Monday, March 20, 2006

Charlie Daniels' Ties to Nick Wilson go Deep

There has been a lot of talk about how democratic candidate for Governor Attorney General Mike Bebee was tied to disgraced former State Senator Nick Wilson. Wilson is the one who was convicted of funneling millions of taxpayer dollars ment for disadvantaged children to his insider cronies. It is the kind of crime that makes you want to reconsider the Constitution's prohibition on "cruel and unusual punishment".

Mike Bebee was not involved in the crime, but it happened on his watch. There are many who think he knew, and Wilson himself said that though not every legislator knew about the scam, the ones that you would think knew about it did.

With all that swirling around it may interest you to know that there is another Democrat on the ballot with even closer ties to Wilson, and an even more sordid personal history. Secretary of State Charlie Daniels and Nick Wilson go way back- way into the shadows. The tale is so long in the telling, it will likely take three articles to tell it all......(see part one by clicking "Monday" below, or if you were sent directly to the article, by scrolling down)


Blogger Nom Deguerre said...

For over 30 years, Charlie Daniels has been close to the some of the most corrupt politicians in Arkansas history. Several stories quote Charlie Daniels as calling Nick Wilson his “best friend”. Charlie Daniels succeeded McCuen as Land Commissioner, followed by Secretary of State, but before that, he had a stint as the Director of the State Department of Labor.

How Three Scandals in One Week Cost Daniels His First Job in a Public Trust as Director of the Department of Labor

In 1980, three scandals in one week (two related to Nick Wilson and Murray Grider) led to his resignation from his job as Director of the Labor Department. Today I will give details on the scandals of that momentus week. Rest assured, today's report is only the tip of a titanic sized ice-berg.

So, here’s some background:

• Highly recommended by the AFL-CIO, Charlie Daniels began his career in public service when he was appointed Director of the Department of Labor. The step up from an electrical meter-reader was a good one for Mr. Daniels. Governor Bill Clinton was so impressed with Charlie Daniels’ work that he called him a “son of labor”. (AG 1/18/79) However, it seems Bill Clinton’s opinion of Daniels changed in 1980.

1980 Charlie Daniels Invests State Money in Local Banks Connected to State Senator Nick Wilson. (Scandal #1 that week in 1980)
John Brummett, revealed in December of 1980 that Sen. Nick Wilson had arranged that previous January for Charlie Daniel’s Labor Department to invest funds in two banks within Nick Wilson’s home district, one of which he owned stock in.

At Nick Wilson’s behest, Charlie Daniels (remember “Best Friend”) took extra Labor Department funds (raised through electricians’ licensing fees) and invested in two banks:

• $50,000 in Arkansas state funds for a Certificate of Deposit in the Planters and Stockman Bank of Pocahontas. Wilson owned stock in this bank. Nick Wilson’s law partner, Murray Grider, was the attorney for the bank.

• $50,000 in Arkansas state funds for a Certificate of Deposit in the First Security Bank of North Arkansas, which was in his home district. (Wilson claimed that he had no financial interest in this bank.)

• Charlie Daniels and Nick Wilson maintained that the deposits arose from a chance meeting at Charlie Daniel’s state office. Sound familiar?
(AG 12/3/80)

In response to this scandal, Daniel’s proposed that licensing fee collections be placed in a special fund to be handled by the state Finance and Administration Department. (AG12/3/80)

Scandal #2 That Week :“Contract Flap”

Scandal #2 that week in December
Meanwhile, the Associated Press began reporting that Wilson, working through the Worker’s Compensation Commission, arranged for a state consulting contract for a business partner who was operating a corporation established by his law partner, Murray Grider.

Philip Ledbetter of Pocahontas, part-owner with Wilson of an abstract company, was looking for work and Wilson claimed he told Ledbetter to apply for a contract with the Worker’s Compensation Commission. At that time, the legislature’s Joint Performance Review Committee, and the Commission, wanted more data about claims resulting from accidents in public agency jobs.

Grider already had formed a company, International Safety Consultants Inc. Ledbetter felt that he needed a corporate entity to apply for the Commission contract, so Grider transferred ISC Inc. to Ledbetter, Wilson said. Ledbetter got the contract.

Nick Wilson said the Legislative committee and the Commission were pleased with Ledbetter’s study. Later, Labor Director Charlie Daniels and his “best friend” Nick Wilson discussed the need for more data about the rate of accidents and claims in public employment and the need to develop safety programs. Another consulting contract for Ledbetter was suggested according to Nick Wilson, but it fell through because of shortage funds.

So then Charlie Daniel’s Labor Department tried to fund the contract through the Ozarks Regional Commission, seeking $64,000 according to the Associated Press. The name Grider-Ledbetter business was changed from ISC Inc. to Project Systems Inc.

However, this contract was turned down by Ozarks Commission. Julie McDonald, Governor Clinton’s aid for ORC projects, said she was “antsy” about the contract because only one company other than Project Systems submitted a proposal. She was also troubled by the Project Systems application for several reasons,, e.g. the Wilson-connected firm listed no telephone number. When McDonald called for a public presentation; at that point, Project Systems withdrew its application, she said. (AP reporting, covered in Arkansas Gazette 12/3/80)

Scandal #3 That Week: Charlie Daniels Snared in Audit of Travel Expenses “Advanced” Himself and other Labor Dept. Employees.

