BRENDA BLAGG: GIF keeps giving

Governor pitches way local funding may continue

Testimony painted the picture of corruption.

There he sat, a once-trusted state lawmaker admitting he had accepted cash kickbacks of state grant money, thousands of it in $100 bills stuffed into a bank envelope and delivered to him behind his family's Springdale restaurant.

The former lawmaker is Micah Neal, who pleaded guilty in January last year to one count of conspiracy in the kickback scheme.

Yet to be sentenced, Neal was the lead witness in the ongoing federal trial of another former lawmaker, state Sen. Jon Woods, also a Republican from Springdale.

Woods and Randell Shelton, a consultant implicated in the scheme, are on trial now in U.S. District court in Fayetteville. The trial, which began April 9, has been a long time coming.

Another defendant, Oren Paris III, former president of Ecclesia College in Springdale, pleaded guilty a few days before trial to one count of conspiracy. He, like Neal, will testify for the government.

According to federal prosecutors, the lawmakers directed hundreds of thousands of state dollars to the college. They contend Paris disguised kickbacks to the lawmakers as consultant fees paid to Shelton's firm and that Shelton passed the money on to the lawmakers.

The prosecution is meticulously working to make its case against Woods and Shelton, who both face multiple fraud counts. Woods is also charged with one count of money laundering.

The trial has moved into its second week with testimony focused on the finances of the accused lawmakers and the college as well as the Northwest Arkansas Economic Development District.

Eventually, the charges will be proved or not by where the money trail leads. That is to be determined, as is the defense Woods and Shelton will offer.

What is known is where the money came from. These were among the infamous General Improvement Fund dollars over which the state seems to stay in trouble.

Through the years, different governors and Legislatures have come up with ways to direct that GIF money to particular projects.

The most recent approach allowed lawmakers to influence how the money got spent through one of the eight economic development districts in the state. The agency boards made the decisions but generally acquiesced to spend the money as lawmakers wanted.

Most of the time, lawmakers are just seeking credit for helping out constituents and lining up some future votes.

Woods and Neal got the NWA Economic Development District to put GIF money into Ecclesia College and another group. What happened next is what this ongoing corruption trial is sorting out.

Fortunately, this specific incarnation of the GIF process is gone now. It has been declared unconstitutional.

Mike Wilson, a former state representative and attorney from Jacksonville, got the decision from the Arkansas Supreme Court in a 2016 lawsuit.

It is not Wilson's first rodeo over GIF funds. He had won an earlier Supreme Court case that stopped lawmakers from personally directing how GIF money would be used. Now he's stopped the use of regional agencies as a conduit for their preferences.

Further, if the sitting governor is right, the GIF program is officially over.

Gov. Asa Hutchinson, asked Monday about the future of the funding, flatly said GIF money "is history."

The question came from a small-town mayor.

"Is there any discussion that it might be put back in effect or is there any way we can figure out how to do it where it don't get squandered?" the mayor asked.

His is a tiny town with a population that doesn't break a thousand. It has severely limited resources and, like many other such places, has looked to GIF funds to pay for some special project.

Maybe it got a roof on a community building or some park equipment. Whatever, the state money has been a welcome resource for all kinds of community needs.

Gov. Hutchinson didn't quash all hope that the state might help again.

His administration is studying the possibility of competitive grants to communities, he said.

The state now awards rural community grants through a division of the Arkansas Economic Development Commission. Cities with populations less than 3,000 and unincorporated areas can get $15,000 grants to match local contributions of cash or in-kind materials and labor.

Hutchinson suggested something similar might be possible for places with greater population.

Just as surely as the state collects taxes, there will be accumulations of unused state money in state accounts in the future and there will be earnings on state deposits.

They may never call it a General Improvement Fund again, but lawmakers and the governor will figure out what to do with that money, preferably for the good of the state.

Commentary on 04/18/2018

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