SPRINGDALE -- A federal grand jury indicted former state Sen. Jon Woods, R-Springdale, on 12 counts of fraud and one of money laundering, alleging he took one bribe of $40,000 in exchange for steering a state General Improvement Fund grant to a Northwest Arkansas college, plus an undetermined amount of cash in exchange for other such grants.
Indicted along with Woods were Oren Paris III, president of Ecclesia College in Springdale, and Randell G. Shelton, Jr., a friend of Woods and of Paris who owns a consulting business, according to the indictment.
On the charges
• Eleven counts stem from mail and wire fraud incidences dated from Aug. 19, 2013, through Jan. 6, 2015. Oren Paris and Randell Shelton are named in nine counts; Jon Woods is named in 11.
• Twelveth count dated Sept. 25, 2013 relates to a $200,000 check from Northwest Arkansas Economic Development District sent by mail to Woods’ mailing address in Springdale. The count names all three men.
• Thirteenth count alleges money laundering by Woods, saying he withdrew $33,000 from his Arvest Bank account to purchase a cashier’s check payable to another person, with the money coming from the wire and mail fraud activities
Source: Staff Report
Former state Rep. Micah Neal, R-Springdale, pleaded guilty Jan. 4 to taking kickbacks from money he directed in cooperation with a then-unnamed state senator.
The indictment also says Woods and Neal took bribes from a businessman and lobbyist whose name it didn't disclose. Referred to in the indictment as "Businessman A," the businessman's project got $400,000 in General Improvement Fund money.
"Businessman A" returned the money "shortly after being contacted and interviewed by federal law enforcement officials regarding his dealing with Woods and other matters," the indictment says.
The indictment doesn't say how much in kickbacks Woods received from "Businessman A" for the grant, but said the payment was in cash and amounted to at least several thousand dollars. Further payments to Woods through Shelton were also in unknown cash amounts of at least several thousand dollars, the indictment said.
Woods is named in all 13 counts of the indictment issued Wednesday. Paris and Shelton are named in 10.
The General Improvement Fund is unallocated state tax money at the end of each fiscal year and interest earned on state deposits. Each legislator is given a share and can earmark where he or she wants it to go as long as it goes to a nonprofit group or government entity.
The money is administered through one of the state's eight economic development districts. Grants directed by Neal and Woods came through the Northwest Arkansas Economic Development District, based in Harrison.
The college benefiting from the kickback scheme, called "Entity A," isn't named in the indictment, but Paris is identified as its president.
Messages for Woods and Paris on their respective cellphones weren't returned Thursday night. Paris also didn't respond to an email seeking comment, and Woods didn't respond to a text message, both sent Thursday evening.
The only phone number found for Shelton rang twice and went dead, so no message was left.
All three are set for arraignment in U.S. District Court in Fayetteville at 1:30 p.m. March 28.
Woods directed a $200,000 in grant to the college on Sept. 27, 2013, according to the indictment. Woods directed a $200,000 grant to Ecclesia on Sept. 27, 2013, financial records from the development district show.
Woods also sought grants for the private, Christian college from other legislators from their portion of improvement money, according to the indictment. Nine Northwest Arkansas legislators requested $592,500 for the school. Woods directed the most at more than $350,000 total, records show.
On or about April 21, 2013, Paris sent a text message Woods: "Good selling point to conservative legislators is that (Entity A) produces graduates that are conservative voters. All state and secular colleges produce [a] vast majority [of] liberal voters."
"Agreed," Woods texted back.
Another $100,000 from the fund to Ecclesia came through the West Central Arkansas Planning and Development District in Hot Springs. The only documents from legislators provided by that district in support of the grants came from Woods.
Ecclesia College is a work-learning college, allowing students to earn money toward tuition and graduate with much less debt than the average university student, according to the school website. It offers three associate of arts degrees, 12 bachelor degrees and one graduate degree. The school was founded in 1975.
Beginning at least as early as January, 2013 and until about October, 2015, the three men devised a "schemed and artifice to defraud and deprive the citizens of the State of Arkansas of the honest services of a public official through bribery," the indictment says.
Paris enriched himself, his family and "Entity A by paying bribes to Woods and Neal, through Shelton, in exchange for the use of their authority as legislators to obtain and direct GIF monies to Entity A," it says.
Shelton kept a portion of the bribe money paid to Woods and Neal through Shelton's consulting company, according to the indictment.
"Woods solicited, and Woods and Neal accepted, payments from Paris and Entity A," the indictment said. Also, "Woods solicited Paris to provide employment to Person A, a friend of Woods."
Shelton kept a bank account in the name of his consulting firm. The college would write a check to the consulting firm "as a pass-through," the indictment said. Shelton would deposit the checks from the college and make payments to Woods.
"From approximately June 1, 2012 to approximately May 31, 2016, Paris received more than $300,000 in compensation from Entity A," the indictment says. "During the same period of time, Paris, his immediate family members and their spouses received in excess of $1 million from Entity A."
