An Arkansas legislative panel Tuesday delayed action until next month on state Treasurer Dennis Milligan's request to transfer $50,000 within the office to help cover fees for an attorney who represents Milligan and his chief of staff in a defamation lawsuit filed by a former employee.
A few lawmakers asked Milligan's office for more information to help the Legislative Council's Performance Evaluation and Expenditure Review Subcommittee decide whether to approve Milligan's request to transfer $50,000 in spending authority from the treasurer's capital outlay budget to the professional fees and services budget.
The subcommittee will consider the request during its Feb. 16 meeting, said a subcommittee co-chairman, Sen. Bruce Maloch, D-Magnolia.
Afterward, the other subcommittee co-chairman, Rep. David Meeks, R-Conway, said, "This is about protecting taxpayers. I would not be sad if" Milligan paid the legal bills out of his own pocket.
Maloch asked two officials in the treasurer's office why Attorney General Leslie Rutledge isn't representing Milligan and his chief of staff, Jim Harris, in the lawsuit filed last year by former outreach manager David Singer.
Milligan and Rutledge are both Republicans.
Jason Brady, deputy chief of staff in the treasurer's office, said Singer filed a defamation lawsuit against Harris in May in Pulaski County circuit court and later added Milligan.
"Along the course, a conflict of interest was discovered by the attorney general's office and they recused ... and we did retain private representation outside the attorney general's office," he said.
Maloch on Tuesday asked the treasurer officials about the basis for the conflict.
"There was an opinion given by a former member of the attorney general's office and the treasurer's office followed it, and that's in dispute in the lawsuit," Brady said. "The attorney general's office felt like because of that, they need to recuse. The treasurer's office did not ask them to. That was a decision made by the attorney general's office and we just followed their advice."
Bryan Freeland of the Mitchell, Williams, Selig & Woodyard PLLC law firm has represented Milligan and Harris since last summer. The treasurer's office paid the firm a $20,000 retainer in fiscal 2015, state officials said.
The treasurer's chief information officer, Gary Underwood, told lawmakers that the office was about $1,000 short in spending authority for professional fees to pay a bill for more than $10,000 in legal fees that arrived last week. He said he's asking for $50,000 in spending authority in anticipation of future legal bills, but he "doesn't know if that's a correct figure."
Underwood said the office will have paid more than $42,000 in attorney fees, including the $20,000 retainer, after it pays its latest legal bill.
He said Singer seeks $1 million in his lawsuit. Sen. Jason Rapert, R-Bigelow, asked officials for the treasurer's office to report back to lawmakers how such a judgment would be paid if Singer wins.
"Frankly, that should weigh into your negotiations on a settlement because it's a big difference on where that money comes from and what would happen," he said.
Singer's latest lawsuit, filed Sept. 25, says Singer's wife died in 2014 from breast cancer. Singer began grieving and Harris started speaking about Singer's wife and Singer's mental health in "a disgusting manner," the complaint states.
Eventually, the lawsuit said, Milligan fired Singer because Milligan thought Singer was mentally ill. Also, before his termination, Singer had complained about the office using public funds to engage in political activities and harassment, according to the complaint. Milligan and Harris denied the allegations.
Metro on 01/13/2016