State Sen. Jeremy Hutchinson to resign following federal indictment | Arkansas Blog

State Sen. Jeremy Hutchinson to resign following federal indictment

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Senator Jeremy Hutchinson - BRIAN CHILSON
  • BRIAN CHILSON
  • Senator Jeremy Hutchinson

State Sen. Jeremy Hutchinson (R-Little Rock) was indicted on Friday by a federal grand jury for allegedly using tens of thousands of dollars of campaign contributions for his own personal benefit and concealing the scheme by falsifying campaign finance reports and income tax filings. The senator, who is the nephew of Governor Asa Hutchinson, disputes the allegations but nonetheless announced that he will resign from office.

Among the misuses of campaign funds listed in the indictment were tickets and accommodation expenses for a Caribbean cruise and a vacation to New Orleans, as well as shopping sprees at jewelry, clothing, and other retail stores. The government also alleges that he used campaign funds for more everyday expenses: groceries and gas charges, gym membership fees, and Netflix fees.

Here's the indictment. Hutchinson is scheduled to appear before U.S. Magistrate Judge Patricia S. Harris on September 18.

Importantly, the charges brought against Hutchinson on Friday are distinct from allegations of bribery that emerged in the guilty plea of former lobbyist Rusty Cranford. A source familiar with the investigation tells the Arkansas Times that today’s indictment is not a signal that authorities have dropped the investigation of legal fees paid to Hutchinson and another unnamed senator in what has been characterized as payments for favorable legislative actions. Those investigations continue.

Shortly after the office of U.S. Attorney Cody Hiland announced the news, Hutchinson's attorneys, Tim Dudley and Stephen Larson, released a statement calling the allegations in the indictment factually inaccurate. They maintain the senator is innocent but said he intended to resign from the Arkansas Senate so as not to be a distraction.



"The allegations in today’s indictment are mere allegations. We look forward to vigorously disputing their accuracy very soon before a jury," the statement said. Dudley and Larson claim that "the government has irreparably impaired Mr. Hutchinson’s ability to defend himself by searching his computer without a warrant and then inexplicably destroying an image of his hard drive which possessed key exculpatory evidence.”

The attorneys also included a statement from Hutchinson himself:
It has been the greatest honor of my life to represent the people in my Senate district. I worked very hard to serve all of my constituents, and I appreciate the many gestures of support I have received from friends, neighbors and colleagues over recent weeks. Nobody would want to find themselves in my present position, but I intend to defend myself and offer truthful evidence to a jury as soon as possible. I do not agree with decisions that have led us to this place, but I am powerless to control those decisions. However, I continue to believe in our system of justice and will trust that it will produce a fair and just result in this case.
The indictment alleges that Hutchinson converted more than $200,000 in campaign contributions to his personal use over the period 2010 to 2017.

The government alleges that Hutchinson used $41,000 from his campaign-contribution account to cover vacations, tuition payments, food and various "personal luxuries and expenses," including the Caribbean cruise and the New Orleans vacation.

Hutchinson also converted campaign funds into cash for his own personal use, according to the indictment. The government alleges that he withdrew $78,000 in cash from his campaign account; that he transferred another $41,000 by wire transfer or check; that he deposited around $42,000 in intended campaign contributions directly into his own personal account; and that he personally cashed five checks intended to be campaign contributions, totaling $6,400.

In his efforts to conceal the illicit use of campaign funds, according to the indictment, Hutchinson underreported approximately $71,000 in campaign contributions in his campaign filings submitted to the Secretary of State.

Hutchinson also falsified his federal income tax returns, the government alleges, by failing to report the contributions that he converted to personal use.

Finally, the government also alleges that during this same period, Hutchinson also falsified his federal income tax returns by underreporting the income that he made as an attorney. This charge may have little to do with the broader public corruption charges, but one detail pops: One of the entities that paid him as an attorney during this period, listed as Charity A, paid him $163,500 over the course of 2013 and 2014. In the federal information filed along with Cranford's plea, prosecutors stated that Preferred Family Healthcare, the tax-exempt charity previously known as Alternative Opportunities, paid Hutchinson ostensible legal fees during this period that were in fact bribes to curry favor in the legislature.

Governor Hutchinson issued his own statement on Friday afternoon soon after the news broke:
I just learned of the indictment against Sen. Jeremy Hutchinson for campaign expenditure and federal tax violations. This is a very sad day for everyone when a family member is charged. I have to look at this sad news as an uncle but also as a political leader in the state.

