More names and faces linked to legislative kickback probe | Arkansas Blog

More names and faces linked to legislative kickback probe

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SPRINGDALE LEGISLATORS: Rep. Micah Neal (left) and Sen. Jon Woods are in the middle of a probe into spending of surplus state money on local nonprofits.
  • SPRINGDALE LEGISLATORS: Rep. Micah Neal (left) and Sen. Jon Woods are in the middle of a probe into spending of surplus state money on local nonprofits.

Arkansas Business wins the race to publication
of  other names likely linked to details in a plea agreement signed by Republican state Rep. Micah Neal in pleading guilty to taking kickbacks from state surplus money guided by legislators through the Northwest Arkansas Economic Development District into the hands of nonprofit entities.

No one else has been charged with a crime, let's first stipulate and the following isn't to accuse anyone of a crime.

Neal's agreement said a state senator explained the kickback scheme to Neal and it said  that Neal subsequently received a total of $38,000 in cash kickbacks for guiding $200,000 to a college and $150,000 to a nonprofit agency. The senator, according to facts in the agreement, appears likely to be Sen. Jon Woods, who leaves office next week to devote time to other unspecified activities. He is not commenting.

Ecclesia College, a tiny Bible college in Springdale, received $50,000 from Neal, part of almost $600,000 it got from the Northwest Arkansas Economic Development District alone in GIF (surplus) money. (I have  tips that it may have been targeted for help by legislators in other parts of the state) The college says it did no wrong. It  acknowledges it had a consultant that helped raise money and got some from the state GIF pool, but hasn't yet identified that consultant. The Neal plea agreement said he got his cash kickback from an unnamed third party, Person C, a friend of the unnamed senator who had a consulting company.

The Neal agreement also mentions payments to an area nonprofit. Arkansas Business points to payments by the Economic District and various corporate and other filings to suggest that Decision Point, a behavioral health organization that got $400,000 from the Development District, was likely the organization being described. It is an affiliate of Preferred Family Health Care based in Missouri. One of its executives and lead executive in Arkansas at the time was Rusty Cranford, who is also a registered lobbyist. A corporate health executive and lobbyist was Person A in the Neal plea agreement that detailed money flowing from one corporate health care entity to another related to Person A. The article notes that Cranford created an LLC known as Ameriworks  the same day in 2013 that the $400,000 payments were made to Decision Point. In the Neal agreement's telling, the money went from one entity to a related entity. The suggestion  is that the money to Decision Point traveled on to Ameriworks.

I have gotten no response from Cranford since I wrote him two days ago inquiring whether he had any connection to the Neal case. I've also not heard back from Joe Willis, director of the Northwest Arkansas Economic Development District, who has to date refused FOI requests for copies of requests for information or warrants served on his agency by federal investigators

Arkansas Business did get a statement from Preferred Family Health, distancing itself from involvement in anything untoward, and also a statement from Willis.

Reginald McElhannon, an attorney with Preferred Family Healthcare, issued the following statement late Friday morning in response to question from Arkansas Business:

"AmeriWorks, Inc. has no legal affiliation with Preferred Family Healthcare. One of our affiliates, Decision Point, a treatment provider in Bentonville, Arkansas, was exploring a collaboration to provide employment for needed populations. At the time, Decision Point was an affiliate of Alternative Opportunities, which merged with our organization on May 1, 2015.

"After the $400,000 General Improvement Fund was awarded, it was later determined that AmeriWorks was not prepared to move forward with the initiative. After further study, Decision Point did not feel it was in a position to utilize the funds as prescribed and sent a check in the full amount of $400,000 to the Northwest Arkansas Economic Development District on August 13, 2014.

"Rusty Cranford was an employee of Dayspring Behavioral Health Services when it was acquired by Alternative Opportunities in 2007. Alternative Opportunities merged with Decision Point in 2011 and Health Resources of Arkansas in 2014. All three entities were facing challenging financial and infrastructure needs and Alternative Opportunities, and now Preferred Family Healthcare, has worked diligently to provide support to these affiliates so they are the strong and vibrant organizations which are impacting the lives of thousands of Arkansans seeking behavioral and mental health services, including those facing the challenges of Substance Use Disorder."

Willis released a statement to Arkansas Business on Friday describing the NWAEDD as a victim of Neal's crimes:

"The Northwest Arkansas Economic Development District was made aware of a law enforcement investigation involving GIF distributions in the fall of 2015. The District has cooperated fully with the investigation including honoring the demand that the subpoenas, inquiries, and the investigation be kept confidential. The District understands that this is an ongoing investigation as it relates to other unnamed parties. The District is a victim, is not under investigation and had no knowledge that any funds were being misdirected by anyone at any time."

Who will be first to identify Person C, who delivered cash kickbacks to Micah Neal? The person is described as a friend of the unnamed senator. I have a picture ready to run if rampant speculation on that count is confirmed.

How can unidentified parties be accused of seemingly illegal acts and not be charged? The answer might not be lack of evidence. It might be that they are providing cooperation. Speculation is high that such cooperation is occurring and, under this scenario, expands the number of current and former legislators under scrutiny. I have confirmed existence of probes in other areas of the state.

The legislative consulting business has grown lucrative in recent years. An insider with knowledge of the business could be quite valuable — to the FBI.

RE FOI: Willis' excuse not to release information is bogus. The feds cannot "demand" that he do anything absent a court order. The "ongoing investigation" exemption applies to the investigating agency, not an agency that happens to get notice of such an investigation. He should come clean.

FOOTNOTE: Russ Racop, a blogger who likes to pursue documents related to criminal investigations, didn't get all he sought from the NWA Development District. But he did get spread sheets on money allocated from GIF according to instructions from Neal and Woods as well as e-mails between the agency and legislators on doling out the surplus money. I am again reminded of my disappointment at Judge Chris Piazza in deciding against Mike Wilson's lawsuit alleging this was, in effect, a continuation of unconstitutional local legislation he'd stopped in an earlier lawsuit. The process was cut and dried — surplus was doled out to legislators, many who spent it on local projects in contravention of the Constitution, including for a religious college.

Here are the records of GIF spending by Neal and Woods dislodged by the Racop FOI request.
PS: Joe Willis did deliver his prepared statement to me and added in response to my FOI request and argument that federal warrants and similar couldn't be withheld said:

As I am sure you can imagine we are receiving numerous requests for documents and are working through those as expeditiously as possible. Please bear with me while we do so.
Willis, I should add, was not director when the contested events occurred. A scathing audit led to a change in leadership and agency practices.


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