Today's outrage: State inaction on Medicaid scandal | Arkansas Blog

Today's outrage: State inaction on Medicaid scandal

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WHERE'S THE ACCOUNTABILITY: The feds moved on Rusty Cranford. But the legislature and governor have done nothing to dig into the continuing beneficiary of his criminal efforts.
  • WHERE'S THE ACCOUNTABILITY: The feds moved on Rusty Cranford. But the legislature and governor have done nothing to dig into the continuing beneficiary of his criminal efforts.
So the Arkansas Senate yesterday announced supposed improvements in an ethics code that has been unenforced for the 45 years I've worked in Arkansas. Meanwhile, the Senate, House and governor stand silent on the biggest scandal of the moment — disregard of a massive criminal enterprise from which the prime beneficiary still receives more than $40 million a year in taxpayer money.

I refer to the healthcare provider, Preferred Family Healthcare Services, sitting fat thanks to criminal or unethical acts by at least one of its executives and many legislators.

My take:

Where’s the outrage?

Is it only me? Am I the only person, apart from federal prosecutors, outraged about the criminal enterprise that inveigled itself into a privileged position as an Arkansas taxpayer-financed human services provider to the tune, today, of $43 million a year?



I refer to what is now known as Preferred Family Healthcare services, a Missouri-based nonprofit that provides Medicaid-financed behavioral health services in dozens of places around Arkansas.

It faces no charges, but its business is at the core of former company executive/lobbyist Rusty Cranford’s guilty plea to a federal charge that involves bribes, kickbacks and illegal campaign contributions to win legislative support and direct cash grants for PFH.

The scheme, the government says, included kickbacks to Republican Sen. Jon Woods from a planned state handout.

Cranford bribed former Democratic legislator Hank Wilkins for his considerable help, funneling the money through a church Wilkins pastored. Former Republican Rep. Micah Neal also admitted to scheming with Cranford to help PFH in return for kickbacks.

The company hired Eddie Cooper, a Democratic legislator, and he joined the criminal conspiracy. He's pleaded guilty.

At least one other former legislator was put on the payroll, but has not been charged.
Numerous legislators, as yet unaccused of crimes, gladly signed their name to state handouts to Cranford and related organizations for everything from turkey dinners to health services. At least one received money for services — diversity counseling. Another guided a fat sum to the agency in a part of the state in which he doesn't live.

A Pennsylvania lobbyist pleaded guilty to funneling PFH money to federal politicians in illegal campaign contributions.

A Springfield accountant committed suicide after pleading guilty to charges related to ill-gotten money from PFH.

Three members of the non-profit organization’s leadership team were fired after the Pennsylvania lobbyist’s guilty plea, but at least two others stayed on. One was just “placed on leave” this week after the Arkansas Times inquired about the unflattering facts in Cranford’s guilty plea that seemed to apply to a company leader recently depicted as being among those supposedly setting things right.

Cranford has stipulated getting almost $4 million in illegal money from the operation.
After all this, PFH still draws down millions in taxpayer money. State officials seem to suggest it is too big to fail. Gov. Asa Hutchinson has said almost nothing. Coincidentally, his nephew, Sen. Jeremy Hutchinson, was paid $500,000 to help the company (legal fees, he says; something worse, the government intimates).

Democrats, with some of their own knotted up in the scandal, have done little better in seeking accountability.

The state put Ted Suhl’s behavioral health agencies out of business when he was caught in a bribery scheme. Can no one else replace PFH? The state owes a full explanation and proof of how this can be so.

The state, long ago, should have demanded an audit of everything handed to PFH over the years, whether for Medicaid-reimbursed services or the badly abused General Improvement Fund grants. Was the money spent for purposes described?

Is the state reimbursement scheme engineered into law by Cranford with the help of bribed legislators serving the state well? Or is it a vehicle for profiteering by PFH? Shouldn’t that process be reviewed?

If the organization could tap Medicaid for enough money to cover millions in bribes, kickbacks and illegal campaign contributions – not to mention fat salaries and high living on company credit cards – is it possible that payments now being made under the same system too high?

If PFH really is too important to be fired, it’s even more important that it be subjected to thorough scrutiny. I’ve put various questions to Gov. Hutchinson about this. As yet: Silence.

How brassy is PFH? It claims IT is a victim. It strains belief to say those working at high levels in PFH, some still on board today, had no inkling about the many questionable activities or Cranford’s sleaziness. But they had reason to stay silent. The pay is damn good.

In the most recently available tax filing, in 2016, PFH disclosed that its top eight officers were making between $272,000 and almost $1 million, with five making about a half-million. Rusty Cranford drew a puny $276,000, but his private firm also received $547,000 for "public relations." The million-dollar-man in charge, while Cranford was at play, is still in charge. Great oversight he provided, right?

Granted, Cranford's expenses – in legislative bribes, kickbacks to other executives and illegal campaign contributions – ran high.

Spare me the window dressing senators offered up yesterday about ethics "reform"? Give me some accountability on this festering boil on the body politic.

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