What happens in Arkansas does not stay in Arkansas.  Or at least not when federal prosecutors from the Department of Justice’s Public Integrity Section get involved.

A recent sentencing from Arkansas highlights the many options in DOJ’s toolkit to pursue “state-level” misconduct involving public officials.  In the case of former state senator Jeremy Hutchinson, DOJ obtained a “global” guilty plea for misconduct charged in three separate district courts.  The court sentenced Hutchinson to 46 months incarceration. 

According to the Government’s sentencing memorandum, Hutchinson accepted over $157,500 from the owner of an orthodontic clinic in exchange for advancing favorable legislation to deregulate the state dental industry.  The bribes masqueraded as payment for legal retainers, according to the Plea Agreement.  In addition, Hutchinson:

commingled campaign contributions and donations with his own personal funds and misappropriated and converted campaign funds for his own personal use, including, but not limited to, using campaign funds for a vacation, hotel stay, travel expenses, groceries, a gym membership, and jewelry.

Then, having misappropriated nearly $67,000 of state campaign funds, Hutchinson “materially underreported his gross receipts on his tax returns” for several years.  For these offenses, Hutchinson pleaded guilty to conspiracy to commit bribery and willfully filing a false tax return. 

As these charges illustrate, even where a defendant’s wrongdoing occurs at the state-level, implicates state officials, or involves state campaign finance issues, federal prosecutors nevertheless possess several statutory options to aggressively pursue misconduct.  Although not a new trend, federal enforcement actions involving state or local wrongdoing present significant risks for entities and individuals involved in state-level campaign giving, lobbying, and other political activity.

Hutchinson’s conduct extended beyond the facts described above.  In another, separate case pending sentencing in the Western District of Missouri, Hutchinson pleaded guilty to participating in what DOJ has described as “a multimillion-dollar public corruption scheme that involved embezzlement, bribes, and illegal campaign contributions for elected public officials.”  As in the other case, this scheme apparently also involved bribes that Hutchinson and others disguised (unsuccessfully) as lawfully provided legal services.  Furthermore, the defendants used a state-registered nonprofit organization to engage in “lobbying and political advocacy, political campaign contributions, and offering and giving money and other things of value to public officials for unauthorized, unjustifiable, and wrongful purposes” in violation of state law.  DOJ has obtained guilty pleas from several defendants and a Non-Prosecution Agreement from a state nonprofit that agreed to pay $8 million in forfeiture and restitution to the federal government.

Both prosecutions exemplify how DOJ can and often will enter the scene even when state criminal charges are available to address corrupt conduct, where certain factors are present, such as unethical behavior involving public officials.  Although in Hutchinson’s case the government described his behavior as “egregious,” the unwitting and the unwary can easily be swept up in an investigation or prosecution.  For this reason, companies, organizations, and people engaging in politics at the state level should proceed with an understanding of applicable laws and regulations, and obtain legal advice for any questions that arise.   

Tags: Arkansas, bribery, Department of Justice, enforcement, Public Intergrity Section
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Photo of Peter Koski Peter Koski

Drawing on his experience as a senior DOJ official and leading international anti-corruption practitioner, Peter Koski represents companies and individuals in sensitive, high-stakes government and regulatory enforcement matters and internal investigations.

Peter has a depth of experience investigating, bringing to trial, and handling…

Drawing on his experience as a senior DOJ official and leading international anti-corruption practitioner, Peter Koski represents companies and individuals in sensitive, high-stakes government and regulatory enforcement matters and internal investigations.

Peter has a depth of experience investigating, bringing to trial, and handling on appeal complex white collar matters involving the public and private sectors. He has handled an array of matters relating to foreign and domestic corruption, business and human rights, supply chain sourcing, cyber security, and violations of the federal laws governing elected and appointed officials. He has particular experience defending clients against alleged violations of the Trafficking Victims Protection Reauthorization Act (TVPRA), the Food, Drug, and Cosmetic Act (FDCA), and the Federal Election Campaign Act (FECA), as well as conspiracy, honest services fraud, bribery, gratuities, money laundering, obstruction of justice, and conflicts of interest.

