Arkansas Business illustration.
CONSPIRATORS: From left, Micah Neal, Oren Paris, Jon Woods
New federal charges are dropping in the Western District of Arkansas — as expected — in the public corruption scandal that had already snared a guilty plea from former Rep. Micah Neal of Springdale.
RANDELL SHELTON: Named in scheme with friends.
Details are unfolding, but a new indictment filed in Fayetteville (not Fort Smith as I originally wrote) names former Sen. Jon Woods, Oren Paris III,
the president of Ecclesia College
in Springdale and Randell Shelton Jr.
, a personal friend of Woods and Paris
Their involvement was tipped in Neal's plea deal by anonymous names and entities now confirmed, as well as a subpoena we uncovered in the case weeks ago The three are scheduled for arraignment in Fayetteville March 28.
In short, Woods — who served terms in the House and Senate but didn't seek re-election in 2016 claiming the press of other business — guided hundreds of thousands in state surplus money known as the General Improvement Fund that benefited the tiny private college of which Paris was president. The money went to the nonprofit corporation that runs the school. Shelton had a consulting company.
There are 12 counts of mail and wire fraud. They say Woods and Neal conspired to take bribes for steering the money to enrich Paris (he was paid $300,000 for his role at Ecclesia and his family together was paid $1 million, the indictment said). Paris paid the bribes through a consulting arrangement with a company set up by Shelton, the indictment says. Shelton in turn paid legislators.
Here's the indictment
It explains how Woods and Neal persuaded other legislators to pitch in money for Ecclesia and other nonprofits.
The indictment again references, as have earlier documents, another unnamed lobbyist who worked for two related unnamed private nonprofits working with disabled, substance abusers and others.
It outlines what we've been reporting for months, that the legislature funneled millions of surplus money through regional economic development districts in ways directed by legislators, including Woods and Neal. They told the Northwest Arkansas Economic Development District how to spend their allotments. A legislative audit turned up multiple irregularities in how the district handled money and the director of the agency was replaced. Money for Ecclesia was a question mark the Arkansas Times targeted months ago.
The indictment says Woods encouraged Paris to hire the unnamed lobbyist/businessman, whose business also received GIF allotments directed by Woods . The unnamed executive isn't charged in the indictment. Some $800,000 went to those entities, but half was returned. Some of the returned money wound up with Ecclesia. In total $600,000 went to Ecclesia and the nonprofit.
Generally speaking, the scheme was that state money would go to designated recipients, which paid the money to a consulting firm, which then paid kickbacks to the legislators.
In 2013, when Woods was working on legislation to send money to the GIF work, Paris wrote Woods on April 17:
"Jon, just couple of days of session remaining. I'm very proud of the amazing things you guys accomplished this session and pray for energy for a strong finish."
On April 26 Paris texted Woods about his support for the college:
"Good selling point to conservative legislators is that [Entity A] produces graduates that are conservative voters. All state and secular colleges produce vast majority liberal voters.
Woods replied: "Agreed."
The indictment is rich with texts, messages and details of arrangements for moving the state money through the development district to beneficiaries as Woods directed. This included strategies for lining up money from other legislators.
The indictment says Shelton was paid $50,000 for his consulting work, which he was paid the day Paris accepted $200,000 in state money for Eccelsia. He subsequently transferred $40,000 to Woods' bank account. Ecclesia's board paid Paris a $25,000 bonus the day the college got $200,000.
Communications outlined in the indictment also show that Woods arranged a job for someone at Ecclesia, hired as a secretary for $43,000 with a $4,000 "bonus," eventually raised to $7,000. Altogether, a financial officer noted, this cost exceeded what Woods had provided.
The indictment details how Woods told Neal a businessman would pay a 20 percent kickback of any GIF money provided.
The scheme could have been much bigger. Woods worked on legislation that would have provided up to $3.5 million for a work study college — a category for which only Ecclesia in Arkansas qualified. That bill did not become law. As Woods and Neal continued to provide more money for Ecclesia, Paris extended consulting agreements with Shelton. Paris continued to pay Shelton, though the indictment says these payments were done without knowledge of the college board. Paris ultimately informed the board of his consultant, but depicted it as being "strategic positioning" to entice large donors.
A 13th count in the indictment says Woods engaged in transactions of money derived from unlawful activity. The indictment seeks to have defendants forfeit ill-gotten money.
The indictment was filed Wednesday and filed publicly today.
The U.S. attorney's office has not yet issued a news release on the indictment and the office spokesman has not returned my call. So there is no explanation for what, if any, further action could be planned for the unnamed businessman who also participated in GIF transactions arranged by Woods.
It's also not known if the government might have arrangements with any of the named defendants, such as an agreement based on cooperation.
This article details others linked to the investigation
previously. Rusty Cranford
, a lobbyist and former executive of nonprofits, was identified as being involved in grants arranged for Decision Point,
an affiliate of Preferred Family Health Care. He also formed an LLC, Ameriworks, that might have received money from other entities. Cranford has, to date, not commented. The company with which he was associated has disavowed any improprieties.
The question everyone in politics is asking is whether there's more to come. Clearly, some resolution is necessary for parties mentioned but unnamed in this indictment. We know, too, that FBI visited other development agencies around the state that funneled GIF money to see how it was spent. The "consulting" business has become a popular thing lately in political circles. None of this is to suggest that any have committed crimes.
We know Neal is cooperating by his guilty plea. Are others indicted today cooperating? If they are, what do they know? Are others in the crosshairs? Or was the cheating on GIF money limited to these two legislators?
Today, the answers are all: I don't know.
I do know this confirms what I've always suspected about Jon Woods. He never had a job. He bragged about the good life he lived off state pay, per diem, travel and the hog slopping legislators enjoy. I should mention, too, that he was the architect of the so-called ethics amendment that provided a path to 1) longer terms in office; 2) higher pay; 3) an end-around an end to wining and dining restrictions despite the appearance that's what voters had done. Good GOP conservative politics. Shame on Warwick Sabin for throwing in with Woods on that amendment deal.