No. 1: Trump Triumphant
In a presidential election like no other, Donald Trump proved all the naysayers wrong.
He overcame 16 Republican primary opponents and Democrat Hillary Clinton, the first woman atop a major-party ticket but also a veteran politico with a gold-plated resume married to one of the best retail politicians the United States has ever produced.
And, as the song says, Trump did it his way.
He was an unconventional candidate, to say the least. Remarks — on Mexicans, immigrants, an American POW, a disabled journalist, the family of a U.S. soldier killed in the Iraq War, Muslims, women — any one of which would have sunk any other candidate only seemed to reinforce his popularity among many.
And revelations — and Trump’s acknowledgement — that he’d avoided paying income taxes for years, along with allegations of shady business dealings and sexual assault, also failed to sway supporters.
Trump’s ideology is flexible and it veers from traditional Republican stands. His views have about-faced on immigration, foreign policy, health care, abortion. However, on a couple of issues he’s remained fairly firm: trade and entitlements. Trump supports international tariffs and has said he wouldn’t cut Social Security, Medicare or Medicaid.
What Trump, a real estate mogul, did that few other presidential candidates have been able to do in recent elections is connect with the crowd. The star (and executive producer) of the reality TV program “The Apprentice” and a consummate showman, Trump exploited his show business experience to successfully sell himself and his campaign, employing the slogan “Make America Great Again” and encouraging the use of simple, memorable chants like “Build the wall” (on the U.S. border with Mexico) “Lock her up” (Hillary Clinton) and “Drain the swamp” (the Washington power structure).
Trump also took full advantage of social media in the form of Twitter, bypassing media outlets — and political handlers — to reach out directly to voters, a practice that @realDonaldTrump has maintained since the election.
His supporters consider Trump an alpha male straight-shooter unconcerned with political correctness who is too rich himself to be beholden to oligarchic special interests. Trump understands his power, noting in January: “I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose voters.” And though one hopes his theory is never tested, he’s probably right.
Although much has been made of Trump’s defying almost all polling predictions to win the Electoral College and, hence, the election, he trailed Clinton in the popular vote, 62.8 million to her 65.4 million votes, more than President Barack Obama received in 2012. But Trump won in key states with big electoral totals: in the industrial states of Michigan, Wisconsin and Pennsylvania, states hit particularly hard by manufacturing’s decline.
In Arkansas, it was no contest at all. Trump got 60.6 percent of the vote in the November General Election; Clinton, who spent almost a dozen years as the state’s first lady when Bill Clinton was governor, 33.7 percent.
In the Arkansas General Assembly, the election gave Republicans an extra nine seats in the 100-member House, and after the election, three Democrats switched parties, giving the GOP a total of 76 in the House. Republicans also gained two seats in the 35-member Senate for a total of 26.
Victory has a way of reordering the universe and wiping slates — and memories — clean.
In February, Republican Gov. Asa Hutchinson told a Washington audience that the 2016 presidential election was a new phenomenon: “The entrance and the dominance of Mr. Trump on the stage and the way he really consumes the media is extraordinary.” The governor added that “the frustrations with Washington and the establishment has just created a different dynamic than we’ve ever seen before. … All of the criteria that we’ve used to evaluate candidates probably could be thrown out the window this year.”
A few days later, Hutchinson endorsed U.S. Sen. Marco Rubio of Florida for the GOP presidential nomination, saying it was “up to Arkansas to stop the Donald Trump show. The next generation of
conservatives cannot allow Donald Trump to take everything we stand for and throw it away.”
By March, with Trump winning Arkansas’ Republican primary, Hutchinson was saying he’d support Trump if he became the nominee.
By mid-June, after meeting with Trump, the governor said promoting conservative causes was more important than any difference he might have with the businessman, adding, “Anybody’s presidential who’s elected president.”
And by July, speaking before the Republican National Convention, Hutchinson proclaimed, “Donald Trump is the right leader for our time.”
The transition of President-elect Trump to President Trump continues with hardly less drama than the campaign: Calls are circulating for a congressional investigation of a Central Intelligence Agency assessment that Russian hacking was a deliberate effort to tip the election to Trump. Trump disagrees with the CIA’s findings.
The American electorate wanted change. We got it.
