Brenda Blagg: Corruption on the menu

Neal’s guilty plea starts unraveling a mystery

News this week that state Rep. Micah Neal pleaded guilty to a kickback scheme is doubly distressing.

This isn't some stranger in a position of public trust who violated his oath of office and his obligation to the people who elected him.

This is Micah Neal, first known to many of us as the smiling face behind the counter at Neal's Café, the affable man who visited from table to table in the family-owned restaurant, often discussing local politics.

He eventually turned that interest in politics into a run for public office, winning a seat on the Washington County Quorum Court.

There, he quickly proved himself as a leader, in time chairing the court's Finance Committee and winning the confidence of fellow justices of the peace as they collectively oversaw the county's budget.

In 2013, he moved on to the state Legislature to represent the House district that includes Springdale. He is wrapping up his second legislative term this week, having elected not to seek re-election. Instead, Neal ran last year for county judge, a post to which he seemed particularly well suited. He won the Republican nomination, then surprisingly dropped out of the race last summer.

He said then he was leaving the race because of family and business reasons. He also leased a house in Benton County, making him ineligible to serve as Washington County judge and clearing the way for local Republicans to choose another candidate.

It's obvious now that a federal investigation into Neal's legislative service may have been the real inspiration for his withdrawal. The FBI and the Internal Revenue Service conducted the investigations.

Neal knew when he dropped out of the political arena that he had accepted $38,000 in kickbacks in exchange for funneling state money to two nonprofit entities.

All the details aren't publicly known yet about who all was involved or what entities benefited. But Neal's role is known. The lawmaker pleaded guilty to federal charges that could put him in prison for up to 20 years, cost him a fine of up to $250,000 and require some restitution.

His punishment isn't likely to be all that harsh. He is cooperating with the Justice Department and has pledged to continue as part of the plea agreement.

What Neal pleaded guilty to was a single count of conspiracy to commit "honest services" fraud. The federal crime is a type of fraud committed by public officials, who literally owe honest service to the public.

The state dollars involved in Neal's crime were from what is called the General Improvement Fund, a pot of state money made up of unspent appropriations from the previous fiscal year plus interest earned on state deposits.

Through the years, governors and successive Legislatures have fought over who should decide where that GIF money is to be spent. The then-Democrat-controlled Legislature wrested control of half of the projects from then-Gov, Mike Huckabee, a Republican, in 1997.

Essentially, when time comes to split the money up, lawmakers pitch projects in their respective districts, although litigation has complicated the process. Money still gets to local projects but it goes through state agencies and regional entities.

Court documents didn't name the two Northwest Arkansas nonprofits on the receiving end of these particular GIF fund disbursements, which came through the Northwest Arkansas Economic Development District in Harrison.

One nonprofit corporation, associated with a health care provider with a Northwest Arkansas presence, allegedly paid Neal a kickback as part of an effort to obtain a $400,000 state appropriation. The money was "purportedly sought to create manufacturing jobs in Northwest Arkansas, specifically for a specialized workforce including disabled veterans, disadvantaged youth and individuals recovering from substance abuse."

Some money ended up lining Neal's pockets, as did part of a $200,000 grant earmarked for "a nonprofit corporation operating a college located in Springdale, Arkansas."

The descriptions point to Decision Point and to Ecclesia College. Decision Point offers rehabilitation programs locally for alcohol and substance abuse. Ecclesia College is a Christian college located in Springdale. Both nonprofits were among recipients of grants, utilizing GIF funds, from the Northwest Arkansas Economic Development District. The district serves several counties, including Washington.

Neal's involvement apparently happened in his first term in the Legislature, which began in 2013. The story began to unravel as the Northwest Arkansas Economic Development District underwent an audit investigation in 2015.

While Neal's part in the scheme may be known, the investigation, now in federal hands, is far from done.

An as-yet-unnamed state senator is implicated in this case.

While court documents haven't identified him, a description in those documents narrowed the possibilities. The implicated senator was identified as serving in the Arkansas Senate from 2013 to the present and as having been a state representative from 2007 to 2012.

Only two people from Northwest Arkansas fit the description: Sens. Jon Woods, R-Springdale, and Bryan King, R-Greenwood. King has denied any involvement.

The political careers of Woods and Neal are intertwined. Woods, who opted to seek a Senate seat in 2012, had held the House seat Neal ran for and won that same year.

Last year, Woods dropped out of his bid for re-election to the Senate but resurfaced when Neal pulled out of the county judge's race.

Woods was one of three Republicans who offered themselves as replacement nominees for county judge. He lost in a vote of county convention delegates.

In time, we'll know who the implicated senator is and what other charges might arise.

For now, sadly, we know of Neal's failings.

Commentary on 01/08/2017

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