When the public is kept in the dark …Why we support SB175
Recently, Arkansas newspapers reported a guilty plea by former Representative Micah Neal for using his position to get kickbacks for awarding General Improvement Fund Grants (GIF). It appears the problem of GIF influence peddling may be solved in the future by no longer giving individual legislators an allotment.
Even more ethics issues keep popping up in the newspapers and they give us a continual drip-drip-drip of questioning the business dealings of some politicians. Yet the trend in Arkansas has been to relax ethics rules.
When the public is kept in the dark bad things happen.
There are still a few legislators working FOR better ethics. One of them is Senator Bryan King. Senator King filed SB175 to require Medicaid providers and government officials to disclose conflicts of interest. Why focus on Medicaid?
First, because Medicaid expenditures are a huge portion of government expenditures in Arkansas. During the 2016 fiscal year about 27.2% of Arkansas’ General Revenues went to health and human services funding.[i] General Revenues are only a fraction of what the state administers in federal funds for Medicaid. In 2016, the total expenditures by the Arkansas Department of Human Services were over $7.5 billion and the Medicaid program made up the lion’s share of those expenditures.[ii]
Second, the business of Medicaid is a huge cash cow and has been the constant target of greedy people. We read stories across the country about Medicaid corruption. The stories include Medicaid fraud by individuals and providers, and even stories of politicians around the country who allegedly used Medicaid for influence peddling.[iii]
“The business of Medicaid is a huge cash cow and has been the constant target of greedy people.”
When Arkansas makes changes in Medicaid, huge amounts of money are involved. For example, the decision to adopt Obamacare Medicaid Expansion in Arkansas or from the potential of adopting managed care for some or part of Medicaid. Also, legislative committees review enormous Medicaid contracts. Which legislator has business interests that will be benefited or harmed by a change in the law or a favorable review of a contract? You don’t know.
Aren’t officeholders already required to file financial information? Officeholders file a “Statement of Financial Interest” that lists sources of income. But knowing that a politician gets more than $12,500 from his business, doesn’t tell you whether there are profits from government programs going into the busines. Unless a legislator is a medical service provider you aren’t going see Medicaid interests from this report.
There is also a state law requiring legislators to disclose potential conflicts but legislators rarely file one and the statements aren’t normally seen by the public. There is a lot of wiggle room to get out of filing a potential conflict report.[iv]
Does SB175 have a chance of passing. Senator King’s bill steps on the toes of big money and people who want their relationship with Medicaid providers kept in the shadows. It is likely to be an uphill battle, but we are hopeful that enough legislators will recognize the need for the legislation and the risk to the state if reform fails.
Senator King tried last year to get the committee, Legislative Council, to adopt a similar rule for its members, but the committee rejected it, preferring to keep those relationships in the shadows.
With Medicaid being such a huge business in Arkansas, is your legislator willing to vote for disclosure of business dealings with Medicaid providers? Or, will your legislator protect his interests or his colleagues’ interests by keeping Medicaid business dealings in the shadows, where only the FBI can find them.
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SB175 has been assigned to the Senate Committee on State Agencies and Governmental Affairs. Opponents will try to keep the bill bottled up in committee. If they are successful you may never know how they voted, because most committee votes are by voice vote.
Senator King is a member of the committee. His SB175 needs five yes votes to get out of committee. Here is the membership with links to their contact information.
Senator Eddie Joe Williams
Senator Gary Stubblefield
Senator Trent Garner
Senator Bart Hester
Senator Missy Irvin
Senator Bryan King
Senator Terry Rice
Senator David Wallace
[i] Source: Bureau of Legislative Research report: Financing State Programs
[ii] Source: Department of Finance and Administration report: STATE OF ARKANSAS Actually Expenditures Fiscal Year 2016
[iii] For example: US Senator Bob Menendez indicted in 2015 on corruption charges included an allegation of using his position to benefit a Medicaid provider who was a campaign donor. Note: Menendez has not been convicted and has yet to have his day in court. https://www.theguardian.com/us-news/2015/apr/01/robert-menendez-us-senator-new-jersey-corruption-charges
[iv] 21-8-803. Reporting of potential conflicts.
(a) A legislator who is required to take an action in the discharge of his or her official duties that may affect his or her financial interest or cause financial benefit or detriment to him or her, or a business in which he or she is an officer, director, stockholder owning more than ten percent (10%) of the stock of the company, owner, trustee, partner, or employee, which is distinguishable from the effects of the action on the public generally or a broad segment of the public, shall:
(1) Prepare a written statement describing the matter requiring action and stating the potential conflict; and
(2) (A) Deliver a copy of the statement to the appropriate official to be filed with the statement of financial interest.
(B) The copy of the statement may be delivered in person by the public official, by mail, or by a person authorized by the public official to deliver the copy.
(b) The obligation to report a potential conflict of interest under this section arises as soon as the legislator is aware of the conflict.
(c) If the statement of financial interest filed by the legislator makes the conflict readily apparent, then no report need be filed.