Details emerge on kickbacks

Audit sheds light on Neal case

SPRINGDALE — State audit records show Ecclesia College in Springdale is the only college receiving at least $200,000 in state General Improvement

Funds in the manner de- scribed by

Rep. Micah Neal in his guilty plea to a kickback scheme.

Neal, R-Springdale, pleaded guilty in federal court Wednesday to taking two kickbacks totaling $38,000. The money was a portion of grants he helped arrange from the state General Improvement Fund. One grant totaled $200,000 to a college in Springdale, according to court documents. The other was for $400,000 to a nonprofit workforce training program. Neither entity was named in the court documents.

Neither a phone message left with Ecclesia’s receptionist nor an in-person message left for school President Oren Paris III on Thursday afternoon requesting comment were returned. Attempts to reach Paris and other officials at the school Wednesday and Thursday were unsuccessful. Thursday afternoon, a statement attributed to Paris was posted to the school’s Facebook page. It said in part:

“As a result of what was widely reported yesterday, I am aware of statements made in a plea agreement entered into by Representative Micah Neal. Suggested by those news reports was that Ecclesia College was somehow involved in criminal activity with Mr. Neal. While it is certainly true that Ecclesia College, like NWACC and the University of Arkansas, has received General Improvement Funds as reported, I can assure you that neither I nor anyone associated with Ecclesia College has ever participated or engaged in any activity to provide money to Mr. Neal or any other legislator in exchange for the receipt of those funds.”

The grants involved in the kickbacks were awarded in 2013 and 2014, according to court records.

They flowed through the Northwest Arkansas Economic Development District, a nonprofit group authorized by the state to promote regional cooperation. The organization is based in Harrison. The district is in the process of preparing a statement on Neal’s plea, Executive Director Joe Willis said Thursday.

An August 2015 Arkansas Legislative Audit of the Development District concluded the district misused both taxpayer and private money. The report included a list of all entities receiving grants from improvement money distributed by the district from 2013 through 2014 and how much each entity received.

Eleven entities received at

least $200,000 in improvement money distributed by the district, the investigative report shows. Only one of those 11 entities, Ecclesia, is a private college based in Springdale. “Entity B,” one of the two organizations named in court documents associated with Neal’s plea, is described as “a nonprofit corporation operating a college located in Springdale, Arkansas.”

Ecclesia received a total of $592,500. The school enrolled about 200 students last year and offers online and traditional degree programs in religious studies, business administration and other subjects.

The identity of “Entity B” is not the only question raised by the plea agreement. Neal’s plea implicates an as-yet unnamed state senator as someone who facilitated the kickbacks, court documents show. The senator is described in court documents as serving “in the Arkansas Senate from 2013 to the present. Prior to his service in the Arkansas Senate, Senator ‘A’ serves as a representative in the Arkansas House of Representative from 2007 to 2012.”

Four members of the state Senate have political careers fitting that description. Two of those reside at least 200 miles from the entities that paid the kickbacks.

Of the two from the Northwest Arkansas region, Sen. Jon Woods, R-Springdale, dropped out of his re-election bid last year. He said Wednesday afternoon he had no comment.

Sen. Bryan King, R-Green Forest, also fits the description and lives in Carroll County, which borders Washington County. King denied any involvement Wednesday.

“No, it’s not me,” King said in Wednesday’s telephone interview. “I’ve had no contact with Micah Neal other than conversations, and very few of those, about legislative matters.”

The Justice Department didn’t comment Wednesday or Thursday about when or if charges are expected against others. Neal’s case is complete, according to defense attorney Shane Wilkinson of Bentonville. He faces a prison sentence of up to 20 years, fines of $250,000 and a requirement to pay restitution. The plea agreement didn’t include any specifics on sentencing. A sentencing hearing has yet to be scheduled, Wilkinson said.

The second kickback was paid by “Entity A,” court documents say. Entity A is identified as “a nonprofit corporation” in Northwest Arkansas that “purportedly sought to create manufacturing jobs in northwest Arkansas, specifically for a specialized workforce including disabled veterans, disadvantaged youth and individuals recovering from substance abuse.”

It didn’t receive the general improvement money directly, but an associated health care provider identified only as “Entity A-1” received the $400,000 on “Entity A’s” behalf, records say.

Entity A-1 is described in the court documents as “a health care provider with facilities in the Western District of Arkansas and elsewhere.” The western district refers to federal court jurisdiction.

State General Improvement Fund money has been a subject of controversy and lawsuits since the Legislature took over its distribution in 1997. The fund consists of unspent money from the previous fiscal year and interest earned on state deposits.

The Legislature’s share of the General Improvement Fund amounted to $70 million in 2013. The nonprofit workforce training group deposited its state checks Sept. 30, 2013, according to court records. Neal received $20,000 for his part in that transaction, paid through the unnamed senator on behalf of the nonprofit group’s director.

The college deposited a check for $200,000 from the development district on Dec. 19, 2014, according to court documents. Neal was paid $18,000 the following Jan. 30, according to court documents.

Neal