Follow the money: More to come in kickback probe | Arkansas Blog

Thursday, January 5, 2017

Follow the money: More to come in kickback probe

Posted By on Thu, Jan 5, 2017 at 8:33 AM

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To look for today and in the days ahead: spreading tentacles from Springdale Republican state Rep. Micah Neal's guilty plea to taking kickbacks from state money he helped guide into a couple of non-profit agencies in his district.

His plea agreement indicates he will cooperate with federal investigators. He's given information about an unidentified state senator who apparently structured the kickback scheme and also allegedly gave Neal cash — about an 11 percent commission on money Neal delivered; on a lobbyist involved with a human services agency that got state money; about a college president whose institution received state money; about a friend of the senator with a consulting business. Presumably they've had — or will have — a knock on the door from FBI or other federal agents. It might be in their interest to cooperate, too.

I believe that the probe extends beyond the regional confines of Northwest Arkansas, where the planning agency is based that funneled General Improvement Fund money (surplus revenue divided up lawmakers for local spending at their direction) into agencies from which Neal  seems to have received kickbacks. There's long been curiosity, for example, about legislators who've set up consulting companies when they've had little experience in their working lives that would suggest they had much to consult about. One senator with a "consulting" firm has, for example, never had real employment other than being a legislator, apart from some occasional musical gigs.

Back when the Mike Maggio bribery investigation unfolded, a shiver ran through the legislature at the notion that campaign contributions rounded up from special interests by a former Republican senator might be viewed as illicit purchases of influence. That was the basis of the charge on which former judge Maggio was convicted. The Maggio story led to discovery of other legislators drawing consulting money from outside interests  with legislative agendas while sitting as legislators (but no criminal charges to date) and also speculation that people involved in the Maggio episode might be cooperating with feds, perhaps even by wearing wires, on broader legislative investigations. Did that perhaps help spur the Neal investigation?

I'd guess Neal's guilty plea yesterday has again stirred a sense of anxiety among any in the legislature with unethical or larcenous proclivities. If there are such people in the legislature, apart from Neal and seemingly one unnamed senator.

A former legislator-turned-lobbyist, John Burris, cautioned on Twitter yesterday not to focus on the abusive GIF process, which Mike Wilson valiantly tried to stop with a lawsuit. Gov. Asa Hutchinson says he doesn't intend to continue the pork barreling and the legislative leaders who long insisted on it may be shamed out of continuing the reserve of local-interest money in the 2017 session.

He's right, of course. There are many other ways to corrupt legislators. Vast fraud has been discovered of late in Medicaid and USDA-financed programs run by the state. The bureaucratic labyrinth,  special interest pleaders, big money and greed are powerful incentives to corruption. Ending GIF won't end that. But the GIF scam certainly should end.

Noted: State Sen. Jon Woods of Springdale, working for local chamber of commerce interests, crafted the recently approved constitutional amendment that increased the ability of the state to give corporate welfare handouts to private business and also aimed to legalize handouts of tax money to private entities in the name of economic development. Woods, as it happened, provided the motive force, with key amendments, for Rep. Warwick Sabin's "ethics" amendment, approved by voters four years ago. It opened the door to increased legislative pay, lengthened legislative term limits and was "improved" under Woods' leadership to give legislators a get-out-of-jail free card on ethical reporting violations and also to provide a means for them to continue to get free wining and dining from lobbyists despite the amendment's seeming prohibition on same. Woods announced last year that he wouldn't seek re-election, preferring to start a new chapter in his life.

PS: I'm reminded by someone in the business of why some legislators have jumped into the "consulting" business. They were jealous of lawyers who had a means to do business with people with legislative interests and not to have to disclose that business if they were legal clients. The suspicion was that the legal business was but a sham to cover payments to lawyer-legislators, though I'm not aware such a case has ever been proven. Some lawyer-legislators openly represent clients in the legislature and insist that the public disclosure is sufficient disinfectant.

UPDATE: No one among those rumored to be associated with the Neal plea were returning phone calls Thursday. But there was a report on Patheos, quoting sources, that said a Board meeting was being held today at Ecclesia College, a private church school in Springdale that has been a recipient of state GIF funding passed through the local economic development district used for grants from which Neal got kickbacks. It fits the profile of an unnamed college that sent money  back to Micah Neal but it has not been specifically identified as such. The college president also has ties to another legislator believed to be under review.

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