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FBI investigates local attorney John Goodson, according to testimony at pre-trial hearing of a former Arkansas senator accused of fraud

FBI investigates local attorney John Goodson, according to testimony at pre-trial hearing of a former Arkansas senator accused of fraud

Goodson says there is no investigation

June 12th, 2019 by By Linda Satter / Arkansas Democrat-Gazette in Texarkana News

University of Arkansas System Board of Trustees board member John Goodson is shown during a board of trustees meeting on Sept. 7, 2016, in Little Rock.

Photo by Staton Breidenthal / Arkansas Democrat-Gazette

A laptop computer that former state Sen. Jeremy Hutchinson says was illegally searched by the FBI, tainting a fraud case against him and justifying its dismissal, actually belonged to his former girlfriend, who authorized the agency to search it, she testified Tuesday.

Julie McGee, whom Hutchinson, 45, has accused of stealing the device from him before turning it over to authorities, was the prosecution's first witness on Tuesday, the second day of a pretrial hearing before U.S. District Judge Kristine Baker. When the hearing concluded in late afternoon, Baker said she will issue a written ruling on Hutchinson's motion to dismiss the charges or suppress the information obtained through the laptop.

Hutchinson's jury trial on wire-fraud and tax-fraud charges is scheduled to begin July 8.

On Aug. 24, 2012, McGee took two laptops, two mobile phones and a computer hard drive to the FBI, saying there was likely proof on some of the devices that her on-again, off-again boyfriend, Hutchinson, had been using campaign-finance funds to further their relationship and was accepting money from attorney John Goodson of Texarkana in return for legislative favors, Agent James Coleman testified Monday.

Coleman said McGee urged him to look at photos, emails and saved text messages to corroborate her allegations. He said he submitted the items to the agency's computer analysis unit, but eventually returned them to McGee after pushing the case to the "back burner" because McGee was hard to reach by phone and didn't show up for meetings. Coleman was later transferred from the agency's white-collar crime squad to its bomb unit.

Another FBI agent, Mike Lowe, testified Tuesday that he took over the case file on May 9, 2013. He said a criminal investigation into Hutchinson and Goodson officially began that day, after political consultant and media personality Bill Vickery "provided some information to corroborate McGee's allegations" about Hutchinson.

The investigation was focused on a possible kickback or bribery scheme and Hutchinson's potential illegal use of campaign contributions, the FBI agent testified.

Hutchinson, indicted on Aug 30, is charged with using more than $150,000 in campaign contributions for personal use between 2010 and 2017, and of failing to report more than $271,000 in income between 2011 and 2014.

Goodson, who has filed for divorce from Arkansas Supreme Court Justice Courtney Goodson, hasn't been charged with any crime. Lowe said Hutchinson has continued to deny that the $20,000 he received from Goodson each month to drum up business for class-action lawsuits was in return for any legislative action.

"He said he was not asked or instructed by Mr. Goodson to do anything," Lowe said. He added, though, that Hutchinson said Goodson "would talk to him like a dog," and that after two years, Goodson started reducing the payments to Hutchinson to $7,000 a month and then to $5,000 a month.

Lowe said Hutchinson explained how he began working for Goodson: After working for a Texarkana law firm, things "were not going well," so in December of 2010, he reached out to Goodson, who initially told him he didn't have a job, but later hired him to help obtain clients for class-action cases for a $20,000 monthly retainer.

The agent said that Hutchinson acknowledged that "it looked really bad" that he took a lot of money from Goodson to drum up business when he never actually steered any business toward Goodson. At the time, the payments constituted Hutchinson's sole income outside of his state salary, Lowe testified.

In a story written by Max Brantley and published in ArkTimes.com, Goodson denied he was being investigated by the FBI. When asked during a telephone interview if he was being investigated by the FBI his response was "No."

Keil and Goodson of Texarkana had a contract with Hutchinson, as well as other trial lawyers, who are paid for client introductions and for presenting litigation theories the firm might want to pursue, he said.

He said his partner, Matt Keil, had signed the contract with Hutchinson, but there was no legislative quid pro quo.

"I never had him do any legislation," Goodson told ArkTimes.com.

Although Hutchinson has said the laptop contained spreadsheets on which he tracked his campaign expenditures, and that would clear him of wrongdoing, Lowe testified that he didn't recall seeing any spreadsheets or anything else exculpatory. Hutchinson's ex-wife, Stephanie Hutchinson, testified Monday that for years, she organized all of her husband's receipts and kept up with his campaign expenses because he never did it.

Among the screenshot-captured text messages the FBI found on the Sony laptop turned in by McGee was a message Hutchinson sent to Stephanie Hutchinson on June 20, 2011, when they were arguing about the amount of time he should spend with their children. In describing how busy he was, he wrote, "If I lose the election, I will probably lose Goodson's money."

McGee testified that Hutchinson regularly forwarded her conversations he'd had with Stephanie Hutchinson, to demonstrate that she was a priority in his life.

Lowe said he first interviewed Hutchinson on June 11, 2014. He acknowledged not letting on at first that Hutchinson was a target, but never threatened to arrest him if he didn't provide information on someone else, as Hutchinson has suggested. The agent said the senator soon began to realize that he was in danger of being charged on accusations of spending campaign funds on personal items, withdrawing cash from the campaign account without explanation and using a campaign credit card for personal items, and "begged not to be prosecuted. He asked me what he could do."

Hutchinson indicated he had "valuable information" about a senator's attempt to bribe a business for $30,000 in exchange for directing a large amount of General Improvement Fund money to the business, Lowe testified. He said Hutchinson didn't name the senator but indicated the company was his client, a victim, and that it didn't pay the extortion threat.

Lowe said Hutchinson agreed to be a confidential source for him, and met with him on several occasions, implying that he was an attorney for the facility, Dayspring Behavioral Health Services of Springfield, Mo., which provided mental health services in Arkansas, and that he would try to get its chief executive, Milton "Rusty" Cranford, to talk to Lowe. The FBI agent said Hutchinson also eventually named then-Sen. Jon Woods of Springdale as the extortionist.

Lowe said he later closed the case when he realized Hutchinson had been dishonest and that federal prosecutors in the Western District were investigating Woods.

In September, Woods was sentenced by a federal judge in the Western District to 18 years and four months in federal prison for directing state grant money to companies in return for kickbacks. Cranford pleaded guilty last summer to a federal bribery charge, admitting he bribed Arkansas lawmakers from 2010 through 2017 to influence laws and state regulations to benefit what became Preferred Family Healthcare in Missouri.

Hutchinson is also facing charges in federal court in Missouri that he accepted bribes from Preferred Family Healthcare to influence state legislation and regulations.

Lowe said the information on the devices McGee brought in was destroyed on Dec. 14, 2015, as is standard procedure when a case is being closed, and the case was closed Aug. 2, 2016. However, he said, it was reopened in March 2017, but by then, the devices had been returned to McGee.

She testified that the laptop in question was later stolen during a break-in at her apartment, which prosecutors say makes Hutchinson's claim that the laptop held exculpatory information on him a little too "convenient."

Twice during McGee's testimony Tuesday, as she sat on the witness stand wearing a red beret, red high-heeled shoes and a black-and-white skirt set, and talking about her work as an artist, she blurted out a reference to "the abortion," but wasn't asked to explain further by attorneys for either side. She said Hutchinson had given her some money for "the abortion."

Tim Dudley, an attorney for Hutchinson, refused to comment about the remark later.

 

(This article first appeared online at ArkansasOnline.com for the Arkansas Democrat-Gazette. Goodson's response, from an ArkTimes.com article, were added to the body of the story.)

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