(CN) – The 6th Circuit vacated the convictions of former Tennessee state Sen. John Ford whom a jury found guilty of two counts of honest services wire fraud and four counts of concealing a material fact.
Federal jurisdiction cannot be invoked to determine whether Ford should have told state entities that he had financial interests in contractors for TennCare, a state-run healthcare provider, a three-judge appellate panel found.
During Ford’s 31-year tenure as a Tennessee state senator, he had “a busy work schedule,” working in his family’s mortuary business, as an insurance agent and as a consultant, Judge Boyce Martin wrote for the court.
“As part of his duties as state senator, Ford had a position on the TennCare oversight committee, which discussed and recommended changes to TennCare,” Martin wrote.
Although expected to maintain a degree of objectivity, Ford performed consulting services for Omnicare and Doral Dental Services of Tennessee through Managed Care Services Group, a consulting partnership of which he owned 40 percent.
Both Omnicare and Doral won state contracts with TennCare, and they paid Ford for his services.
Omnicare paid Ford a one-time payment of $17,000 and up to $10,000 a month after TennCare contracted with it to provide healthcare to TennCare members.
Ford’s company, Managed Care, made approximately $40,000 per month after Doral won a state contractor to provide dental services to TennCare members, the ruling states.
Ford was found guilty of violating two federal statutes for not disclosing his financial relationships with Omnicare and Doral.
But the Cincinnati-based 6th Circuit agreed Thursday that the statute concerning Ford’s disclosure does not apply to his case because such obligations lay with the Tennessee Senate and the Tennessee Registry of Election Finances, which are outside of federal jurisdiction.
“[Although] TennCare is paid for mostly with federal funding and exists only because of a federal waiver from federal Medicaid … the disclosures that Ford was supposed to make were owed to state entities,” Martin wrote.
Only the Tennessee Senate and the Tennessee Registry of Election Finances “could have reprimanded Ford or exacted some equitable remedy, but no federal entity had similar authority in this situation,” the ruling continues. “Furthermore, the United States presented no evidence that the senate or election registry operate on federal funds.”
The former senator’s wire fraud convictions were also vacated in light of a 2010 Supreme Court ruling, which found that the so-called “honest services law” hold up only in cases that reveal evidence of bribes or kickbacks.
Since Ford’s wire fraud convictions were based on his failure to disclose his financial interests, not bribes or kickbacks, his conviction was vacated.
Ford still faces a 5 1/2 -year sentence on an unrelated bribery charge for accepting money from an undercover FBI company called E-Cycle.