LITTLE ROCK — The indictment this week of a former Arkansas state senator and two other people on fraud charges, following a former House member’s guilty plea in January in the same case, is driving calls by some for ethics reforms at the state Capitol.
Former Republican Sen. Jon Woods of Springdale, has been indicted on 11 counts of wire fraud, one count of mail fraud and one count of money laundering.
Also, Oren Paris III of Springdale, president of Ecclesia College in Springdale, and Randell Shelton Jr. of Alma, a consultant, have been indicted on nine counts each of wire fraud and one count each of mail fraud.
On Jan. 4, then-Rep. Micah Neal, a Republican from Springdale, pleaded guilty to a fraud charge in the same case. He has not yet been sentenced.
Federal prosecutors say that between 2013 and 2015, Woods and Neal authorized and directed the Northwest Arkansas Economic Development District to award about $600,000 from the state’s General Improvement Fund to Ecclesia College and another nonprofit entity.
The indictment alleges that Woods initially directed $200,000 to the college and later directed another $200,000 to the college in concert with Neal, all in exchange for kickbacks. To pay and conceal the kickbacks, Paris allegedly paid a portion of the money to Shelton’s consulting company.
According to the indictment, Shelton kept some of the money and paid the rest to Woods and Neal. Paris also bribed Woods, the indictment alleges, by hiring Woods’ friend at the college in an administrative position.
Woods did not return a call Friday seeking comment.
A call for Paris at Ecclesia College on Friday was answered by an employee who referred the reporter to a statement on the college’s Facebook page signed by its board of governance.
“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,” the board said in the statement.
The board said Paris is “a man of proven character” and said it wants him to continue serving as president.
Calls to a number listed for a Randell Shelton went unanswered Friday.
Calls for change
Surplus state funds that remain after budgeted items are funded go into the General Improvement Fund, along with interest earned on state deposits. The state’s eight economic development districts administer the money, and legislators can request that money be directed to specific government or nonprofit entities.
Gov. Asa Hutchinson said after Neal’s plea he had concerns about the current system for distributing GIF money. He reiterated his concerns Friday.
“I have been engaged in public service for most of my life, and the allegations of the federal indictment are very troubling. Charges of corruption and bribery undermine the rule of law that is the underpinning of our system of government. The charges are unproven at this point, but the indictment is a reminder to all in office of the public trust we hold,” Hutchinson said in a statement.
“The charges also reaffirm my concern about legislative GIF money and why we need to end it. I will work with the Legislature on better ways to handle any surplus, including the idea of directing surplus to a reserve fund,” he said.
Sen. Trent Garner, R-El Dorado, filed a bill last month, Senate Bill 325, to end the current system of distributing GIF money and instead direct the money to a reserve fund.
“I felt before this that it was a flawed system, but with the indictments, it definitely adds more credibility (to the position) that this is a flawed system and needs to be replaced,” Garner said Friday.
In addition to opening a door for corruption, the system unfairly “picks winners and losers,” Garner said. He said he would like to see surplus money used for statewide needs such as highways.
House Speaker Jeremy Gillam, R-Judsonia, said Friday he does not expect to see surplus funds from the current fiscal year directed to projects through the economic development districts.
“I think the vast majority are comfortable with and very much OK with us going down the route of putting that money in other areas,” possibly including paying down bond debt, he said.
Gillam said he did not have a position on Garner’s bill but would study it if it gets out of the Senate.
David Ray, state director of the group Americans For Prosperity, said in a statement Friday, “The practice of using General Improvement Funds as an earmark slush fund for legislators must end. Not only is it wasteful and financially irresponsible, but it puts legislators in a position to abuse the system through corruption. The Legislature and the governor should abolish this practice, much like Congress has put an end to earmarks at the federal level.”