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Arkansas Board of Corrections to probe changes to special counsel contract

The Arkansas Legislature wrapped up a three-day special session focused on Gov. Asa Hutchinson's tax cut proposal on Thursday.
Michael Hibblen
Little Rock Public Radio
The Arkansas State Capitol.

From the Arkansas Advocate:

Arkansas’ prison board will investigate when and how changes were made to a legal contract without the knowledge of state procurement officials.

State legislators, prison leaders and financial officials were perplexed Tuesday about unusual language inserted into an agreement between the Arkansas Department of Corrections/Board of Corrections and the Hall Booth Smith law firm that could subject the state to liability.

State Procurement Director Ed Armstrong discovered the addition in the middle of a legislative meeting, prompting the prison board to commit to investigating who made the changes to the agreement and when.

A request that the Arkansas Legislature ratify the $207,000 contract with the law firm and attorney Abtin Mehdizadegan — which began in December amid the legal fight between the board and Gov. Sarah Huckabee Sanders and Attorney General Tim Griffin — was shelved for the time being.

Armstrong told lawmakers that the changes to the contract presented a host of concerns, including waiving the state’s immunity from lawsuits and binding the state to a court ruling that could be overturned in the future.

Tracking how the contract changed over time

1) The initial version of the contract drafted by state procurement officials had very little narrative and three attachments.

2) Attorney Abtin Mehdizadegan said he made some additions to the version of the contract he signed before returning it for Board of Corrections Chairman Benny Magness’ signature to reflect the board’s legal disagreements with other state officials.

3) The final version of the contract with Magness’ and Mehdizadegan’s signatures was presented to a legislative panel on Tuesday.

There were concerns at Tuesday’s meeting about potential criminal violations if changes were made to the agreement after it had been signed by Board of Corrections Chairman Benny Magness, who said he wasn’t sure whether the additions were included when he signed the contract earlier this month.

Reached by the Advocate after Tuesday’s meeting, Mehdizadegan said that he made the changes to the contract before it was signed by Magness, and he provided a copy of the contract with the changes and only his signature.

The changes, he said, were made to reflect the ongoing differences in opinion between the prison board, lawmakers and executive branch officials over the independence of the Board of Corrections under the Arkansas Constitution and state law.

“I believe this approach was reasonable,” Mehdizadegan said in a text message to the Advocate. “I left the handwriting, etc. [to] specifically identify that a proposed term was altered, and I expected that the procurement manager would advise me if those proposed changes were problematic.”

The changes were apparently never noticed by Magness or the department’s procurement officials, who told the Arkansas Legislative Council’s Review subcommittee that they weren’t aware of them until Tuesday’s meeting.

Mehdizadegan and his firm have been representing the prison board in litigation since December, but so far, the board hasn’t been able to pay the more than $135,000 legal bill, due to state financial officials’ opinion that the agreement wasn’t properly procured.

That has left the board with the option of seeking the Legislature’s retroactive approval of the agreement. Absent that approval, the law firm’s only recourse for seeking payment would be to go through the state Claims Commission.

While both cases litigated by Mehdizadegan for the board are being appealed to the Arkansas Supreme Court, a lower court judge in the first case blocked a pair of new state laws, which the board argued usurped its authority over state prisons by putting the state corrections secretary under the governor rather than the board.

Another circuit judge dismissed a Freedom of Information Act lawsuit against the board filed by the attorney general.

Those disputes grew out of an impasse over temporary prison beds. With that disagreement behind them, the conflict has morphed into a broader debate about who has the ultimate authority over the Department of Corrections — the board or the governor?

In some ways, Tuesday’s dustup over the legal contract is a continuation of that dispute.

Procurement problems

Lawmakers spent the bulk of Tuesday’s hearing questioning Magness and Department of Corrections staff about the process for hiring the Hall Booth Smith firm.

Under questioning, Magness told the committee that the firm was retained on the advice of board member Lee Watson and that no competitive bidding process had occurred. Further, he told lawmakers the board hadn’t voted to approve the contract presented on Tuesday.

He admitted that the board had not followed procurement law.

“We made an error, there’s no question about it,” Magness said. “That’s why we’re here.”

State Sen. Jonathan Dismang, R-Searcy, urged Magness to pull back the contract and investigate further.

“I think you’ve been taken for a ride, and the state of Arkansas has been taken for a ride by someone who was going to manipulate documents before or after your signature,” Dismang said. “I think you’ve been taken advantage of.”

Mehdizadegan defended his firm’s work on behalf of the board, noting that its efforts have been successful and that he expects to win the appeals.

He also said there is disagreement with procurement officials over the board’s authority to enter a special counsel agreement in unique circumstances under Arkansas Code Annotated § 25-16-711, which for now has been affirmed by Circuit Judge Patricia James.

He said that tweaks to the contract’s language about the state’s sovereign immunity were added because A.C.A. 25-16-711 could be read as a waiver of immunity by the state.

“But as I’ve maintained, we will attempt to cooperate in good faith with this process, without waiving any legal arguments that might apply, and then wait for the courts to sort out the rest if we can’t get it resolved now,” Mehdizadegan said.

Meanwhile, lawmakers want the prison board to report back soon.

Deputy Editor of Arkansas Advocate, which is part of States Newsroom, a national nonprofit news organization, supported by grants and a coalition of donors and readers. The Advocate retains full editorial independence.