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Arkansas Law Discloses Legislators’ Business Ties to State

Of concern to taxpayers should be the private business interests of their legislators. An Arkansas law enacted in 2007 requires disclosure of those interests when a lawmaker or his or her spouse owns at least 10 percent of a business that contracts with the state. Under the law, Act 567 (HB 2662), state agencies are required to disclose any current such contracts and those entered into within the past five years.

The law hit its mark. The largest business interest that has been disclosed involves a company controlled by Senator Percy Malone, an Arkadelphia Democrat and legislator since 1995 who is president and majority stock holder of W.P. Malone, Inc., which owns Pharmacy Care of Arkansas. The firm operates as Allcare Pharmacy.

Allcare provides prescription drugs and other medical services to prisoners in the Arkansas Department of Correc-tions through a subcontract with Correctional Medical Services (CMS). Malone declined to put a monetary value on the business that Allcare does with CMS, stating such information was “proprietary.”

Malone’s company engages in a significant amount of direct business with state agencies, too. For providing prescription drugs to 4,400 Medicaid recipients, Allcare was paid $2.89 million in the last fiscal year. The company earns an additional $200,000 per year from a contract with the Arkansas Health Center at Benton, and leases space to the Dept. of Workforce Services for $15,200 annually. Allcare also has a $25,000 annual pharmacy contract with the Department of Human Services.
The business arrangements are all legal. “As a citizen legislator, I have a right as much as anybody to bid,” said Malone. According to state officials the contracts were obtained through competitive bidding.

Initially, Malone didn’t indicate on his personal financial disclosure report that he was an officer of a company that had state contracts. He amended his report in April 2008 after an article in the Arkansas Democrat-Gazette questioned the omission.

Malone is not the only legislator to do business with the state while concurrently serving as an elected official. Rep. Barry Hyde obtained a $589,499 contract to build an administrative building at a University of Arkansas Division of Agriculture sub-station. Further, Rep. Bruce Maloch is the chief operating officer for Farmers Bank & Trust, which provides banking services to Southern Arkansas University.

“I just felt that if you are a legislator and doing business with the state, you need to disclose that,” said Rep. Sid Rosenbaum, who sponsored Act 567. “All legislators I talked to thought this was a good idea.” The law was not intended to uncover contracts with any specific legislator or business, according to Rosenbaum.

While Act 567 is useful, the disclosure of business interests with the state does not prevent lawmakers from voting on legislation that protects or benefits those vested interests, which is the real underlying concern.

Sources:, Arkansas Democrat-Gazette

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