Troubles mount for Sen. Jake Files. Maybe others, too | Arkansas Blog

Tuesday, August 22, 2017

Troubles mount for Sen. Jake Files. Maybe others, too

Posted By on Tue, Aug 22, 2017 at 7:18 AM

click to enlarge DUM DA DUM DUM: Search warrant suggests Sen. Jake Files is in a heap of trouble.
  • DUM DA DUM DUM: Search warrant suggests Sen. Jake Files is in a heap of trouble.
Prescient. When I wrote Saturday that a bigger question loomed for Sen. Jake Files than the mounting pile of financial claims against him from his imploded construction business.

That question was about state General Improvement Fund money steered into what became an unfulfilled contract to build a sports facility for the city of Fort Smith. Dave Hughes of the Arkansas Democrat-Gazette reported today on an affidavit for a search warrant returned Monday in federal court that provides still more details about what had already been identified as a suspicious transaction.

According to this account, fake bids were cooked up so Fort Smith could get money from the GIF (state surplus controlled by legislators). An employee of Files won the bid for utility work but didn't do it. The affidavit says she received $26,945.

The affidavit said Gonzalez told the FBI that Files instructed her to get a cashier's check for $11,931.91 and $14,000 cash, for a total of $25,931.91, and deliver both to Files. The cashier's check was made payable to FFH Construction.

Gonzalez "stated she watched as Files counted the cash out for payment to employees, which amounted to approximately $4,805," the affidavit said. "Gonzalez stated Files gave her $1,978.42 'in reimbursement' and a $1,500 'Christmas bonus.' Gonzalez said she saw Files place the remainder of cash and the cashier's check in his pocket."

The affidavit said records from FFH Construction's bank account at First National Bank of Fort Smith showed that the cashier's check for $11,931.91 was deposited into the account on Dec. 30.

[FBI Agent Timmy] Akins said in the affidavit the deposit of the check constituted wire fraud.
No one has been charged. Files said this is, if not fake news, old news, which is true, though the affidavit provides greater detail than available previously.

Files is in deep trouble, of course. But this part of his statement to the D-G might send a shiver through a few other members of the General Assembly. Emphasis supplied:

I was contacted by law enforcement, who are investigating this GIF grant (and from what I understand others across the state that have nothing to do with me).
As yet, one former legislator Micah Neal, has pleaded guilty to fraud in handling of GIF money. Another, Jon Woods, faces federal charges in a kickback scheme using GIF money. A well-connected lobbyist stands implicated but not yet charged. Rumors are rampant about others.

The GIF honeypot, even when used merely to win friends and influence local people for political purposes, was always an ethical scandal in progress., if not always a criminal one. A lawsuit stopped the practice once. A second lawsuit stands trying to put an end to it again. Gov. Asa Hutchinson, to his credit and also for his own purposes in using the surplus more to his purposes, wants the practice to end. For now, it has.  But greed is a powerful lubricator of the legislative machinery, and not only in spending of "surplus" money.

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