Judge won't toss suit on access to college's records

Spending of state aid at issue

FAYETTEVILLE -- A Washington County circuit judge on Thursday refused to dismiss a lawsuit seeking documents related to Ecclesia College's receipt of state money.

The lawsuit, filed Feb. 9, contends that private organizations receiving public money, engaging in activities of public interest, carrying on work intertwined with a government body or receiving grants to promote economic development are subject to the requirements of the state Freedom of Information Act.

Arkansas legislators gave nearly $700,000 of taxpayers' money from the state's General Improvement Fund to the private Christian college in Springdale.

Ecclesia contended the mere receipt of some state money doesn't make the private school subject to the Freedom of Information Act. Ecclesia also argued it is a church and nonprofit corporation and, therefore, entitled to constitutional protection. Members, faculty and staff of Ecclesia would be allowed to inspect books and records, otherwise courts would have no power to intervene, according to the argument.

The lawsuit, filed on behalf of Jim Parsons, notes only documents related to how public money was used at the college are being sought. Parsons is represented by attorneys Chip Sexton and Joey McCutchen.

Parsons is chairman of the Benton County chapter of Transparency in Government Group. He's also a former Ecclesia board member and faculty member.

Judge John Threet ruled Thursday that Parsons has made enough of a case for the matter to proceed in court.

Ecclesia's receipt of the money entered the spotlight after former state Rep. Micah Neal of Springdale pleaded guilty in federal court Jan. 4 to a single fraud charge related to taking kickbacks that totaled $38,000 for helping two entities receive grants through the General Improvement Fund.

Former state Sen. Jon Woods of Springdale; Ecclesia president Oren Paris III; and consultant Randell G. Shelton Jr., formerly of Alma, are accused in a federal indictment of participating in a kickback scheme.

Woods faces 15 counts of fraud, all relating to either wire or mail transfers of money. Paris and Shelton are named in 14 of the fraud charges. All three are charged with one count of conspiracy to commit fraud. Woods is also charged with one count of money laundering in connection with the purchase of a cashier's check.

The General Improvement Fund consisted of state tax money left unallocated at the end of each fiscal year and interest earned on state deposits. Each member of the Arkansas Legislature was allocated a share of the fund to be directed to nonprofit groups or government entities.

The Justice Department alleges Paris paid Woods and Neal kickbacks in return for $550,000 in grants from the fund from 2013 through 2014.

Woods is also accused of using his office to pass legislation in 2015 that would have created a special General Improvement Fund account in the state Department of Higher Education of up to $2.5 million. The fund would benefit only work-learning colleges that are "part of the Works College Consortium." The only college in Arkansas that is a member of that consortium is Ecclesia, according to the consortium's website. The law is still on the books, but no money was ever appropriated to the account, according to the state Department of Finance and Administration.

Shelton is accused of using a consulting firm he owned as a way to pass along the kickbacks to Neal and Woods through consulting fees approved by Paris.

Woods, Paris and Shelton have entered innocent pleas and are set for trial Dec. 4 in Fayetteville. They were first indicted March 3, with a superseding indictment filed April 18 and a second superseding indictment filed Sept. 13.

The three defendants face up to 20 years in prison on the fraud and conspiracy charges, if convicted. Woods faces an additional 10 years on the money laundering charge, if convicted.

All three may also be ordered to forfeit any money or property obtained through their actions, if found guilty.

Travis Storey, attorney for Ecclesia, had argued Ecclesia was, as a church, exempt from the Freedom of Information Act and later argued the documents sought by Parsons are covered in a protective order issued by a federal judge hearing the corruption case of Woods, Paris and Shelton.

Threet rejected the notion Thursday that the federal court's order of protection involving the cases of Woods, Paris and Shelton also applies to Ecclesia because the college is not a named party in the criminal case.

U.S. District Judge Tim Brooks issued the protective order March 27 limiting dissemination of evidentiary material related to the case to those attorneys, investigators' witnesses and others directly involved in the criminal case.

Storey said during arguments Thursday that the documents requested by Parsons are no longer in the possession of Ecclesia. Storey said Ecclesia turned the documents over to his law firm before Parsons' information-act request was made, and they are being used in the federal criminal case. But Storey said copies of the documents exist.

Also Thursday, Threet denied a motion to disqualify Storey and his law firm from representing Ecclesia in the suit. Parsons had argued that state Rep. Bob Ballinger, a lawyer in Storey's firm, may be a material witness in the suit and is expected to be subpoenaed for a deposition regarding whether he knew Ecclesia was representing itself as a church when he recommended Ecclesia receive state money, which Parsons believes would be a violation of state law.

Threet said it is too early and he would not speculate as to whether Ballinger's testimony would make him a material witness. If Ballinger were to be a material witness, his law firm could be disqualified from representing Ecclesia.

Metro on 11/11/2017

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