No. 2: Health Care in Transition
2016 was a rocky year for health care administrators in Arkansas, and though they worried about the future of Medicaid funding at the start of the year, they pushed forward with major construction projects throughout the state.
Uncertainty bedeviled the start of the year, with hospital administrators unsure if Arkansas’ hybrid Medicaid expansion plan, which had improved the bottom lines of their institutions throughout the state, would continue. Dan Rahn, chancellor of the University of Arkansas for Medical Sciences, warned in April that if the Medicaid expansion wasn’t funded, losses at UAMS could increase by tens of millions of dollars.
It all goes back to the Affordable Care Act, which, beginning in 2014, had expanded health insurance coverage in the United States. Although states had the option of expanding Medicaid using federal money, many states rejected that money. Arkansas, however, created the private option, which used federal Medicaid expansion money to buy private health insurance for Arkansans who earn too much for traditional Medicaid, but not enough to be eligible for federal tax credits on health insurance.
The federal government is paying for all of the cost of the expansion through 2016 and then will gradually decrease its share to 90 percent, leaving the state to pay 10 percent.
Gov. Asa Hutchinson’s plan, Arkansas Works, called for making modifications to the private option, but it still used federal money to buy insurance for the poor.
Arkansas Works faced two hurdles: The Legislature had to approve it in a special session. If it survived there, it then needed a supermajority vote of 75 percent in the state House and Senate in order to receive funding. It overcame both obstacles. Starting Jan. 1, the private option will be called Arkansas Works.
National politics, however, brings further uncertainty.
One of the many campaign promises President-elect Donald Trump made was that he would repeal and replace the Affordable Care Act, which he called a “total disaster.”
Across the country, monthly premiums for private insurance sold through government-run exchanges are ballooning an average of 25 percent starting in 2017. In Arkansas, the premiums on policies sold through the exchange to about 60,000 Arkansans are also climbing, an average 10 or 11 percent in 2017.
What’s more, several insurance companies have turned their backs on Obamacare, saying the exchanges are not profitable. In 2016, UnitedHealth Group said it wouldn’t sell insurance on the exchanges in 34 states, including Arkansas. And QualChoice Life & Health Insurance Co. of Little Rock is withdrawing coverage in certain counties in the state.
After November’s election, Hutchinson remained pragmatic. He said he would ask the Trump administration to approve even more changes to the Arkansas Works program, which covers more than 300,000 Arkansans, that the Obama administration had allowed.
Arkansas’ hospital landscape also was transformed in 2016. In September, the $150 million Baptist Health Medical Center-Conway began taking patients. And St. Bernards Medical Center in Jonesboro has started a four-phase, multiyear $130 million construction project.
In northwest Arkansas, Mercy Northwest announced in April it would spend $247 million over five years on projects that included expanding its Rogers campus and building clinics. Arkansas Children’s Hospital continued with its $167 million hospital project in Springdale, which was announced in 2015 and which is expected to open in January 2018. Washington Regional Medical System’s $65 million Women & Infants Center started taking patients in November.
Opening new facilities doesn’t necessarily mean profits will follow. In November 2015, CARTI opened its $88 million cancer center in west Little Rock. The nonprofit cancer treatment center experienced several one-time events that caused financial problems, and in 2016 it fell below the required debt-service coverage ratio on the $49 million bond issue that was used to build the four-story center. In September, Fitch Ratings Inc. of Chicago, which provides the credit rating for CARTI, lowered its rating on CARTI’s bond from BBB+ to BBB-, which is the lowest investment-grade rating. Fitch’s outlook remained negative.
No. 3 Big Projects Make the News
Steel in northeast Arkansas and wood in the southwest supplied raw material for big economic development news in 2016. Natural gas fueled big dreams in Pine Bluff.
Big River Steel began production at a $1.3 billion plant in March, planning to employ 425 workers eventually. State officials said 100 additional workers would be employed by businesses associated with the plant, the largest private investment ever in Arkansas. Nucor Corp. said it would add a $230 million cold mill to its Blytheville operations, predicting 100 new jobs and bringing Nucor’s payroll to about 1,800 area workers.
Meanwhile, nearly 250 miles away, officials announced plans for a $1.3 billion pulp mill near Arkadelphia expected to employ 250 workers by 2020. Shandong Sun Paper Industry of China will operate the plant, which is expected to pump up to $100 million a year into the economy, on 1,000 acres. As many as 1,000 additional jobs in the timber industry are expected in the plant’s supply chain.