Shortly after the Nick Wilson bank-transfer and contract flaps, Charlie Daniels was again under fire for an entirely separate, internal scandal: the likely misappropriation by him and his staff of state funds for “travel expenses.”

The allegations:
• Charlie Daniels, as the Labor Department head, had authorized an advance of $495 to himself.

• Numerous members of Charlie Daniels’ staff had also made advances that had not been accounted for.

Audits of Daniel’s Labor Department by two agencies-the Legislative Joint Auditing Committee, and the state Finance & Administration Department were promptly announced.

In 1979, a new law had set up a system for reimbursement for travel expenses, as a means of reducing the use of state-government credit cards. Under the law, a state agency could set aside a sum from its regular appropriations for this purpose. An employee needing travel money in advance would then need to obtain a “loan” from the this fund; after the trip the employee would be expected to file an expense report, get a reimbursement check, and then use the check to repay the “loan.”

The rule, according to William D. Gaddy, director of state Finance & Administration, required the loans be made only for individual trips on state business by state employees who require a cash advance. The rule then required that the loans be repaid when the employee received reimbursement for the expenses of that single trip, Gaddy said. (AG 12/11/80)

But Charlie Daniels’ reporting method “Made More Sense” (Than the law)

Charlie Daniels acknowledged to the Arkansas Gazette that (supposedly at the suggestion of his chief fiscal officer), he authorized an extended loan to himself that he would not pay back until after several trips. “It just made more sense to me to do it that way. But it apparently was not in keeping with what was intended.” He said it was his understanding that other state agencies were operating with extended travel loans, which he called “term” loans.

Daniels also acknowledged that some of his employees who travel extensively also “have been a little lax” in repaying loans. Daniels said he would send a recommendation to all employees directing them to repay all outstanding loans as soon as possible. (AG 12,11,80)

State Audit: Daniels’s Department Violated Funding Procedures

On De. 17, 1980, the Finance & Administration Dept. completed its audit. The findings:

• Charlie Daniels office had violated the procedure for drawing “loans” for travel expenses.

• All funds had been accounted for.

• All outstanding loans were identified with corresponding promissory notes.

•The Labor Dept. agreed to pay all outstanding loans by Dec. 23, 1980.

•In all $5,000 was authorized for the Dept.’s travel fund, and $2,607 was outstanding as of the previous week.

•That money was advanced to 12 employees who had loans ranging from $42 to $500.

•Of the outstanding amount, $1,250 was in December loans that were not overdue, according to the audit. (AG 12/18/80)

According to the Arkansas Gazette, the audit “found Daniels…violated proper procedures by allowing extended loans to himself and his employees for travel.” (AG 12/21/80)

Charlie Daniels Resigns Under Fire

On the same day as the audit was released, Daniels announced he was submitting his resignation to the new Governor, (Frank White) effective Jan. 13.

The Arkansas Gazette reported that “Daniel’s resignation came after published reports of misuse of state travel funds and other questionable practices in his agency.” (AG 12/21/80)

Governor Clinton Agrees Daniels Should Resign

Three days later, outgoing Governor Clinton state that Charlie Daniels “made the right decision, the appropriate decision” by resigning. Clinton said that when the newspaper article about Daniels first appeared, he asked Finance & Administration Director William D. Gaddy to check into the allegations. He said Gaddy believed it would be proper for Daniels to resign, and that he agreed. (AG 12/21/80)

…The “Son of Labor” apparently lost favor in Governor Bill Clinton’s eyes as well.

9:18 AM, March 20, 2006  
Anonymous Catfish said...

If this is to be Le Groin's line of attack, he should recall how far Janet Huckabee got with slinging old mud at Daniels.

For a party that says it's about new ideas for the future, both Hutchinson and now Le Groin seem trapped in chewing over the past of twenty something years ago.

Or is this just a history lesson for those of us who didn't live here (or anywhere) in 1979?

11:28 AM, March 20, 2006  
Anonymous Anonymous said...

Didn't live here or weren't into politics for whatever reason back then. I didn't know how "fishy" Chuck Banks was either until I was tipped off on one of the blogs.

It seems that some people have no shame but keep running for higher office in spite of their generally known crooked past.

2:40 PM, March 20, 2006  
Blogger Nom Deguerre said...

Conservative blogs have made an impact because conservatives got tired of waiting for the liberal media to report negative stories on Democrats. Thank God at last we have the means to go around them. Their days of being able to get away with corruption are fast drawing to a close. Those who benefit from it don't like that. Too bad.

If Charlie Daniels had only done something 20 years ago then MAYBE it would be irrelevant. This is just the first of many exposes you can expect to see on him that will run up to the present time. We need better in Arkansas.

2:47 PM, March 20, 2006  
Anonymous Anonymous said...

Good night. You know, I forgot about some of that stuff.

6:33 AM, March 21, 2006  
Anonymous Anonymous said...

What is fishy about Banks?

6:22 AM, March 24, 2006  
Anonymous Anonymous said...

For starters, do a google search on:
Chuck Banks + Mena + drugs

7:26 AM, March 24, 2006  
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