The GIF horse
Our tax money
Our state’s General Improvement Fund program, used for years by legislators supposedly to fund needed community projects, created instead an irresistible invitation for some to harvest the fruits of graft and corruption.
That’s evidenced by the ongoing FBI investigation, in-depth news stories, and former legislators and businessmen charged with allegedly using the program to commit fraud.
What’s to be expected when Arkansas basically showered our surplus tax dollars on elected legislators to administer as they chose? The only nod toward oversight was district planning and development boards that cleared obliging pathways rather than creating speed bumps for distributing the grants.
And, as a news story by intrepid reporter Lisa Hammersly disclosed the other day, we are talking about 4,200 GIF grants totaling some $50 million in only four years.
The reporter was correct to point out that the grant recipients reviewed for the story by the paper were not under federal investigation, nor are there formal allegations of intentional wrongdoing.
However, for me, the way our money was spent and misapplied under the now-defunct program (that required no financial record keeping) is inexcusable. I don’t blame the governor for shutting it down last year after the alleged corruption at Springdale’s Ecclesia College came to light. That revelation soon spread to state Sen. Jake Files’ questionable grant for a needed athletic park in Fort Smith that went nowhere.
There’s no room for this sort of self-serving, kickback-prone program in our elected government. I’m not saying some legislators haven’t properly and productively used the grants to help improve their communities. Some did follow the rules and tried to ensure financial accountability.
Hammersly discovered a lot of other instances with far different outcomes. Her reporting began with a story about the GIF grant for $60,000 to build a 3- to 4-bedroom single-family home on a lot to benefit homeless veterans in West Memphis. Yet Green Party Rep. Fred Smith, who secured the grant and is now out of office, says he didn’t know the veterans home wasn’t operating. Creative Strategies Community Development Corp., which received the grant, did buy a small low-rent, two-bedroom house that once did house a veteran who departed and which is now occupied by a renter.
Smith says he doesn’t know why the larger house was never built as touted. Creative Strategies does lease the existing home, but buying a lowrent home wasn’t the original request behind acquiring the grant. And it doesn’t sound nearly as appealing on paper as building a larger home for homeless veterans, does it?
There were other examples of shortcomings in what I like to call Arkansas’ “Daddy Warbucks” GIF(t) program. Thanks goodness our state Supreme Court found the GIF mess unconstitutional last October.
Hammersly’s story cited one example after another of serious problems and/or lack of oversight.
For instance, in 2013 there was a $50,000 GIF to Eagle Family Ministries of Bentonville, led by a husband and wife, that reportedly arranges marriage retreats to Branson while assisting the disadvantaged in south Arkansas. As with others in Northwest Arkansas, it offered no invoices or receipts for the GIF money. Sen. Bart Hester released those funds from his share.
The Mid-State Affordable Housing Corp. of Benton got three GIF awards totaling $115,000 beginning in early 2014 thanks to 10 lawmakers who approved those grants supposedly to build homes for low- and middle-income buyers. Problem is, those funds have only purchased four empty lots.
The private Shiloh Christian School of Springdale in 2014 received $10,000 for coaches and players to attend a training and leadership development conference in Nashville. The request failed to name the conference or who conducted it and offered no supporting records. It was sponsored by former Sen. Jon Woods, who is facing fraud charges related to GIF grants to Ecclesia College, also in Springdale.
The dubious list raises so many questions with similar examples throughout the news story.
State auditors (with little to audit) in 2004 warned of the program’s potential for waste, fraud and abuse. Obviously few were listening. Then last spring came that Ecclesia College scandal involving Woods, former Rep. Micah Neal and others. The debacle has been making headlines since.
Ya gotta wonder why officials aren’t closely examining the entire program from top to bottom, considering the stench of self-serving it’s left lingering over our state.
I appreciated the rhetorical question from former Rep. Mike Wilson: “How do you go about curing a system that was born bad, grew up bad?” Why not build in and follow safeguards?
Hammersly’s admirable type of First Amendment reporting sheds light necessary for our democratic republic to survive: nonpartisan, factbased news gathering that objectively informs without favor and helps keep the weaker-willed honest.
Mike Masterson is a longtime Arkansas journalist. Email him at mmasterson@arkansasonline.com.