More on ALEC's activities (Center for Media and Democracy). And I'd like to know if any worthy Arkansas legislators were in on this winter getaway to sunny Florida.

It's about a privacy-shrouded retreat for state legislators that began Feb. 2.

Today, hundreds of state legislators from across the nation will head out to an "island" resort on the coast of Florida to a unique "education academy" sponsored by the American Legislative Exchange Council (ALEC). There will be no students or teachers. Instead, legislators, representatives from right-wing think tanks and for-profit education corporations will meet behind closed doors to channel their inner Milton Friedman and promote the radical transformation of the American education system into a private, for-profit enterprise. (ALEC has claimed no corporate reps will be there but it has refused to let the press attend to see this claim for itself.)

The Koch-financed school "choice" movement — the choice eventually to be at institutions the billionaires either own or their management corporations are paid to run — is already on the ground in Arkansas with paid operatives and busy social media outlets. Surely an Arkansas legislator or three got a ticket to Florida for this confab.

The Goldwater Institute, a promoter of Rapert's wacky notion to put him in charge of the federal budget, also promoted this closed-door education meet. You've seen some of the results already.

ALEC's education bills encompass more than 20 years of effort to privatize public education through an ever-expanding network of school voucher systems, which divert taxpayer dollars away from public schools to private schools, or the creation of new private charter schools with public funds, and even with private online schools (who needs actual teachers when you can have a virtual one?). The bills also allow schools to loosen standards for teachers and administrators, exclude students with physical disabilities and special educational needs, escape the requirements of collective bargaining agreements and experiment with other pet causes like merit pay, single-sex education, school uniforms, and political and religious indoctrination of students.

States where students score well on tests but where ALEC's legislative agenda around school choice, charters, merit pay, de-unionization and alternative certification have not yet taken hold get low grades. States where elected officials are gung-ho for ALEC's agenda but the students are not faring so well are still graded generously.

• YOUR MONEY: Questions on how Attorney General Dustin McDaniel chose to spend it.

Much attention has been focused in the past on McDaniel's unilateral control of money won in lawsuits brought on behalf of the state. Since he writes the terms of the distribution for the court orders, he effectively acts as legislature and governor for expenditure of money awarded to the state. His famous direction of a drug lawsuit settlement to build a classroom for the State Police (a use not related to the lawsuit nor even mentioned in the terms of the lawsuit settlement) caused controversy. This prompted him to establish a procedure for using lawsuit money, but it was mostly window dressing to put a gloss on continuation of existing practice.

McDaniel thinks he's clearly allowed to spend this money as he chooses by a 63-year-old court case pertaining to so-called cash funds. The Constitution seems to others to more clearly that money can't be spent in Arkansas without a legislative appropriation. Some Republicans, including Lt. Gov. Mark Darr, have called for McDaniel to show more deference to the Constitution.

So back to mortgages. Wisconsin Gov. Scott Walker has set off a commotion there by directing Wisconsin settlement money to cover state budget shortfalls. Arkansas has a few of these, too — Forestry Commission repayments; legal assistants; drug courts.

I wondered if the governor or legislative leaders had been consulted on spending this mortgage money. I wondered, first, however, why ALL the $39 million in benefits directed to Arkansas didn't go to victims of the banks' shoddy practices. About two-thirds of the $39 million, $26 million, went that direction, in the form of principal write-downs, mortgage refinance and direct payments to people who've been foreclosed. This will go directly from banks to consumers so there's no appropriation issue with that money. Even the full amount wouldn't begin to make bank victims whole, though they remain empowered to sue individually.

McDaniel personally plans to appropriate $13 million in direct spending for these purposes, subject to court approval:

* $9 million to the Arkansas Development Finance Authority. For what? Housing is mentioned. So is "economic development." Specifics are lacking. Slush fund comes to my mind, though McDaniel PR man Blake Rutherford says I'm all wet. Housing assistance would certainly seem to fit in the broad umbrella of the lawsuit. Some other ADFA "economic development" activities of years past — a dubious politically connected loan to a marginal food safety company or help for an ice cream maker on shaky footing — would not, at least in my opinion.

* $2 million to the Arkansas Access to Justice Commission. It's an organization with virtually no current footprint that, I believe, intends to provide legal help for needy people. More details needed on spending of that money.

* $1 million to the state's two law schools for their legal aid clinics. Is this operating support? Or does it mean expansion of services?

* $1.4 million will go to the state treasury for costs and fees. In which state account it falls for what possible purposes are questions as yet unanswered.

