FORT SMITH — State Sen. Jake Files’ Fort Smith company FFH Construction received an $80,000 wire transfer in November 2014 from an Arkansas health care executive, one week after Arkansas Senate Joint Resolution 1 was filed to amend the Arkansas Constitution concerning civil claims and court procedures.
David L. Norsworthy of Arkansas Superior Select wired $80,000 to FFH Construction on Nov. 24, 2014, according to a First National Bank document not labeled confidential and recently provided to the Times Record. The document was part of discovery in a local lawsuit against FFH Construction.
Senate Joint Resolution 1 was filed Nov. 17, 2014, as a measure to limit punitive damages in lawsuits. That measure ultimately died in committee. A similar attempt to limit civil suits was revived with a petition but failed to reach a public vote as Issue 4 last year when the Arkansas Supreme Court took it off the ballot. However, a similar effort called Senate Joint Resolution 8, which Files is a co-sponsor on, will be up for a vote in November 2018 as a proposed constitutional amendment.
When asked about the financial document showing the $80,000 wire transfer, Files, R-Fort Smith, emailed a protective order. However, the order states “any documents that have been or may be designated as ‘Confidential’ shall be so designated by stamping the documents with the label ‘Confidential’ in a manner that does not interfere with the legibility of the document…” The document has no signs of being stamped “Confidential.”
Norsworthy did not respond to calls Wednesday and Thursday. Files would not go on the record with a response, and simply provided the protective order, which is dated March 10, 2015.
The protective order was issued about one month before Files received a $30,000 loan from lobbyist Bruce Hawkins. The loan surfaced in October 2015. It was not illegal at that time, though, for a legislator to receive a loan from a lobbyist. But Act 1108, which passed in April of this year, made it against the law.
State Sen. Keith Ingram, D-West Memphis, helped draft the bill that became Act 1108. He said by phone Wednesday that he did not write the law in direct response to Files’ loan from Hawkins.
“What he did was permissive,” Ingram said of the Hawkins loan.
Ingram also said with ethics rules being an “evolution,” he is “sure” it will come up again in the next session. If someone spends more than than $400 in a quarter on a legislator they have to register as a lobbyist, Ingram added.
Ingram also talked about the General Assembly being a “citizen legislature” made up of a wide array of professionals. And he feared that the body is moving away from that format.
The “flip side” of this unregistered “lobbyist” issue, Ingram said, was the notion that rules would “make it so hard that good people won’t want to run for office.”
“You have to be very careful,” Ingram added. “For example, what if I have a friend who was a banker who gave me a loan and I’m on the Insurance and Commerce?” Would that be a violation, he wondered.
Ingram said he was not in a position to say if the $80,000 wire transfer to FFH was unethical or not.
Norsworthy is part-owner in over a dozen nursing homes in Arkansas with Michael Morton, a Fort Smith businessman with ties to former central Arkansas circuit judge Michael Maggio. Maggio had reduced a judgment against Greenbrier Nursing and Rehabilitation Center from $5.2 million to $1 million after its owner, Morton, donated about $24,000 to Maggio’s campaign. Morton was not charged with a crime.
Maggio was sentenced to 10 years in prison March 2016, the maximum possible sentence for reducing a jury award in exchange for a bribe.
The latest proposed amendment would cap punitive damages at three times the compensatory damage awarded each claimant, with an exception created for intentional conduct. Legislators could vote to increase the cap with a two-thirds vote.
Second, it would cap non-economic damages like death and quadriplegia at $500,000 per claimant.
Third, it would cap lawyers’ contingency fees at one-third net of the total judgment. Finally, it would give legislators the final say in various rules for the courts and the Arkansas Supreme Court, a provision included because supporters say the court otherwise could just ignore the rest of the amendment.