The Arkansas Democratic Party today demanded that Republican Attorney General Leslie Rutledge and the State Police investigate lawmakers’ “fraudulent use of state money in a kickback scheme through the General Improvement Fund.”

The statement was prompted by an Arkansas Democrat-Gazette article Sunday about $40,000 of surplus money (the General Improvement Fund, or GIF) sent at the direction of various Republican legislators, including two under indictment, to an unknown, recently incorporated outfit in Saline County promising research in something called ozone therapy. As yet, no records have emerged to indicate anything worthwhile was done with this money.  The Arkansas Times, relying on records digging by blogger Russ Racop and our own FOI requests, first reported this dubious spending at legislative direction 10 months ago. We also, it should be noted, raised a ruckus about the hundreds of thousands misspent at Republican legislative direction on the Ecclesia College in Springdale, long before it became the focus of federal charges naming two former legislators, a bagman and the college president in a kickback scheme.

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So welcome to the party, other media and Democrats.

Some thoughts.

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First, Attorney General Leslie Rutledge investigate Republican legislators? That will be the day.

Also, the GIF money IS under investigation by federal authorities. More indictments have been predicted. I’m not sure there are sufficient investigators and time to detail each of the discrete items of misspending of the GIF money at the direction of legislators. But it’s also important to remember that misspending of state money does not always equal a criminal act. When Sen. Jeremy Hutchinson got some of his GIF money spent on a Benton fireworks show, for example, it might have done offense to the state Constitutional prohibition on spending of legislatively appropriated money on local legislation. But unless someone got a kickback (and nobody has alleged that in the case of the fireworks) it isn’t a crime. As yet, nobody has offered evidence of kickbacks on the ozone therapy boondoggle funded by the $40,000 shipped to Saline County. The involvement of two legislators who HAVE been charged in unrelated instances with engaging in the Ecclesia kickback scheme naturally raises suspicion.

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So the Democrats, here, are making political hay out of recent headlines. Fair game in politics. But Democrats, though in the minority, also guided the spending of some of the GIF money. Mike Wilson, who has sued over the practice, and the Arkansas Times have detailed some other questionable uses of that money, such as sending tens of thousands of dollars to select nonprofits to allegedly buy holiday turkey dinners for poor folks.

In short: Careful what you wish for.

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From the Democratic Party news release:

The GIF’s intended purpose is to give lawmakers resources to improve communities and towns, but was chosen as the preferred method of the money-laundering scheme because of the limited oversight and accountability involved in the approval process.

“When you hold a position of power, you have the opportunity to use that power for the good of the people, or to use it for selfish gain,” Party Chairman Michael John Gray said. “It would appear many legislators have chosen the latter. The FBI has taken notice, already issued one indictment, and they’ve warned more may come. This money could have been used to bolster community programs such as emergency services and food pantries. Instead, these legislators chose to put themselves over their communities.”

“While the GIF money is no longer in the hands of these fraudsters, Governor Hutchinson and Attorney General Rutledge have not mentioned these illegal acts once,” Chairman Gray continued. “An Attorney-General led investigation on the matter should already be underway, but since it’s not, I am calling for one today to get to the bottom of this. It’s now known that these representatives stole at least $40,000 from the Arkansas taxpayer. We must find out exactly how much money was stolen, where the money went, and who was involved.” 

Again, Rep. Gray, bolstering local programs — no matter how noble — might be unconstitutional, too, if not criminal absent kickbacks. Also, Gov. Asa Hutchinson has long wanted to end the GIF program and finally, in 2017, it did come to a halt.

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