What could be the state’s largest economic development endeavor ever is developing north of Pine Bluff. Energy Security Partners of Little Rock, led by Roger Williams and Arkansas figures Wesley Clark and Rodney Slater, plans a massive $3.5 billion plant for turning natural gas into diesel and jet fuel. A peak construction workforce of 2,700 and 225 long-term jobs are projected. The site was confirmed in September after the Jefferson County’s economic development team secured 1,100 acres with taxpayer money and leased the land to ESP, which is at work securing financing.
In October, Suzhou Industrial Park Tianyuan Garment Co., which makes clothing for Adidas, agreed to put a clothes factory in Little Rock, a $20 million commitment expected to bring 400 jobs. The project represents the first apparel company moving manufacturing from China to the United States, Gov. Asa Hutchinson said.
Intimidator Inc. of Batesville, which makes mowers and utility vehicles, revealed plans for a $12 million expansion to add 400 full-time employees over four years, giving it a workforce of more than 500. FMH Conveyors of Georgia hailed a $12.5 million material-handling factory in Jonesboro, creating 110 jobs.
Northwest Arkansas and the Fort Smith area were job-creation hotbeds, led by Mercy Northwest Arkansas’ announcement of a $247 million expansion and 1,000 new jobs by 2021 at its Rogers hospital and surrounding clinics. Simmons Foods Inc. of Siloam Springs planned to add 100 jobs at leased space in Fort Smith; Bekaert, maker of steel cord for tires, announced increased plant capacity for 100 new jobs; P.H. Glatfelter Co. announced a $12.5 million specialty paper and fiber facility, creating 83 jobs; and Elite Comfort Solutions said it would expand its production of flexible foam bedding and cushions in Fort Smith, adding 100 workers. Shared Services Center-Fort Smith, which supplies business office support in health care, also said it would add 100 jobs.
In the Little Rock area, an American Airlines subsidiary, Envoy Air Inc., said it would bring 60 new jobs to a $2 million aircraft maintenance facility; FedEx marked the grand opening of a 303,000-SF ground facility employing 175 people; and Sig Sauer Inc. finalized plans to move its Elite Performance Ammunition manufacturing to Jacksonville from Kentucky, creating 50 full-time jobs with more promised later.
No. 4: A Wild Ride For Energy
2016 was a roller-coaster year for the state’s energy industry, with fossil fuel companies seeking to rebound and clean energy projects on the upswing.
But since the presidential victory of oil-coal-and-gas-friendly Donald Trump and an OPEC decision to cut production, oil and gas prices have rallied.
As the year began, natural gas was swooning in Arkansas as a supply glut devastated prices and brought drilling to a virtual halt. Production plunged after a 10-year boom, and state severance tax collections fell by half.
Murphy Oil Corp. of El Dorado reported a 2015 net loss of $2.27 billion in January, and later froze top salaries. Layoffs came on top of 2015 job reductions, and dividends were cut. A sale of Canadian assets brought a second-quarter profit, and third-quarter losses moderated. Murphy’s retail fuel spinoff, Murphy USA, fared better, with its stock rising to near $70 a share in December, up from $60.78 on Jan. 4.
In February, Energy Security Partners, led by Roger Williams and Arkansans Rodney Slater and Wesley Clark, proposed a Jefferson County site for a $3.5 billion plant for turning natural gas into liquid fuel. Williams confirmed the site 10 miles north of Pine Bluff in September and said pre-engineering for the project, which would be the state’s largest economic development endeavor ever, has begun. He predicted he would have financing of “$100 million by the first of the year or early 2017.”
Arkansas’ solar-energy industry faced a crossroads. The Public Service Commission is reviewing rules for utility customers who produce their own power, with rate and rebate recommendations due from utilities, environmentalists and consumers by September 2017. Meanwhile, the state’s largest solar array went online in East Camden in March, supplying defense contractor Aerojet Rocketdyne and giving Ouachita Electric Cooperative Corp. a cushion for peak demand. Other cooperatives initiated smaller solar facilities, and Entergy Arkansas says a large field near Stuttgart could deliver power within two years. Scenic Hill Solar of Little Rock, led by former Lt. Gov. Bill Halter, and L’Oreal announced a multimillion-dollar deal to install 4,000 solar panels at the cosmetics giant’s factory in North Little Rock and 5,000 more on the roof of a Kentucky plant.