As an uncle, my heart aches for Jeremy’s children and expanded family. This is a tough time, and it will not get any easier in the coming months.

As a political leader, I know the United States Attorney always reminds the public that these charges are only allegations and he is presumed innocent, but the reality is that the charges alone undermine public confidence in our system of government. For that reason, Jeremy understands he needs to resign from the Senate, and I support that decision. He will need to devote his resources and energy in answering these allegations.
The statement from Hutchinson's attorneys also included this statement from his father, former U.S Sen. Tim Hutchinson (who is the brother of the governor):
I have faith in our courts and our system of justice. I have full faith in my son’s innocence of the allegations as set out in today’s indictment and believe that when the facts are fairly presented he will be exonerated.
The attorneys also included an announcement from Bud Cummins, a former U.S. attorney and Republican political operative, that he's agreed to act as the trustee of a legal defense fund "to receive contributions from those who want to insure that Jeremy Hutchinson has the resources necessary to mount an adequate defense.” Cummins said he was doing so at the request of Hutchinson's "friends, colleagues and family."

Here's the full press release from federal prosecutors:
ARKANSAS STATE SENATOR JEREMY HUTCHINSON INDICTED ON WIRE AND TAX FRAUD CHARGES

LITTLE ROCK—A federal grand jury indicted current Arkansas State Senator Jeremy Hutchinson for allegedly devising a scheme to steal thousands of dollars in campaign contributions—spending them on personal luxuries and expenses—and then falsifying state campaign finance reports and tax filings as part of the scheme.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Cody Hiland for the Eastern District of Arkansas, Special Agent in Charge Diane Upchurch of the FBI Little Rock Field Office, and Special Agent in Charge Tamera Cantu of IRS Criminal Investigation (IRS–CI) Dallas Field Office, made the announcement after the indictment was unsealed today.

Hutchinson, 44, of Little Rock, has been a State Senator since 2011 and first became involved in elected politics as a State Representative in 2000. The 12-count indictment charges Hutchinson with eight counts of wire fraud and four counts of filing false tax returns. Hutchinson is scheduled to appear before U.S. Magistrate Judge Patricia S. Harris on September 18 at 10 a.m.

“Jeremy Hutchinson allegedly diverted contributions from his Arkansas State Senate campaigns to pay for an array of personal expenses,” said Assistant Attorney General Benczkowski. “The charges in this case demonstrate the commitment of the Department and our law enforcement partners to investigate and prosecute those involved in alleged campaign-related misconduct.”

“This indictment by the grand jury represents serious charges, and we look forward to preparing our case and presenting it to a jury of 12 people who we trust to do justice in this matter,” said U.S. Attorney Hiland.

“The indictment of Jeremy Hutchinson represents our commitment to vigorously investigate allegations of public corruption by elected officials,” said FBI Special Agent in Charge Upchurch. “We appreciate the efforts of the U.S. Attorney’s Offices for the Eastern and Western Districts of Arkansas, IRS-CI, FBI, and the Criminal Division of the Department of Justice’s Public Integrity Section.”

“The grand jury’s indictment of Mr. Hutchinson demonstrates the collective resolve of IRS-CI to enforce our nation’s tax laws,” said IRS-CI Special Agent in Charge Cantu.

Counts one through eight of the indictment charge Hutchinson with wire fraud related to falsified state campaign finance reports and soliciting campaign donors with fraudulent intent. Counts nine through 12 charge Hutchinson with tax fraud for allegedly filing false tax returns from 2011 to 2014.

The maximum penalties for violation of 18 U.S.C. § 1343 (wire fraud), as charged in counts one through eight is not more than 20 years’ imprisonment, a fine of not more than $250,000, and not more than three years of supervised release. A violation of 26 U.S.C. § 7206(1) (filing false tax return), as charged in counts nine through 12, carries a maximum penalty of three years’ imprisonment, a fine of not more than $100,000, together with the costs of prosecution, and not more than one year of supervised release.

The investigation into Hutchinson was conducted by the FBI and IRS-CI. The case is being prosecuted by Assistant United States Attorneys Stephanie Mazzanti and Patrick Harris from the Eastern District of Arkansas, Assistant United States Attorney Ben Wulff from the Western District of Arkansas, and Trial Attorney Marco Palmieri of the Criminal Division of the Department of Justice’s Public Integrity Section.

An indictment contains only allegations. A defendant is presumed innocent unless and until proven guilty.

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