Former state lawmakers Jon Woods and Micah Neal requested state grants totaling $400,000 be sent to a Bentonville-based nonprofit, according to regional development district records.
Neal pleaded guilty Wednesday to receiving kickbacks, one each in 2013 and 2014, in exchange for steering state grants to two nonprofit entities, according to the plea. The details of those grants match particulars given in court documents that involve Neal's plea.
Calls and text messages to Woods were not returned Monday. Woods, a state senator since 2013, dropped out of his re-election bid in November 2015 citing family considerations and is now out of office.
The senator who facilitated the kickbacks was not named in the plea agreement.
The Northwest Arkansas Economic Development District distributed the state General Improvement Fund grants referenced in Neal's plea. The development district did not know about the kickbacks, according to a statement it released Friday.
DECISION POINT/AMERIWORKS GRANT
Court documents say that an unnamed state senator in 2013 "advised Neal that if Neal, as an Arkansas representative, authorized and directed GIF money to Entity A, then Person A would pay Neal a portion of the money in exchange for Neal's official action."
Neal, then a member of the state House, and the senator directed a total of $400,000 in grants to Entity A "in exchange for kickbacks they would receive," the court documents said. Neal directed $125,000 of the money to Entity A, and the senator directed $275,000, court documents show.
The development district issued only one grant for $125,000 in that time frame that was attributed to Neal, district records show. That grant was to "Decision Point d/b/a Ameri-Works," according to records obtained from the district through the state Freedom of Information Act.
Woods directed a General Improvement Fund grant of $275,000 to the same entity on the same day, the district records show.
Decision Point Inc. in Bentonville provides behavioral and substance abuse treatment. Decision Point was considering a collaboration with AmeriWorks, a Bentonville-based company, on a jobs training program, according to a statement issued by Decision Point's parent company on Friday. Decision Point ended the plans, returned the state grant in full and did not pay any kickback, the company said. Development district records confirm the money was returned in full in August 2014.
Decision Point received $509,000 in improvement grants in 2013 and 2014 combined, according to an Aug. 28, 2015, investigation report by the state Legislative Audit.
The Neal and Woods grants account for all but $109,000 of that. If any other legislator had requested an approved grant of $275,000 for Decision Point from the district, the total shown in the audit would have exceeded that amount.
Development district records for grants issued at the request of Sen. Bryan King, R-Green Forest, show that he requested no grants for Decision Point. King is the only senator besides Woods who lives within the Northwest Arkansas Economic Development District area whose election history matches a description of the unnamed senator in the court documents.
The court documents say a confirmation letter was sent to "Person A" to notify him that the grant had gone through, and that the letter was dated Sept. 27, 2013. The letter was sent to Milton "Rusty" Cranford, president of "Decision Point, Inc. d/b/a AmeriWorks," according to a copy of the letter obtained Monday. Attempts to reach Cranford through both his lobbying firm in Little Rock and through Decision Point's parent company received no response Monday.
According to Neal's plea documents, he was paid $20,000 in cash.
ECCLESIA
Court records also say Neal and the senator agreed to direct a total of $200,000 of grant money to a "nonprofit corporation operating a college located in Springdale" in 2014. The Legislative Audit report shows just one college matching that description that received at least $200,000 in 2013 or 2014: Ecclesia College.
According to the plea, Neal agreed to request a $50,000 share of the grant and the senator would request the remaining $150,000.
Development district records show the only grant Neal requested for $50,000 that went to a private college was for Ecclesia, awarded on Dec. 18, 2014. The day before, Woods requested a grant of $150,000 to Ecclesia, according to the district records. This was in addition to a $200,000 grant issued at Woods' request to Ecclesia on Sept. 18, 2013, records show.
King's records show no grants requested for Ecclesia.
On Jan. 5, 2015, a check paid $65,000 to a consulting company, according to court documents that did not name the company. The company deposited the check. Neal was paid $18,000 in cash by the president of that unnamed consulting company by Jan. 30, court documents say.
Ecclesia President Oren Paris III issued a statement Thursday denying any wrongdoing by him or any member of the college's staff.
IMPROVEMENT FUND
The state money for the grants was allocated from appropriation bills that Neal and his cooperating senator sponsored and approved, the documents say. Emails obtained during an investigation of the grants by the U.S. Department of Justice show Neal and the senator directing where the district was to send the money, according to the plea documents.
Lawmakers used to appropriate General Improvement Funds directly for local projects. That was ruled unconstitutional in 2005. Direct appropriations to local projects such as street improvements and support for local charities did not meet the definition of having a statewide benefit, as required in the state constitution for state spending.
The Legislature reacted to the ruling by appropriating some improvement fund money to the various development districts around the state, which were authorized by state law in 1969. These districts award money to local projects through grants, with lawmakers advising the districts where they would like the grants to go. This system is also subject to a legal challenge that is currently on appeal.
NW News on 01/10/2017