I posed questions on this topic yesterday evening to the governor (was he consulted?) and attorney general. I hope eventually to hear more, first on McDaniel's authority to spend $13 million unilaterally. I also wanted more specifics on how that money is to be spent, beyond feel-good words like generalized promises of housing assistance and the most dangerous, if sacrosanct, of all public spending words — "economic development," aka corporate welfare. I got a partial response on that point from Rutherford later last night:

The Arkansas Human Services Department today formally announced that a new operator was taking over Head Start programs for some 1,700 kids that had been operated by a Russellville organization under two funding sources — state and federal. The operator turns out to have big financial problems. Deficit spending, paycheck withholding not forwarded to proper recipients. That sort of thing.

But I noticed this sentence in the state news release.

Prior to the financial issues that surfaced in January, the program had a history of compliance with state regulations, including licensing and ABC requirements, as well as a high-quality rating for the educational services it provided.

Yeah, and prior to the financial issues that surfaced in the fall, the Forestry Commission had a history of compliance.

And prior to letters written on paper that surfaced in the media few months ago, state Rep. Justin Harris and state Sen. Johnny Key had a record of compliance with state law in operation of their ABC-funded daycare centers. Only thing is, the record was wrong. They were flouting the law that prohibits religious instruction in the taxpayer-funded program. DHS just looked the other way.

Prior to surfacing issues, EVERYONE is in compliance.

• John Lyon/Stephens Media
• JOHN SHANNON: Out as state forester.

The Arkansas Forestry Commission improperly borrowed federal grant money to meet operating costs. About $6.4 million worth. As a result, John Shannon has submitted his resignation as state forester.

Here's the full audit report.

The following was written before his resignation announcement and subsequent update:

Legislative Joint Audit heard the report this morning. Forestry tapped the money 59 times over four years before the practice was discovered and halted. To balance the books in the future, 34 people were laid off and two retired. The coming legislative session will consider supplemental money to cover past expenditures and a fund transfer to rehire 15 firefighters.

The audit places some of the blame on John Shannon, head of the division, for not being fully informed on grant requirements and monitoring the situation. The harshest critics of the agency — Republicans generally — have said they are reluctant to approve fixes for the commission without a change of leadership. I've asked the governor's office if he remains supportive of Shannon, who has put blame on his top accounting officer for the problem. The audit notes that the chief fiscal officer, Robert Araiza filed the inaccurate documents and drew the federal money improperly. He no longer works at Forestry.

The report will be forwarded to prosecutors, as is often done.

Accountability in the Beebe administration? We'll see.

The governor's office says a statement is coming later this morning. That has an ominous ring for someone, I think.

UPDATE: Shannon has resigned. Statement from governor's office:

Effective at the end of business on Friday, John Shannon is resigning as Arkansas State Forester. Shannon's decision came after reviewing the results of the Division of Legislative Audit's investigation into financial problems at the Arkansas Forestry Commission.

"John Shannon has helped develop the Arkansas Forestry Commission into a widely respected agency that Arkansans count on, especially in times of crisis," Beebe said. "However, after Legislative Audit's review of the financial troubles at Forestry, I agree that a change in management is needed. I thank John for his years of dedicated service to Arkansas."

The Arkansas Forestry Commission will make a recommendation to Governor Beebe for an interim agency head. Shannon's resignation does not change Beebe's supplemental request for the rest of the fiscal year and will not alter plans to rehire 15 firefighters with reallocated Agriculture Department funds.

State finance chief Richard Weiss says his agency will begin reviewing every budget line of every state agency, though, in defense, he says one agency has never gone off the reservation so badly before. I think Republican critics raise a fair point. Shannon knew he had money troubles. He wanted to talk about tax increases two years ago, but Gov. Beebe didn't want to have such a discussion in an election year. As a practical political matter, Beebe was correct. It would have been futile. But .... we'll never know if the occasion of the meeting might have brought a deeper examination of the need for more money and uncovered the improper borrowing sooner.

After the fact, apologies for oversights all around and promises of a new day at forestry. Shannon still blaming Araiza, who has previously pointed finger back at Shannon. I think it is fair to say the chief executive of an agency should be well versed in uses of federal money (the feds are famous for being picky about this) before tapping it nearly five dozen times.

UPDATE: Jason Tolbert has more coverage plus video of Shannon and Araiza in their finger-pointing during the two-hour session. As the man at the top for such an extended problem, Shannon was due for this fall almost regardless. But if Araiza knew better and didn't blow the whistle — or if he didn't know better — well, perhaps he should get some close watching at his new state job at Career Education, a department that could stand some watching based on recent events.