Woods emailed Paris the application needed for grants, according to the indictment, according to the indictment.
After the grant was awarded and the college received $200,000 in grants, Paris' college signed a contract with Shelton's newly formed consulting company and paid it $50,000 on Sept. 27, 2013. On Oct. 1, Shelton transferred $40,000 from the company's account "to Woods' personal Arvest Bank account," the indictment says.
"By a resolution dated Oct. 3, 2013, the same day Entity A deposited $200,000 in GIF monies, Entity A's Board of Governance approved a $25,000 bonus payment to Paris," the indictment says.
Late Thursday, Phil Brassfield, chairman of the board at Ecclesia College, posted a letter on the college's Facebook page addressed to "Dear Brothers and Sisters."
"It is with heavy hearts that we learn of the charges made by agents of the federal government against our friend and brother, Dr. Oren Paris," wrote Brassfield. "While the allegations made against Oren are to be taken seriously, we are confident once all the facts and the truth are made known, all will come to understand as we on the Board of Governance believe, that Oren has acted at all times with absolute integrity and always in the best interest of Ecclesia College. We are at peace in the knowledge that Oren is a godly leader, a loving husband and father, a vigilant shepherd and a faithful servant. It is in this confidence that we as a board remain loyal and steadfast with our brother in Christ."
The board agreed unanimously Paris should continue to serve as the college president "through these challenging times," according to the letter, which was signed by Brassfield and six other board members.
According to the college's website, ecollege.edu, its board has 10 members, including Paris, but it appears the website hasn't been updated lately since Brassfield is listed as the president and not chairman.
"To the faculty and staff, students, parents and friends, we ask you to join us in prayer for Oren, his family and for our wonderful institution," according to the letter.
An unrelated Benton County Circuit Court lawsuit filed Oct. 31 lists a 8532 Carrie Smith Road address as Shelton's home. Ecclesia bought the house at 8532 Carrie Smith Road in 2013, according to Benton County records.
Secretary of State records dated Sept. 26, 2013 show Shelton as the incorporator of Paradigm Strategic Consulting. The incorporation has since been revoked, according to the office.
Shelton incorporated Shingle Resource on Jan. 8, 2015. The incorporation records list Paris as a company's manager and the Carrier Smith Road address for the company.
Ecclesia bought almost 50 acres with the state money, although it already owned more than 200 acres, according to state and county records. The school purchased two properties in 2013, both for well over the county-appraised value, Benton County records show.
Ecclesia said in its grant applications it needed the land for student housing to accommodate rapid growth in its fall 2013 and fall 2014 enrollments, but the Springdale building department shows no new buildings or structural renovation have occurred on the properties.
Woods also accepted payments along with Neal for getting $400,000 in improvement grants to the project of "Businessman A." Development district records show the only entity to get a grant that large was AmeriWorks, a Bentonville-based company set up to train disadvantaged workers.
Those records also show $400,000 was returned on behalf of the project by Milton R. "Rusty" Cranford, a lobbyist and incorporator of AmeriWorks.
Calls to both the Cranford Coalition, his lobbying firm, and his cellphone number as listed in the grant documents have not been returned.
Neal plead guilty to accepting $20,000 in kickbacks in exchange for directing $125,000 to AmeriWorks. Woods directed the remainder of the $400,000.
Neal and Woods began supporting the grant for AmeriWorks two months before it incorporated in 2013, according to government records. AmeriWorks signed an agreement accepting the grant Sept. 26, 2013, the day before the company's incorporation was filed Sept. 27, 2013, according to the records of the Secretary of State's office.
Despite the grants, AmeriWorks failed to gain additional financial support and never got off the ground, according to the August 2014 letter from Cranford to the Northwest district returning the money.
Gov. Asa Hutchinson, among others, said after Neal's guilty plea distribution of General Improvement Fund money at lawmakers' discretion should end.
The legislative Joint Budget Committee is scheduled to consider a bill Monday by Sen. Trent Garner, R-El Dorado, to do away with the current system of awarding improvement money. Senate Bill 325 would put the money into an emergency fund requiring approval of the full Legislature or the legislative council between sessions to authorize the governor to spend the money.
Woods served three terms in the state House before defeating incumbent Sen. Bill Pritchard, R-Elkins, in 2012. He announced in November 2015 he wouldn't seek re-election.
Records from Arkansas Legislative Audit, the Bureau of Legislative Research and the state Senate show Woods claimed the largest amount of expenses last year among senators -- $33,692, according to a report in the Arkansas Democrat-Gazette.
Woods' expenses included $1,905 to attend the Southern Legislative Conference's annual meeting in Lexington, Ky., in July and $3,094 to attend the Council of State Government's conference in Williamsburg, Va., in December, according to legislative records.
NW News on 03/03/2017