Lobbyist Milton R. "Rusty" Cranford of Rogers was arrested Wednesday morning, spokesman Don Ledford of the U.S. Attorney's office for the western district of Missouri confirmed. He declined to give further details.
Cranford was an Arkansas lobbyist for Preferred Family Healthcare, a Springfield, Mo.-based nonprofit. Three executives of Preferred Family embezzled $4 million of the company's money for political contributions and lobbying, according to a guilty plea last week.
Cranford was both the employer and business partner of former state Rep. Eddie Cooper of Melbourne, who pleaded guilty to his part in the Preferred Family-related scheme on Feb. 12.
Cranford also played a role in the kickback case of former state Sen. Jon Woods and state Rep. Micah Neal, both of Springdale. Neal pleaded guilty to one count of conspiracy on Jan. 4, 2017. Woods faces trial April 9 for taking a kickback in exchange for his and Neal's support in getting a $400,000 state grant to a company incorporated by Cranford.
Cranford's attorney, Nathan Garrett of Kansas City, did not return a telephone call to his firm requesting comment Wednesday morning. Cranford employed Cooper at the Cranford Coalition lobbying firm in Little Rock from 2011 to 2015, and they co-founded a lobbying firm in Missouri together in 2013, records in each state show.
Cranford has registered as a lobbyist since at least 2005 in Arkansas, at times as an individual and under the corporation names Cranford & Associates, the Cranford Coalition, Outcomes of Arkansas and Progressive Politics. His clients included Alternative Opportunities, Preferred Family's predecessor organization also involved in the embezzlement scheme, and several of its subsidiaries in Arkansas. His lobbying continued under Preferred Family.
Cranford's lobbying firms employed several former lawmakers over the years besides Cooper.
Other former lawmakers who worked for Cranford included former state Sen. Gene Jeffress, D-Louan. Arkansas Legislative Audit released a report in September that noted continuing education fees paid by bail bondsmen in Arkansas went to an industry association that used much of the money instead to pay for a lobbyist. That lobbyist was Rusty Cranford, said Jon Moore, deputy legislative auditor. Payment of those fees was required by Act 36 of 2011 by Jeffress.
Two other former lawmakers who lobbied for Cranford were Rep. Curran Everett, D-Salem, and Rep. Tim Summers, R-Bentonville, who also works for a subsidiary of Preferred Family Health called Decision Point.
Under federal law, nonprofits that receive federal funds, such as Medicaid, are barred from direct lobbying efforts. From 2010-17, an Arkansas lobbying firm received $3 million from Preferred Family. The nonprofit's financial records show its payments were for "consulting services," training and other expenses allowed by federal law when the real purpose of the payments was for lobbying and political campaign contributions, Cooper's plea documents say.
The lobbying efforts were to get grants and other funding, including money from Arkansas' General Improvement Fund, according to a statement from the U.S. attorney for the western district of Missouri about Cooper's guilty plea.
Cooper was an executive in Preferred Family Healthcare's operations in Arkansas from April 20, 2009, until April 26, 2017, in addition to being a lobbyist, according to court records. He was also a member of the nonprofit's board of directors where he voted against an independent audit requested by at least one other board member, according to court records.
Three unnamed executives of Preferred Family and its Arkansas lobbyist conspired with Cooper to pay the lobbyist's firm $3 million, the plea documents say. Another $1 million of Preferred Family's money went to lobbyist Donald Andrew Jones. Jones, 62, of Willingboro, N.J., pleaded guilty in federal court in Springfield on Dec. 18, 2017, to a similar charge of being paid for illegal lobbying services.
Cranford was mentioned by name in a pretrial hearing in the corruption case of Woods. Cranford was chief executive of AmeriWorks, a Bentonville-based nonprofit accused of paying kickbacks to Woods and Neal, also R-Springdale, in return for their support in securing a $400,000 state grant.
The grant was returned after federal investigators began questioning it, according to court documents in Wood's case.
Woods also faces trial April 9 in in a similar case in which he is accused of receiving kickbacks in return for grants from Ecclesia College in Springdale. Two of his alleged co-conspirators also go to trial on the Ecclesia-related charges: Oren Paris III, president of Ecclesia College, and consultant Randell G. Shelton Jr., formerly of Alma.
The Preferred Family executives in Cooper's plea are identified only as the chief financial officer, the chief operating officer and the chief executive officer. The chief financial officer and chief operating officer, along with another member of the executive team, were placed on indefinite leave in November by Preferred Family's board of directors. The company spokesman would not comment on why.
The chief financial officer placed on leave was Tom Goss of Springfield. His wife, Bontiea, is chief operating officer. Also placed on leave was Marilyn Nolan of Springfield, described by the nonprofit as a member of the senior management team.
Cooper's plea documents say that one of the Preferred Family executives involved in the scheme is the same one who signed the nonprofit's IRS Form 990, the tax return for nonprofit corporations, for 2015. An online check of Preferred Family's 2015 return showed that it was signed by Tom Goss.
The Springdale office of Decision Point, a behavioral health provider run by Preferred Family, processed the AmeriWorks grant and received the $400,000 on AmeriWorks' behalf. Tom Goss' signature stamp was on the check that refunded the money, grant records show.
NW News on 02/22/2018