The Plains & Eastern Clean Line, a nearly $2 billion project to transmit Oklahoma wind power across Arkansas, advanced with federal approval in 2016 after an earlier state rejection and opposition from lawmakers in Washington. But the project faces a court challenge from opponents who allege the misapplication of federal power and an intrusion on local authority. Opponents also fear environmental damage and falling property values. U.S. Sens. John Boozman and Tom Cotton, as well as Rep. Steve Womack, are set to fight the power line anew after Trump’s inauguration.
Changes in Washington could also kill moves to shut down two coal-fired power plants owned by Entergy. The Sierra Club sought the shutdowns in February to meet Environmental Protection Agency clean air rules. Instead, Entergy plans to close the plants, in Jefferson and Independence counties, by 2028. Trump campaigned on curtailing the EPA’s power.
No. 5: Medical Marijuana Gets Voters’ OK
Arkansas became the 29th state and the first in the Bible Belt to approve the sale and use of marijuana for medicinal purposes.
Arkansas voters approved Issue 6, the Arkansas Medical Marijuana Amendment, on Nov. 8 by a margin of 53 percent to 47 percent. Another medical marijuana proposal, Issue 7, the Arkansas Medical Cannabis Act, was struck from the ballot by the Arkansas Supreme Court in late October for not having enough qualified signatures for the voter-initiated proposal.
The amendment passed despite opposition that included Gov. Asa Hutchinson, a former director of the federal Drug Enforcement Administration, and the Arkansas State Chamber of Commerce.
A medical marijuana proposal on the 2012 ballot had been narrowly defeated by Arkansas voters.
Hutchinson said he wouldn’t try to block the program’s implementation and designated $3 million of state funds to fund the startup.
The 2016 amendment calls for medical marijuana to be overseen by three government agencies: the Department of Health sets the guidelines for qualifying conditions and patients and the patients’ caregivers, the Medical Marijuana Commission will grant licenses to dispensaries and cultivation facilities, which will then be regulated by the Alcohol Beverage Control Division.
Hutchinson, President Pro Tempore of the Senate Jonathan Dismang and Speaker of the House Jeremy Gilliam named representatives to the commission on Dec. 7.
Hutchinson named Little Rock oncologist Dr. Ronda Henry-Tillman, who was designated chairwoman of the commission; Dismang named pain management specialist Carlos Roman of Little Rock and Dismang’s former chief of staff, James Miller of Bryant, while Gilliam named pharmacy executive Stephen Carroll of Benton and attorney Travis Story of Fayetteville.
The three agencies have until March 9 to announce their rules for running the medical marijuana program. The commission will begin accepting applications for dispensary licenses by June 1.
Hutchinson said he preferred that the dispensary and grower licenses be awarded through a lottery system similar to the way the state awards alcohol permits. He said that would prevent large companies from dominating the new industry.
State Rep. Doug House filed a bill that would postpone the agencies’ rules deadline until May and the start of dispensary applications until July 1.
The state Legislature has the authority to alter the amendment by a two-thirds vote if, according to the amendment, the changes do not affect the legalization of medical marijuana or the number of dispensaries created.
State Sen. Bart Hester said he is considering a bill to raise additional taxes on marijuana sales to offset his proposed $105 million tax cut.
No. 6: NWA Back to Boom Times
At the 22nd annual Business Forecast Luncheon in January 2016, Kathy Deck said northwest Arkansas was the economic star of the state.
The region added nearly 5,000 jobs in 2015 and Deck predicted it would add another 5,000 in 2016. While the exact statistics of 2016 haven’t been tabulated, it looks like it was another stellar year for northwest Arkansas, as Deck predicted.
“It continues to be nothing short of amazing,” said Deck, the director of the Center for Business & Economic Research at the University of Arkansas at Fayetteville. “The northwest Arkansas economy is very dynamic and it’s huge.”
According to the Arkansas Department of Workforce Services, unemployment in northwest Arkansas was less than 3 percent in September. The national rate was 5 and the state’s rate was 4 percent.
Most of the other economic metrics look strong.
