Ecclesia took out $1 million loan in February 2017, backed by properties bought with GIF help | Arkansas Blog

Wednesday, May 16, 2018

Ecclesia took out $1 million loan in February 2017, backed by properties bought with GIF help

Posted By on Wed, May 16, 2018 at 1:49 PM

ECCLESIA COLLEGE: Financially troubled school took out $1 million loan in midst of scandal, secured by properties taxpayers had helped pay for.
  • ECCLESIA COLLEGE: Financially troubled school took out $1 million loan in midst of scandal, secured by properties taxpayers had helped pay for.

According to county property records, Ecclesia College took out a $1 million loan from Centennial Bank on February 28, 2017. The loan was backed by two properties that Ecclesia had purchased in 2013. Those properties were aided by nearly $700,000 in public General Improvement Fund (GIF) money, directed by ten legislators in 2013 and 2014.

Two days after Ecclesia took out the loan, on March 2, Oren Paris III, then the president of the college, was indicted, along with former state Rep. Micah Neal and former state Sen. Jon Woods, accused of participating in a kickback scheme to funnel GIF money to the college. Paris and Neal eventually pleaded guilty; Woods was found guilty on 15 of 17 counts earlier this month.

I asked Ecclesia College spokesperson Angie Snyder about this loan: What was the money spent on? Was it used to reduce other mortgages? Was any of it used in the criminal defense of Paris or in the civil litigation against the college stemming from an FOIA request related to the GIF documents? She has not replied.

I also contacted Travis Story at the Story Law Firm, which represented Paris after his criminal indictment and Ecclesia in the FOIA case. He has not responded.

The two properties that secured the loan are 4095 Highway 112 and 3870 Als Drive. Those are the two tracts, totaling nearly 50 acres, that the GIF money at the center of the scandal was allotted for.

The school purchased the 25.5 -acre property listed as 4095 Highway 112 in November of 2013 for $500,000. The school later received $200,000 in public money in 2014 to help pay for that property, all of it directed by Woods and Neal.

Ecclesia purchased the 23-acre property listed as 3870 Als Drive in December of 2013 for $675,000. The school received $492,500 in public money in 2013 and 2014 to help pay for it. Woods directed $200,000 of that. Other lawmakers who directed the money: Sen. Bart Hester (R-Cave Springs), Sen. Cecile Bledsoe (R-Rogers), former state Rep. Randy Alexander (R-Rogers), Rep. Charlie Collins (R-Fayetteville), Rep. Jim Dotson (R-Bentonville), Rep. Debra Hobbs (R-Rogers), and Rep. Bob Ballinger (R-Hindsville), who did the legal work to close on that land deal. Former Senate President Pro Tem Michael Lamoureux (R-Russellville), according to testimony heard by jurors in the Woods trial, also helped push through some of the money despite the fact that the grant applications were faulty. Also around this time, the college paid Paradigm Strategic Consultants — the convicted co-conspirator of Woods, Paris, and Neal, $267,000 — which the indictment states was used to funnel the kickback money.

By January of 2015, according to testimony at the Woods trial, the college was in financial distress and had difficulties covering its expenses; it was tapping a line of credit to pay its bills by the beginning of the year. From Doug Thompson's report from the courtroom in the Northwest Arkansas Democrat-Gazette:

Former Ecclesia business office manager Shannon Newman had to use the college's line of credit to pay bills, sometimes several times in a single week, she testified Friday. The line of credit was used to pay Paradigm at least once she was sure of, Newman testified. Newman went to work for Ecclesia in February 2015 as its business office manager and stayed until May 2016, she testified.
Did the college, in dire financial straits and with the storm of the GIF scandal hanging over it, need a major influx of cash to stay afloat in February of 2017?  I will update if I get a response from either Snyder or Story.

But no matter what the loan was used for, the picture here turned out to be an ugly one for the lawmakers who gave nearly $700,000 to Ecclesia back in 2013 and 2014. In practice, that public money went toward purchasing two properties that the financially struggling school then used to secure a $1 million loan three years later. Taxpayers ended up helping to back this loan for the private Bible college in Springdale. 

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