June 11, 2014

Ouachita County Judge Pleads Guilty to Bribery

EL DORADO, AR—Conner Eldridge, United States Attorney for the Western District of Arkansas, announced today that James Michael Hesterly, age 50, of Camden, Arkansas, pleaded guilty to one count of bribery concerning a program receiving federal funds. Hesterly and Harry Clemons Jr., age 39 of Bearden, Arkansas were indicted for a scheme to award a Federal Emergency Management Agency (FEMA) disaster-relief contract to Clemons by rigging the bidding process in return for a contribution to Hesterly’s 2010 reelection campaign for Ouachita County Judge. Hesterly had been the county judge of Ouachita County Arkansas for the past 10 years. Harry Clemons is the owner and operator of Clemons Construction. A federal grand jury handed down the indictments in Fort Smith on January 17, 2013. The Honorable Susan O. Hickey accepted the change of plea in The United States District Court in El Dorado.

U.S. Attorney Eldridge commented, “This type of conduct by a public official offends taxpayers and citizens, as well as all of the other public officials who are truly dedicated to their service. To abuse your position of public trust to engage in illegal activities in order to enrich oneself is an affront to our justice system. We remain dedicated to holding those accountable who use similar positions to perpetrate crime.”

“Public corruption undermines the trust necessary in our democracy. This case is evidence of the FBI’s commitment to investigate public corruption at all levels,” stated FBI Special Agent in Charge, David Resch.

According to documents filed in court, beginning in March 2010, Hesterly proposed awarding Clemons a FEMA funded contract clean up storm debris in Ouachita County without competitive bidding in exchange for a payment to Hesterly for his reelection campaign. The debris was the product of two tornados that struck the county in October 2009. In furtherance of this conspiracy, Clemons arranged for two other bidders to submit intentionally inflated bids to Hesterly through fax. Clemons then met with Hesterly at his office and submitted a bid on behalf of himself and another company for the contract in the amount of $120,730, a total amount below the inflated bids. Hesterly accepted Clemons’s bid and, on April 8, 2010, applied for federal funds from FEMA to help Ouachita County pay for the contract. Hesterly represented to FEMA that Clemons was the lowest bidder among the three bids that he had received. After FEMA approved and obligated the request, Hesterly requested that the contract price be increased by $4,000 representing that the increase was necessary to cover increased costs to Clemons for disposing of the debris. FEMA also approved that request, but the $4,000 was ultimately paid to Hesterly by Clemons as bribe money solicited by Hesterly for awarding the contract to Clemons.

In order to promote open competition, federal regulations require that the contract be awarded through a sealed bidding process and in compliance with all applicable state law. While state law requires the bid to be advertised for 10 days, the bid in this case was advertised for one day. No sealed bidding process took place. Instead, false and fraudulent bids were submitted. In August 2010, Clemons submitted documentation to Hesterly stating that all work on the contract had been complete and requested a payment of $69,865 for Clemons Construction. That same month, Hesterly certified to the state of Arkansas and FEMA that the work set forth in the contract had been completed. On October 13, 2010, Hesterly signed an order allowing Clemons’s claim for payment to go through. Later that month, Clemons received a check from Ouachita County for $69,865. Clemons then paid the $4,000 to Hesterly.

The defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violations. The sentence will not exceed the statutory maximum and in most cases will be less than the maximum. The maximum term of imprisonment for bribery is 10 years per count.

This case was investigated by the FBI. Assistant United States Attorney Kenny Elser represented the United States.