Construction continues to be vibrant in the region. Commercial permits for Benton and Washington counties, the backbone counties of the area, amounted to $206.5 million in the first half of 2016. That figure is more than all of 2015, which had a total of $188 million. The first half of 2015 had $75.2 million in commercial permits; the first half of 2016 saw almost three times that total.
There were numerous big-ticket builds planned or put into construction in 2016. The region’s medical community was at the forefront with multimillion-dollar expansions announced or completed by Mercy Northwest Hospital, Arkansas Children’s Hospital and Washington Regional Medical Center. Hospitals are feeling the need to expand to better serve the area’s growing population.
That need to expand continues to be felt in northwest Arkansas’ residential segment, which has recovered to its prerecession levels. In Arvest Bank’s Skyline Report, there were nearly 1,600 residential building permits issued in the first half of 2016, an increase of 15 percent from the same period of 2015 in Benton and Washington counties. More than 4,300 homes were sold in the first six months of the year, an increase of 16 percent compared with the same span in 2015.
Construction of multifamily units continues strong in northwest Arkansas, thanks to a vacancy rate of just 2.4 percent in the first half of 2016. Fayetteville has three projects totaling nearly 1,110 units under construction, while Rogers and Bentonville have more than 800 under construction.
“If Little Rock is screaming hot, northwest Arkansas is screaming hot squared,” said Jerry Webster, president of Little Rock’s Webster Corp., an apartment broker.
No. 7: Infrastructure Landscape Changing
The central Arkansas infrastructure landscape has been in flux this year, with the Broadway Bridge closing, Robinson Center opening, interstate work and a few smaller public projects.
The bridge, which crosses the Arkansas River and connects Little Rock and North Little Rock, closed Sept. 28. The Arkansas Highway & Transportation Department’s $98.4 million plan is to replace the aging structure in six months.
The Robinson Center in Little Rock comes in at a close second to the bridge in being the most noticeable change. Its 28-month, $68.6 million renovation and expansion concluded Nov. 10.
Funded by a 2 percent advertising and promotion tax, the project included:
• A new ballroom and outdoor terrace overlooking the river;
• A complete reorganization of the back-of-house support areas;
• Performance hall improvements, including more acoustic volume, improved sight lines, bigger lobby spaces and restroom facilities and new box seating along the side walls; and
• Restoration of the building’s exterior.
Also completed this year were improvements to Interstate 40 between Conway and North Little Rock. The 22-mile, $117 million project took about four years and ended in April.
But little progress has been made on the $630.7 million project to expand the Interstate 30 corridor, including its bridge over the Arkansas River. A public meeting was held in April to present two plans: an eight-lane general purpose proposal and a six-lane with four collector/distributor lanes. Also proposed is moving the Cantrell Road interchange that brings drivers from I-30 into downtown Little Rock south to Fourth and Sixth streets.
The next step is for the plans to be honed and for a no-build alternative to be analyzed. The estimated construction timeline is 2018-22.
Other central Arkansas building and development news includes the Little Rock Technology Park’s nearly $7 million worth of phase 1 renovations. The Tech Park announced this month the first tenants moving into its permanent offices at 415 and 417 Main St., set to open March 1. The $100 million project will entail more than 600,000 SF spread over five phases; voters passed a half-cent sales tax in 2011 to provide $22 million for it.
In addition, a $6.2 million federal grant was awarded to the Little Rock Port Authority in August, a grant that will be used to add a new dock with direct dock-to-rail capability and new rail storage at the port’s Slackwater Harbor. That is expected to cost $10 million and take two years.
And in September, the Clinton National Airport learned it was getting a $5.9 million Federal Aviation Administration grant to help it improve 2,500 feet of the pavement of Taxiway A at Adams Field.
In the education sector are four schools that ranked among the state’s largest commercial building projects: the nearly complete $95.3 million North Little Rock High School; Robinson Middle School and Mills High School in Little Rock, weighing in at $37.6 million each; and the $33.3 million Pinnacle View Middle School in Little Rock.
No. 8: Bank Consolidation Continues
Bank consolidation was the biggest business story of 2015 and it continued into 2016, with some of the biggest banks in the state and some of the smaller getting in on the action.
