Kickback jury told how job arranged

Defense: Aiding vet’s mom aim

FAYETTEVILLE — A job for a Gold Star mother was part of kickbacks to then-Sen. Jon Woods in return for state General Improvement Fund grants to Ecclesia College, the government argued Friday.

Helping the mother of his childhood friend who was killed in combat in 2011 was the act of a compassion, the defense contended.

Oren Paris III, president of Ecclesia at the time, agreed on Aug. 5, 2013, to a request by Woods to hire Elizabeth Newlun as his personal assistant, emails and text messages between him and Woods show. Woods texted Paris an electronic copy of an application form for Improvement Fund grants the same day, according to records presented at Woods’ trial in federal court.

Those Aug. 5, 2013,emails and texts were presented into evidence by the government on Friday through the testimony of Special Agent John Munns of the Internal Revenue Service. The texts show Woods and Paris arranged to meet in person specifically to discuss a job for Newlun.

Woods was indicted in March 2017, accused of a kickback scheme involving grants issued in 2013 and 2014 from the Improvement Fund. Two alleged co-conspirators — Randell Shelton, formerly of Alma, and Paris — were indicted with Woods.

Former state Rep. Micah Neal pleaded guilty to one

count of conspiracy for his part in the scheme on Jan. 4, 2017. Paris pleaded guilty this year, on April 4, also to one count of conspiracy. He resigned at the college the day before pleading guilty. Both he and Neal have agreed to testify against Woods and Shelton and are awaiting sentencing.

The government contends Paris paid kickbacks disguised as consulting fees to Shelton’s company and Shelton passed money along to Woods and Neal.

In a related development Friday, FBI Special Agent Robert Cessario will appear as demanded by a defense subpoena, but not until the defense begins its case, according to a court document filed Friday. The government expects to rest its case Wednesday or Thursday, the Justice Department said in its response to a demand Cessario appear. Cessario was lead FBI investigator in the Woods case who was barred from testifying for the prosecution after investigators discovered he improperly wiped the hard drive of a computer used to gather evidence in the case.

Woods’ and Shelton’s trial is on track to end during its fourth week, which is the week after next, U.S. District Judge Timothy L. Brooks told the jury at the end of Friday’s proceedings. Munns is scheduled to resume his testimony Monday morning.

Paris agreed to a salary of $43,000 a year for Newlun with a $7,000 bonus in advance, both the messages and previously introduced college financial records show. The newly created position of personal assistant to Paris was never advertised before Newlun was hired for it, Assistant U.S. Attorney Kenneth Elser said in opening statement in the case on April 9.

The grant application provided by Woods on Aug. 5, 2013, was filed later by Ecclesia. With Woods’ and Neal’s support, that application resulted in $200,000 in grants to the private Christian college. This was the first of more than $700,00 in Improvement Fund grants to Ecclesia by early 2015.

Newlun’s son, John W. Brown, 33, died in combat Aug. 6, 2011, along with 29 other servicemen when the Boeing CH-47 Chinook helicopter they were in was shot down in Afghanistan. Patrick Benca, Woods’ defense attorney, said Newlun had sought a new job since April of that year. Benca made that remark in his opening statement, also April 9.

“He went to bat for her to do what he could for his best friend’s mom,” Benca said in his opening statement about Woods. Woods and Brown grew up together, Benca said.

Proceedings Friday were the most openly contentious since the trial began, with a 45-minute conference while the jury was kept out of the courtroom over how the government would present its evidence. There was also a 20-minute delay in the trial later in the day, before Munns testified, in further disputes, with the jury having to leave the courtroom.

Brooks told federal prosecutors Friday morning to put the full context and full strings of email exchanges into evidence in the trial. The defense lost the afternoon round of argument, however, as Brooks allowed Assistant U.S. Attorney Aaron Jennen to introduce texts, email and telephone records without further proof they were actually sent by Paris, Shelton and Woods rather than just on accounts in their names.

Benca said in the morning dispute the government had introduced email in isolation on a variety of topics in the trial when there are email containing the entire string of conversations that would provide full context.

Elser argued many of those “string” email include names and other information that would have to be redacted.

Brooks ruled the government should introduce the full context and full strings of email exchanges, both as a matter of principle and as a practical matter to save time, even if redactions are needed.

“If you’re giving them the haystack and pulling out the needles, that doesn’t really sound fair,” Brooks said from the bench before the jury was brought in.

The dispute over the email and context broke out after legislative staff testified about email and legislative working papers normally unavailable to the public, but were subpoenaed by the government — and subpoenaed selectively, the defense argued.

Matthew Miller, assistant director of the Bureau of Legislative Research and head of its legal services division, testified Thursday afternoon and Friday morning on measures Woods had considered to help Ecclesia. Those included a proposed measure to steer state sales taxes on legalized medical marijuana to the school.

Northwest Technical Institute in Springdale and Crowley’s Ridge Technical Institute in east Arkansas would also have drawn a share of state sales taxes on medical marijuana under Woods’ draft legalization proposal, a fact brought out only upon Miller’s cross-examination by the defense Friday morning. Other beneficiaries were the Arkansas Historic Preservation fund and the state Department of Career Education.

In previously disclosed matters, Woods directed a $200,000 general improvement grant to Ecclesia in September 2013, grant records show. Neal, of Springdale, supported a $50,000 grant to the college and Woods another $150,000 in December 2014, also according to grant records. The amount of money Woods is accused of receiving as a kickback isn’t specified in the indictment. It claims much of that money was paid in cash, except for one transaction made to Woods by wire transfer for $40,000.

In one transaction, Paris authorized $50,000 to Shelton’s firm, Paradigm Strategic Consulting Sept. 27, 2013 — the same day Paris signed an agreement for the college to accept a $200,000 state General Improvement Fund grant, the indictment says. Shelton used the $50,000 that day to open an account for his business, which had been incorporated the day before, the document reads.

Less than a week later, on or about Oct. 1, 2013, Shelton transferred $40,000 by wire from that business account into the personal bank account of Woods, according to prosecutors. Defense attorneys have said the money transfers to and from Woods were loans and money to pay back loans.

Woods faces 15 counts of fraud, all relating to either wire or mail transfers of money. Paris and Shelton were named in 14 of the fraud charges. All three were charged with one count of conspiracy to commit fraud. Woods is also charged with one count of money laundering in connection with the purchase of a cashier’s check.

Woods and Neal also directed $400,000 in grant money to AmeriWorks, court and state records show. Neal said he received $20,000 delivered by Woods for steering $125,000 to AmeriWorks. Grant records show Woods directed $275,000 to the company.

AmeriWorks was incorporated by lobbyist Russell “Rusty” Cranford and described in a grant application as a work-training program. Cranford, 56, is set for trial June 11 in federal court in Springfield, Mo., on one count of conspiracy and eight counts of accepting bribes in an unrelated indictment.

Woods