Surplus cash that would have paid for restrooms, generator, jail and more must go back to state, judge orders

$323,267 to pay legal costs of ex-lawmaker’s challenge

Almost $969,800 in state economic-development funding that would have paid for new restrooms in Ward's baseball park, an electric generator for the Cabot animal shelter, a jail in England and books for the Dolly Parton Imagination Library program in Pulaski County, among other things, must be returned to public coffers, Pulaski County Circuit Judge Chris Piazza ruled on Tuesday.

The judge said an October decision by the Arkansas Supreme Court clearly requires that Arkansas get its money back.

But one-third of it -- $323,267 -- must go to pay the legal expenses of Mike Wilson of Jacksonville who brought the lawsuit that led to the high-court ruling that legislators had illegally funded the program out of the state General Improvement Fund, the judge said.

Wilson said all the money will go to his lawyer, John Ogles of Jacksonville, who represented him on contingency.

State lawyers argued that none of the money could go toward legal fees. They said Piazza had the authority to allow the project spending to go forward. An appeal of his decision is expected.

Tuesday's hearing was for the judge to decide what to do with the money, which was left over from the original $2.9 million allocation, once the Supreme Court ruled it could not be spent the way the Legislature wanted.

In the ruling written by Justice Robin Wynne, the high court found that the way lawmakers allocated state funds to the grant program was too vague to satisfy requirements in the state constitution that each item of legislative spending be distinctly described.

The lawsuit was the third time in 11 years that Wilson, a former Democratic 12-term state representative, has sued over how the Legislature spends money from the improvement fund, which holds the state's surplus tax revenue and interest income.

Wilson, who has personally financed his litigation, has prevailed each time, previously winning a landmark Supreme Court ruling that bars lawmakers from personally directing how money from the improvement fund is used.

In his 2016 lawsuit, he challenged the legality of the way lawmakers had come to direct improvement fund monies to support a statewide grant program that is intended to promote economic development.

Legislators had turned the program into a "money-laundering machine" that allowed them to get around prohibitions established by the high court and direct public money to favored people and organizations, Wilson said.

The annual improvement-fund appropriation was divided between eight regional nonprofit organizations, and Wilson's lawsuit targeted the $2.9 million share that went to the organization that provides grants in Faulkner, Lonoke, Monroe, Prairie, Pulaski and Saline counties, the Central Arkansas Planning and Development District.

Since Wilson sued two years ago, a federal probe into how money was used by two of the other organizations has led to two Republican lawmakers pleading guilty and resigning their positions after investigators found they had bilked money from the grant program.

Micah Neal and Jake Files are awaiting sentencing.

Federal authorities say Files collected $26,946 through fraudulent construction billing involving a grant from the Western Arkansas Planning and Development District while Neal got $38,000 in kickbacks from grants that had been administered by the Northwest Arkansas Economic Development District.

Charged with Neal are former Republican state senator John Woods of Springdale; Oren Paris III, president of the private Ecclesia College in Springdale, and consultant Randell G. Shelton Jr.

Metro on 02/21/2018

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