Publicly traded Bank of the Ozarks in July overtook privately owned Arvest Bank as the largest bank chartered in Arkansas by completing two big bites that were announced in late 2015: an $800 million deal to buy Community & Southern Bank of Atlanta and the $402.5 million purchase of C1 Bank of St. Petersburg, Florida.
As of Sept. 30, BOZ’s total assets topped $18.4 billion, while Arvest, which hasn’t made an acquisition since 2013, reached $17 billion.
Centennial Bank, owned by publicly traded Home BancShares Inc. of Conway, remained a distant third at the end of the third quarter, with $9.75 billion in assets. But two more Florida acquisitions announced in the fourth quarter — Landmark Bank of Fort Lauderdale and Bank of Commerce of Sarasota — will add some $670 million in assets and allow Centennial to “crawl over $10 billion,” in the words of Chairman John Allison.
Simmons Bank, which converted to a state bank charter in April, acquired Trust Co. of the Ozarks of Springfield, Missouri, in February and then in September completed the acquisition of a Tennessee bank, Citizens National Bank of Athens.
Another Tennessee acquisition announced in the fourth quarter, First South Bank of Jackson, and Simmons’ biggest yet — a $564 million deal for $2.47 billion Bank SNB in Stillwater, Oklahoma, revealed last week — will combine to bring its assets above $10 billion as well.
Bear State Bank of Little Rock, the smallest of Arkansas’ four publicly traded banks with $2 billion in assets as of Sept. 30, acquired Metropolitan National Bank of Springfield, Missouri, in February.
Bear State also converted from a national to a state charter in 2016, as did Anstaff Bank of Green Forest. As the year draws to a close, the $444 million Anstaff Bank has applied to merge in $125 million Twin Lakes Community Bank, which Anstaff’s parent company, First National Bancorp Inc., acquired at the end of 2015.
Two more announced acquisitions were pending in December:
• First Community Bank of Batesville’s all-stock acquisition of Little River Bank in Lepanto; and
• Central Bank of Little Rock’s acquisition of Pinnacle Bank of Rogers.
And two small Arkansas bank charters disappeared completely in 2016:
• Allied Bank of Mulberry, $66 million in assets as of June 30, was shut down in September by bank regulators, who arranged an emergency acquisition by Today’s Bank of Huntsville, pushing its assets to $184 million as of Sept. 30.
• Community First Bank of Harrison, $469.5 million in assets as of Sept. 30, was acquired in November by $1.5 billion Equity Bank of Andover, Kansas.
No. 9: Goodsons’ Legal Controversies
Class-action attorney John Goodson of Texarkana and his wife, Arkansas Supreme Court Justice Courtney Goodson, dominated legal news in Arkansas in 2016.
John Goodson, a member of the University of Arkansas board of trustees, was sanctioned in August along with other attorneys for abusing the federal court system in a controversial class-action strategy first reported by Arkansas Business in December 2015.
Media attention to the case may have changed the way class-action cases are handled, and media attention to judicial elections — including Courtney Goodson’s unsuccessful run for a promotion — could change the way state Supreme Court justices are chosen in the future.
In January, weeks before voters statewide chose between Justice Goodson and Circuit Judge Dan Kemp of Mountain View to become the state’s chief justice, a three-part series in the Arkansas Democrat-Gazette examined the role of financial contributions to judicial campaigns and the appearance of favoritism shown by the state Supreme Court to a handful of law firms specializing in class-action cases. It found that John Goodson, his law firm and five out-of-state law firms were among the biggest campaign donors.
“Dark money” — spending on advertising by groups that can shield the identity of donors — favored Kemp, the ultimate victor. The influence of identified and unidentified donors contributed to a debate about whether popular elections are the best way to choose appellate judges, a system that Gov. Asa Hutchinson was already concerned about.
In November, the Arkansas Bar Association completed its draft of a proposed constitutional amendment to appoint justices to the state Supreme Court rather than have them elected.
Meanwhile, John Goodson’s method for litigating class-action cases was again being picked apart. U.S. District Court Judge P.K. Holmes III, the chief federal judge for the Western District of Arkansas, learned from Arkansas Business that a case that had been in his courtroom was dismissed in 2015 only to be refiled the next day in state court. (An earlier strategy that Goodson’s firm and others used to generate hundreds of millions of dollars in settlement fees was found to be illegal by the U.S. Supreme Court in 2013.)
