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FALSE WITNESS | PAGE 1, 2, 3, 4, 5
Tales about unusual procedures in Hale's court began to surface early in the summer of 1991, and Simpson, the county administrator, began looking into them. "We developed enough information to convince me that there absolutely was something going on out there in that court," Simpson recalled. The serpentine financial procedures he found while investigating Hale's court stunned Simpson. Among the findings of his investigation: Free rent: Simpson said that with Hale's authorization the county was paying the private company's overhead. He found out about the unusual arrangement when Hale boldly requested that the county build additional office space for SCS at the municipal court building. "We were paying the telephone bill. We were paying the utilities. They had free room and board while they were working there," Simpson said. "And now they were asking me to build a new room." The rent alone would have cost SCS at least $9,000 a year if they had to pay it, Simpson recalled. Hot checks: Under normal circumstances, a merchant stiffed by a hot check writer would fill out an affidavit. The information would be entered into the court records computer, and the court would issue an arrest warrant for the check writer. But that's not what happened in Hale's court, former court employees said. Instead, SCS workers took the affidavit and ran an apparently illegal check on the National and Arkansas Crime Information Center computers to see if the check writer was wanted for other crimes. By law, the databases are to be used only by police and authorized court personnel. Simpson recalled that the SCS employees were never authorized to use the database. "Then they would call the people and tell them, 'We have a hot check here,'" recalled a former court employee, "'If you will come in by 5 o'clock today, bring cash to cover the check, the service charge from the bank, a $159 fee and turn yourself in at the Sheriff's Department, a warrant will not be issued for your arrest.'" When the check writer arrived at the sheriff's office, deputies would call an SCS employee, who would then escort the check writer to municipal court. Court employees then would collect the money to cover the hot check, record it on the computer and print out a receipt. But the collection of the $159 was never documented in the computer. "We would have to handwrite the receipt for that $159 so that it would never go on county records anywhere," one of the former court workers told Salon. "These people didn't owe that $159. It was for 'warrant recall,' and a warrant had never been issued." At the end of the day, a SCS employee would collect the money and copies of the receipts and take them to the company's bookkeeper. That way no one from the county would ever discover the payment scheme. The former court worker's account matches much of what Simpson later found out during the course of his own investigation. Simpson says the scam left everyone involved happy at the end of the day: "If you're the business person, you're happy because you got your money back. If I'm the hot check writer, I'm happy because I didn't have to go to jail. And where the money went, those guys are happy too." Out of the $159 paid by each defendant, Simpson's investigation determined:
Neither the rehabilitation fund nor the retirement fund were ever authorized by the county. There is no record of how much money went to those funds or what happened to it, Simpson said. Traffic: Special Court Services also had a scheme worked out for the court's traffic division. Traffic violators who wanted to pay traffic fines over time would be placed on a payment plan. A Special Court Services employee, who had a desk inside the municipal court traffic division, would give the violators a form instructing them to bring $3 in cash or money order to pay off their fines over time. The company's bookkeeper would collect the money at the end of the day, and send the traffic payment to the county. The $3, however, remained with the company, Simpson said. Although no ordinance authorized the company to collect the fee, Hale himself gave SCS the go ahead for it, Simpson said. Bail bonds: With Hale's approval, SCS also ran a lucrative -- and legally suspect -- bail bond service. Suspects arrested by sheriff's deputies were able to secure their release by paying to SCS a bond fee of 8 percent, Simpson said. The county kept no record of the bond, and if defendants failed to show up for trial, Simpson said, the court issued a bench warrant for the suspect's arrest -- just as it would for suspects released on their own recognizance. SCS simply collected the suspect's money, Simpson said. "They just got their 8 percent for coming down there. They never had to do anything," he said. The Quorum Court knew nothing about the scheme and had passed no ordinance authorizing it, Simpson said. Simpson's investigation also found that SCS's operation apparently violated state law because bondsmen are required by statute to charge 10 percent, no more and no less. Simpson said he had trouble getting straight answers from Hale and the SCS owners while conducting his investigation. "Each one blamed the other one," Simpson recalled. One day in the spring of 1991, Simpson was checking documents on SCS ownership at the state Capitol. While he was there, he recalled, he ran into an FBI agent he knew from his days as a Little Rock policeman. The agent, whom Simpson refuses to name, was also looking up documents related to Hale. The agent told him about the federal investigation of Capital Management Services, Simpson said. "I later received a phone call from that office (the FBI) confirming there was such a thing going on and asking us to hold off on any charges," Simpson recalled. "That wasn't uncommon, and it certainly was acceptable to us." Federal law enforcement officials dispute this account. They say that they were never made aware of the county's inquiry, and had they been, they might have investigated the goings-on at Hale's court. In any case, the county's first priority, Simpson said, was to terminate the illegal collections in Hale's court. And it did. After Simpson confronted the SCS owners, the company stopped using the law enforcement databases. The SCS proprietors signed agreements with the county governing the way the company did business and began following proper county financial reporting procedures. All of the improper collections ended, Simpson said, and SCS today is no longer in business. Hale resigned from the bench when he was indicted by the federal grand jury in September 1993. N E X T+P A G E+| Judge Dread |
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