FBI said to investigate PACs' giving to Maggio

The FBI is investigating donations that Circuit Judge Michael Maggio’s (shown) campaign accepted from political action committees.
The FBI is investigating donations that Circuit Judge Michael Maggio’s (shown) campaign accepted from political action committees.

CONWAY -- The FBI is investigating donations that Circuit Judge Michael Maggio's appeals-court campaign accepted from political action committees funded almost entirely by Fort Smith businessman Michael Morton and his companies, multiple sources said this week.

Morton, who has denied any wrongdoing, gave the PACs thousands of dollars in checks dated July 8. That same day, Maggio heard a plea from one of Morton's 32 nursing homes to reduce a Faulkner County jury's judgment in a negligence lawsuit over the 2008 death of patient Martha Bull, 76, of Perryville. Three days later, Maggio cut the award from $5.2 million to $1 million.

All but one of the eight PACs later gave the Maggio campaign money, and Morton has said it was his understanding the PACs were for the Maggio campaign.

Two sources told the Arkansas Democrat-Gazette on condition of anonymity in interviews Thursday and Friday that they knew of the federal agency's investigation. That development came as the University of Central Arkansas confirmed it is doing an internal audit of former state Sen. Gilbert Baker, who resigned as executive assistant to the UCA president on April 2 after a company he founded was linked to Morton's support for Maggio.

One source said he became aware of the investigation some time ago but does not know what the FBI has learned. He has not talked with the agency, he said.

The second source said he met with two FBI agents less than two weeks after the first reports appeared about the PAC contributions, and "gave them information on the PACs" and the people whose names were listed on the PAC records.

The source, who is familiar with Arkansas politics and candidate financing, said he explained to the FBI the "relationships or the lack thereof of all the people" involved in the PACs.

At least three of the people originally listed as PAC officers on filing documents have said they did not know their names were on them.

The second source said another party had suggested the FBI talk with him about the matter.

"When I first met with them, they were like, 'Oh, yeah, we know about it'" from having read news articles. When I kind of spread it all out ... they were, like, 'Oh, wow!' ... They hadn't known of the Gilbert Baker connection," the source said.

Neither Maggio nor Baker is charged with a crime.

FBI spokesman Kimberly Brunell said the agency could neither confirm nor deny an investigation.

In an email Friday, Maggio's attorney, Lauren Hamilton, added, "We have received no notice of an investigation nor received any requests for cooperation."

The Arkansas Supreme Court has stripped Maggio of all of his cases in the 20th Judicial Circuit, and two state agencies are investigating issues relating to him and the contributions.

Maggio pulled out of the race for the Arkansas Court of Appeals on March 5 over online comments he made about a wide range of topics, including women, race, divorce and bestiality.

Baker, who had tenure, took an $82,000 pay cut when he resigned and became an assistant music professor. He now makes $50,000 a year.

Pam Massey, director of UCA's Office of Internal Audit, said Bunny Adcock, chairman of the board of trustees' Audit Committee, authorized the review on April 23 "as [the university has] done in the past because of Mr. Baker's abrupt resignation of his administrative position."

The audit "is ongoing," UCA spokesman Christina Madsen said Thursday.

Baker did not respond to a question about the FBI but said in an email that he "had a great meeting with [UCA] auditors [Friday] and they indicated a clean audit and all good."

Baker's email came late Friday afternoon as UCA employees and others were preparing for the three-day holiday weekend, and school officials did not reply to a question about whether Baker's statement was accurate.

"I have not heard back" on that, Madsen said.

UCA released more than 400 pages of audit-related documents Friday to the Democrat-Gazette under the Arkansas Freedom of Information Act.

One document that details what should be reviewed said the audit's objectives include determining "whether the Executive Assistant to the President had committed egregious acts or fraud."

The audit also would seek to determine whether Baker's travel expenditures were "adequately supported" and related to his job duties and to "determine compliance with laws, rules, regulations, and Board policies," the document said.

Records indicate auditors have reviewed or plan to review a wide range of materials, including the computer Baker used in his administrative job; his UCA email account; his travel expenditures, which include trips to Argentina and New York; his fundraising for UCA, as well as some of his political activities; and a $100,000 donation that Baker handled from Morton to UCA.

On March 24, the UCA Foundation, which handles private contributions to the university, returned Morton's donation. Records show that Baker "hand delivered" Morton's check, dated July 8, and instructed that it was to be an anonymous gift. The records indicate the foundation entered the donation as a gift on July 15.

A page of handwritten notes based on an auditor's phone interview Tuesday with Shelley Mehl, the foundation president who was in China at the time, said, "No idea meeting with him (GB & Morton)" and later says "... Why returned" and then says "public perception. (3 people who knew in her building)."

The foundation returned the money just days after the Democrat-Gazette quoted Morton as saying Linda Leigh Flanagin, who worked for a consulting company Baker formed, had asked Morton to support Maggio's bid for the Arkansas Court of Appeals. Morton said the request came while Maggio was presiding over the trial or the subsequent judgment issue. Baker said he did not know about Flanagin's request.

Among the other documents UCA released are Baker's 2012 and 2013 statements of financial interest filed with the state.

On the 2012 filing, he reported that he was paid more than $12,500 for his work as executive director of the Arkansas Faith & Freedom Coalition, part of the national organization founded by conservative political activist Ralph Reed. Baker, a Conway Republican, took the administrative job at UCA in early 2013 after leaving the state Senate.

A handwritten note accompanying Baker's 2012 statement, filed Jan. 30, 2013, said, "How could we get proof he is still not employed by Freedom Coalition."

A computer-generated spreadsheet detailing information gathered from Baker's travel expenses twice points out that he wasn't reimbursed for meals.

On a trip to Dallas, for example, a notation said, "Dinner with Jay Murray and no reimbursement? Visited with Stephen Carter at [Crescent] Hotel downtown and no refreshments for guest of state?"

On a trip to Buenos Aires, Argentina, the same sheet noted that he went for "recruitment" and said, "Why no meals? One room 2 adults."

"The reservation shows two adults because the online reservation system defaults to two people," Madsen said Friday.

Handwritten notes on a separate sheet said, "Meals -- no meals b/c [because] doesn't want itemized receipt."

Still another sheet with handwritten notes gave some information on the Argentina trip. It said, "Alcohol may have beer," and adds, "Paid for on these receipts, Per Jane Ann turn in to foundation for payment 12/12/13. Gilbert does not want to turn in."

While in the Legislature, Baker was a staunch opponent of allowing Conway restaurants to obtain private-club licenses so that they could sell alcoholic beverages. Faulkner County is dry but has several such restaurants.

A section on 05/24/2014

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