BRENDA BLAGG: Another pleads guilty

Lawmaker admits to felonies involving state money

Posted: January 31, 2018 at 1 a.m.

Another Arkansas legislator is out because of misdeeds in office.

State Sen. Jake Files, R-Fort Smith, resigned his office Tuesday by sending a letter to the governor.

Files, who had been chairman of the Senate's Revenue and Taxation Committee, pleaded guilty on Monday to federal charges of wire fraud, money laundering and bank fraud.

Files promised to resign promptly, as he should. His Fort Smith area constituents deserve honest representation. So do all Arkansas constituents of those we send to the state Legislature or entrust with other public office.

More about Files' particular failings shortly, but remember that he is the second state lawmaker to plead guilty to charges related to misuse of state surplus funds, known as General Improvement Funds.

Former state Rep. Micah Neal pleaded guilty last January to a charge of fraud related to a case in which he and another state lawmaker, former Sen. Jon Woods, allegedly received kickbacks after channeling state funds to a Springdale college. Woods and Neal, both Republicans, represented legislative districts that included the college.

Woods and two others, one the president of Ecclesia College and the other a consultant, are also charged in the kickback scheme. All three have pleaded innocent to federal corruption charges. They are scheduled for trial in April.

Neal is cooperating with federal prosecutors and has yet to be sentenced for his fraud plea. The charge carries a potential penalty of up to 20 years in prison, a fine of up to $250,000 plus some restitution. His punishment will supposedly be on the lower end of that spectrum because of his cooperation.

Files hasn't been sentenced yet either, having just entered his guilty plea. The federal court's probation office must first complete a pre-sentence report for the court.

His eventual punishment could prove pretty steep, given that he has admitted to three felonies.

Wire fraud and money laundering charges against Files arise out of a case involving state money secured to build a Fort Smith softball complex. The bank fraud charge against him relates to a loan he got, promising a forklift he didn't own as collateral.

The scheme, which included having an employee file a fictitious bid for work on the softball complex, was a complicated one.

It, like the one involving the Springdale college, involved getting General Improvement Funds for a local project.

The latest incarnation of GIF funding had required that such grants, formerly determined by individual legislators, be awarded through one of the state's planning and development districts.

The money Files managed to get redirected to him had been allocated to Fort Smith for the softball complex through the Western Arkansas Planning and Development District. Money for Ecclesia College that Neal and Woods and the other two defendants allegedly pocketed passed through the Northwest Arkansas Planning and Development District.

Such funds have long been a source of legislative mischief, although they have most often gone to good purpose, funding all manner of local projects for which there were no other resources.

Many a community building or public park got fix-up money through the largesse of hometown lawmakers.

The problem was that there were constitutional issues about how the public money was getting to local projects.

Court challenges brought about the change that stopped individual lawmakers from making the direct decision on which projects got money.

Yet another court case has since invalidated the practice of running GIF money through the planning and development districts.

Mind you, the wishes of individual legislators still mattered in how those funds eventually got dispersed.

This particular court ruling found that the Legislature's appropriations of this particular money hadn't spelled out the purpose of the funding. That made the appropriation unconstitutional.

Last year, the Legislature instead put surplus funds into a rainy-day fund, leaving its use primarily to the governor. Presumably, they will do something similar this year when they gather for their fiscal session.

With the examples -- and courtroom experiences -- of their former colleagues top of mind, lawmakers should perhaps avoid such a direct hand in how state dollars get spent.

Commentary on 01/31/2018