazette last month that he wasn't the treasurer in practice. Pruett said the treasurer was Dawn Rivers, Maggio's former girlfriend and now his wife.

"She would email me spreadsheets," Pruett said. "I would get the information from her," put it on the finance forms and submit them to the secretary of state's office. "I never saw any money."

According to Buchanan, Maggio said that when the workers found the problems, they refunded the money.

Buchanan said he countered to the panel that the math was simple, just "add up the numbers."

"It was only after there were [accusations] ... before they [Maggio's campaign] did anything," he added.

"When you have a system designed where the treasurer doesn't even see the money, you're asking for problems," Buchanan said.

Buchanan said that the commission staff allowed him to look at a 4- to 5-inch thick stack of information it has gathered during its investigation. He was not allowed to take it out of the room. He didn't have time to read everything but said he did see that a staff attorney had interviewed Bruce Hawkins of Morrilton.

The D. Bruce Hawkins 2 PAC got a $3,000 check dated July 8 from Morton's Central Arkansas Nursing Centers Inc. and later gave Maggio's campaign $3,000. That company was originally a defendant in the lawsuit over Bull's death but was dismissed from the case.

Buchanan said a commission attorney told the panel that there was no evidence to show that the PACs were prohibited.

Arkansas Code Annotated 7-6-215 defines an "approved" PAC as one that registers with the secretary of state's office within 15 days "after accepting contributions during a calendar year that exceed ... [$500] in the aggregate."

Seven of the PACs, all created by Little Rock lawyer Chris Stewart, didn't register with that office until July 31, and another one didn't register until Aug. 6. Each got more than $500 in contributions.

But in early April, Stewart said he subsequently changed the dates that the PACs received the Morton donations to later dates because he said he had inadvertently listed the dates on the checks rather than the dates the PACs accepted the gifts. The revisions made the gap between contribution dates and registration dates fewer than 15 days.

Buchanan said he urged the commission to "just follow the law."

"The family of Martha Bull wants to make sure all the proper laws were followed" when Maggio decided to reduce the settlement amount, Buchanan added.

According to an email from Sloan, who was explaining commission procedures in general and not the Maggio case, once probable cause is found, the commission issues a written settlement offer to the accused person.

"If the respondent [the accused] accepts that offer of settlement, then the case is concluded," Sloan wrote. That person can, however, request a public hearing. But if the person neither accepts the offer nor requests a public hearing, the case then is scheduled for "a final adjudication hearing, which is held "in confidential session."

Hamilton did not respond to an email or a phone message seeking further comment Friday.

State Desk on 06/21/2014

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