Prior to joining the firm, Peter served as Deputy Chief of the U.S. Department of Justice’s Public Integrity Section, where he helped manage a team of over 30 attorneys responsible for investigating and prosecuting corruption across the country. In this capacity, he also argued complex constitutional issues before the federal courts of appeal. In over a decade of service in the Justice Department, Peter partnered with numerous U.S. Attorney’s Offices and worked closely with senior officials at over 25 federal agencies. Peter has tried over two dozen bench and jury trials, appeared in court in over a dozen districts across the country, and has handled corruption matters on five continents.

While in the U.S. Government and at Covington, Peter has worked closely with multilateral organizations, such as the Organisation for Economic Co-operation and Development (OECD). His previous experience with the OECD included serving as the U.S. representative on the Anti-Corruption Network Law Enforcement Advisory Board and the Advisory Group for the Anti-Corruption Network for Eastern Europe and Central Asia Thematic Review on Criminalization of Corruption.

Relying on this experience, Peter works with clients to develop effective due diligence programs related to sourcing and supply chains. He also analyzes the impact of regulator activity in this space, and develops strategies for engaging directly with regulators and NGOs. In this capacity, he helps companies assess the impact of Withhold Release Orders and counsels clients on the statutory regimes related to human rights and global supply chain issues.

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Photo of Robert Lenhard Robert Lenhard

Robert Lenhard has helped guide decision makers in corporations, trade associations, and advocacy groups on complying with the laws regulating political activity for over 20 years. As a senior member of the firm’s Election and Political Law Practice Group, he provides compliance advice…

Robert Lenhard has helped guide decision makers in corporations, trade associations, and advocacy groups on complying with the laws regulating political activity for over 20 years. As a senior member of the firm’s Election and Political Law Practice Group, he provides compliance advice relating to federal and state campaign finance, lobbying, pay-to-play, and government ethics laws. As an advocate, counselor, and regulator, Mr. Lenhard brings a depth of experience on matters that involve legal as well as political risk.

Bob led Covington’s representation of the Biden for President campaign, the Super PAC supporting President Obama’s re-election, as well as several prominent professional sports leagues, pharmaceutical manufacturers, technology companies, advocacy groups, and trade associations.

Prior to joining the firm in 2008, Mr. Lenhard served as Chairman of the Federal Election Commission (FEC) in 2007 and Vice Chairman of the agency in 2006, during which time the agency handled over 10 major rulemakings, had among its most productive years in enforcement and audit, and adopted several reforms to the enforcement process. Mr. Lenhard also led the Presidential Transition Team that reviewed the FEC for the incoming Obama administration in 2008-2009.

Mr. Lenhard is frequently quoted in the press, has lectured at major law schools, and Before his service to the FEC, Mr. Lenhard provided legal advice to labor organizations active in the political process at the federal, state, and local levels. Mr. Lenhard also was involved in litigation in the Florida trial and appellate courts over the counting of absentee ballots in Seminole County, Florida in 2000.

Robert Lenhard is a member of the firm’s Election and Political Law Practice Group and advises corporations, trade associations, not-for-profit organizations, and high-net-worth individuals on compliance with federal and state campaign finance, lobbying, and government ethics laws.

Mr. Lenhard routinely assists clients in establishing and operating federal and state PACs, compliance programs associated with campaign finance and pay-to-play laws; advises advocacy groups and their donors; conducts compliance trainings and audits of federal and state lobbying and political programs; and counsels clients on compliance with congressional gift and travel rules. According to Chambers, sources report: “He is strategic and always sees the big picture. He is a great person who provides excellent non-legal counsel as well.”

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Photo of William Sokolove William Sokolove

William Sokolove is an associate in the Congressional Investigations, Election and Political Law, and White Collar Defense and Investigations Practice Groups. He advises clients cooperating with and responding to high-profile investigations before Congress and the Department of Justice that entail significant legal and…

William Sokolove is an associate in the Congressional Investigations, Election and Political Law, and White Collar Defense and Investigations Practice Groups. He advises clients cooperating with and responding to high-profile investigations before Congress and the Department of Justice that entail significant legal and reputational risks. He is familiar with each phase of the investigatory process, including preparing for congressional hearings and responding to subpoenas and requests for documents.

William is an active member of the Firm’s LGBT+ Affinity Group and maintains a robust pro bono practice. He has significant experience litigating on behalf of tenants facing eviction.

Prior to joining the Firm, William was a law clerk on the Senate Judiciary Committee and worked on successful congressional and state attorney general campaigns.

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