Judge refuses to dismiss Ecclesia FOIA case

Posted: November 10, 2017 at 1:05 a.m.

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

The lawsuit, filed Feb. 9, contends 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.

General Improvement Fund

A fund consisting of state tax money left unallocated at the end of each fiscal year and interest earned on state deposits. Each legislator was, in the past, given a share of the fund to be directed to a nonprofit group or government entity. The governor’s budget this year didn’t include surplus money for legislators to spend. The fund was found to be unconstitutional by the Arkansas Supreme Court in October.

Source: Staff report

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 FOIA. Ecclesia also argued it's 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.

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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 representative 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; Oren Paris III, president of Ecclesia College in Springdale; 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 legislator 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 a total of $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's 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 not guilty 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, argued Ecclesia was, as a church, exempt from the FOIA 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 the federal court's order of protection involving the cases of Woods, Paris and Shelton also applies to Ecclesia because the college isn't 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 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' FOIA request was made and 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 FOIA case. Parsons argued state Rep. Bob Ballinger, a lawyer in Storey's firm, may be a material witness in the FOIA case 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's too early and he wouldn't speculate as to whether Ballinger's testimony would make him a material witness in the case. If Ballinger were to be a material witness, his law firm could be disqualified from representing Ecclesia.

NW News on 11/10/2017