LITTLE ROCK, Ark. (AP) — The former head of a defunct Arkansas nonprofit that helped at-risk youth pleaded guilty Thursday to diverting more than $120,000 from the group to an unnamed state senator in a widening corruption probe that has already ensnared several former lawmakers.
Jerry Walsh pleaded guilty in federal court to conspiring to divert more than $380,000 from South Arkansas Youth Services without the authority of the organization's board of directors. Federal prosecutors say the scheme involved diverting the money to a state senator identified only as "Arkansas Senator C" and the lobbying firm of Rusty Cranford, who pleaded guilty last month to bribing two former lawmakers and a state senator.
Prosecutors said Walsh hired the state senator, who is also an attorney, in 2013 and paid him in the form of retainers and legal fees but with the expectation he would not perform any legal work.
"Walsh understood that in exchange for the retainer and legal fees, Arkansas Senator C agreed to take favorable official action to benefit Walsh and SAYS by influencing Arkansas officials," to preserve the organization's contracts with the state and to prevent agencies from taking negative action against the group, prosecutors said in court documents.
An attorney for Walsh did not immediately return a phone message Thursday. South Arkansas Youth Services filed for bankruptcy in January.
Prosecutors said Walsh also locked the nonprofit organization into a more expensive contract with Cranford's lobbying firms and employed an unnamed relative of Cranford in a "no-show" job where they weren't expected to perform any work.
Cranford last month admitted in federal court documents to paying bribes to two former state lawmakers and a legislator identified only as "Arkansas Senator A." Republican Sen. Jeremy Hutchinson's attorney has acknowledged his client is the lawmaker referred to, but has denied the allegations. Hutchinson, who is the nephew of Gov. Asa Hutchinson, has not been charged in the probe.
The unnamed senator in Walsh's case is described as someone who had a senior position in the Senate. Court documents also said he had the power to prevent bills from coming to the floor for a vote and to affect which appropriations bills were funded. Walsh told the Arkansas Times newspaper in May that the nonprofit had hired former state Sen. Michael Lamoureux and Sen. Jeremy Hutchinson as attorneys. Lamoureux was the state Senate president in 2013 and left office in 2014 to serve as the governor's chief of staff. Lamoureux left that post in 2016.
Lamoureux and Jeremy Hutchinson did not immediately return calls Thursday.
The bribery probes over the past year have prompted the state Senate to overhaul its ethics rules and the state's attorney general to form a unit to investigate public corruption.
"I look forward to a day when all politicians exercising influence do so based upon the best interests of the children in their communities and not on who is paying them for no-show jobs," Duane Keys, the U.S. attorney for the Western District of Arkansas, said in a release.
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