Holmes said he never would have approved the settlement, which called for the plaintiffs’ attorneys to quickly receive $1.85 million while thousands of victims had to complete a claims process so onerous that, in the end, only 4 percent filed claims amounting to less than $300,000.
Holmes ordered 17 attorneys involved in the case to explain why they shouldn’t be sanctioned for abusing the court system, a step so rare that it drew attention from newspapers and legal publications nationally.
In August, Holmes reprimanded John Goodson and four other attorneys after finding bad faith and abuse of the court system in their manipulation of the case. Ten other attorneys were found to have abused the judicial process, but their misconduct didn’t rise to the level of bad faith, Holmes said, so they were not sanctioned.
The attorneys’ appeal of Holmes’ order is pending with the 8th Circuit.
The attention that the case has received is expected to make life harder for plaintiffs and attorneys as other judges have now been alerted to their techniques. One law professor said Holmes’ finding is likely to deter plaintiffs’ attorneys and defense attorneys from bailing out of federal court and filing in state court in the hope of getting better results.
Also in 2016, Arkansas Business reported that out-of-state attorneys recommended by John Goodson were given a no-bid contract by state Auditor Andrea Lea for a contingency fee nearly twice as high as other states have committed to pay in pursuit of unredeemed U.S. Treasury bonds that belonged to Arkansans. Goodson contributed to Lea’s campaign for office in 2014.
No. 10: White-Collar Crime
The land of fraud remained a popular domain for denizens of the private and public sector alike during 2016. A calendar sampling of white-collar crimes that generated federal prison time includes:
Jan. 8: Brenda Blair, 48, of Gentry is sentenced to 28 months after waiving indictment and pleading guilty to one count of wire fraud. Blair bilked Tyson Foods of more than $550,000 through illegal benefit payments.
Jan. 28: Dennis Smiley Jr., 52, is sentenced to eight years and a month for bank fraud. The former Arvest Bank executive pleaded guilty to a single count of bank fraud in connection with $5.3 million he obtained from 23 Arkansas lenders through forged signatures and fraudulent collateral.
Feb. 26: Alberto Solaroli, 61, is sentenced to 12 months and one day for money laundering and ordered to pay $120,000 in restitution. That represented a sweet plea deal after a grand jury penned a $1.5 million loan fraud indictment against him for ripping off Little Rock’s One Bank & Trust.
June 29: Andrew Melton, 69, is sentenced to seven years for using hundreds of thousands of dollars from ThermoEnergy Corp. to pay personal expenses. The former chief financial officer of the company was convicted of 12 counts of mail fraud and five counts of failure to remit $1.9 million in payroll taxes to the IRS.
July 25: Little Rock Dr. Robert Barrow, 63, is sentenced to two years for conspiring to commit health care fraud. Barrow swindled $680,000 from Arkansas Blue Cross & Blue Shield and more than $32,000 from dozens of patients.
Sept. 13: Dawn de Brantes, 48, is sentenced to 90 months for investment fraud conspiracy and tax fraud conspiracy. Daniel C. Olivares, her 34-year-old stepson, is sentenced to two years for investment fraud conspiracy.
The Clarksville pair were part of the ZeekRewards online Ponzi scheme, where she was chief operating officer and he was senior technology officer.
Oct. 5: Final sentencing for all three embezzlers at First National Bank of Lawrence County concluded with each defendant receiving 51-month sentences. Peggy Sutton, 61; Brenda Montgomery, 57; and Cindy Tate, 57; admitted to stealing more than $3.9 million from the Walnut Ridge bank during the course of a 10-year conspiracy.
Oct. 27: Ted Suhl, 51, is sentenced to seven years after his July conviction on two counts of fraud and bribery. The case involved Suhl using charitable donations to a West Memphis church to disguise payoffs to benefit his business ventures, which provided behavioral health services for youths.
Much of the money flowed through the 15th Street Church of God in Christ to Phillip W. Carter, 47, with a portion passed on to Steven B. Jones, 51, who both were sentenced in February after making plea deals.
Jones, a former deputy director of the Arkansas Department of Human Services and a former state legislator, was sentenced to two years and six months. Carter, 47, a former probation officer in Crittenden County and a former West Memphis City Council member, was sentenced to two years.