It is way past time to revisit the Arkansas General Improvement Fund (aka GIF), the vast political scam run for nearly two decades by the Arkansas legislature at the expense of Arkansas taxpayers. Jacksonville’s venerable dragon slayer, Mike Wilson, has been fighting and suing the racket for a more than a dozen years, with mixed success, but this week there was some reward.
Up at Springdale, the U.S. attorney announced that Micah Neal, a Republican lawmaker, had pleaded guilty to conspiring to send some $600,000 of your tax dollars to a couple of private groups—a tiny Bible college few people even in the area had even heard of and some kind of private health entity—in exchange for kickbacks. Rep. Neal got a cool $38,000 for his effort. He implicated a state senator and another friend in the scheme, although they are not yet named and have not been charged. Neal was doing the senator’s bidding, although in tweets the same day he seemed to say that God had cleared it for him. More charges are coming, and the FBI, following leads in the Neal case, is looking at fraudulent GIF activity in the planning district and elsewhere in the state.
When legislators started carving away tens of millions of dollars from tax receipts each year to spend on private and public projects and entities in their communities to insure their re-election, Wilson, a former legislator himself, sued. It was the kind of spending that lent itself to self-dealing and fraud if a legislator had any proclivities in that direction. Also, it was abraded several constitutional prohibitions, including a ban on local and special legislation. The Arkansas Supreme Court agreed with him, unanimously.
So over a couple of budget cycles, the legislature sought to find a scheme to get the money to friendly groups and pet projects in a way that got around the constitutional prohibitions. They finally decided to appropriate the money—some $70 million in 2013-14—to Arkansas’s eight planning and development districts, which distribute federal and other funds to aging and other nonprofit services, and the districts would develop clever ways to send the money where individual legislators wanted it to go. Each of the 135 legislators had a fixed sum of money allotted to him or her by understanding and told the district by letter, email, word of mouth or other methods where the legislator’s share of taxes was to go.
We should acknowledge that many, probably most, of the expenditures were for good causes such as libraries, fire departments, Scout groups. But it was not for all of such groups but only those specially chosen by a legislator, whom the planning districts always credited with the gifts.
But there also is no accountability for the expenditures, so the system begs for abuse and self-dealing. In 2015, it seemed so rampant in the Northwest Arkansas Planning District that a state audit was ordered. Its report was shocking. The director was fired and federal investigators moved in. More than $500,000 of state tax dollars that are supposed to be spent on state services like education, law enforcement, health care and corrections was spent to pay long-overdue grocery bills to a Missouri wholesaler who had furnished food for aging programs that are not under state control.
Some $590,000 earmarked by 10 or so Republican lawmakers for a Bible school in a pasture west of Springdale to help it buy land and a few old houses seemed especially odd. The school gives degrees in Bible study, sports management and business. Rep. Neal and Sen. Jon Wood of Springdale, one of the legislature’s rising stars, were the biggest funders (with state tax dollars, not their own) of the college. When federal agents got involved late in 2015, both men suddenly decided not to run for re-election and to devote more time to their families, which is usually a giveaway. You may remember that Wood was the legislator who wrote a constitutional amendment giving private businesses and groups virtually free access to local and state taxes. The title of the amendment said it was for jobs and economic development, so voters ratified it in November.
The president of the college, a third-generation preacher of the same name, issued a statement yesterday that he and the school had done nothing wrong. Yes, it had paid consultants to raise money for school but it had not paid any kickbacks, he said. Doing consulting works, see, is not illegal. Lots of legislators get into consulting.
After the Northwest audit came out, Wilson decided to try again to get the practice stopped. He filed a lawsuit in Pulaski County Circuit Court but against the Pulaski-Lonoke district, not the Springdale district, and not on the grounds of fraud but simply on the premise that the whole operation was unconstitutional, the same as it had always been.
But Judge Chris Piazza, surprisingly to us, ruled that Wilson had not made an ironclad case that the legislators were the ones earmarking funds to projects rather than the board of local officials who run the planning district. Wilson is appealing to the Supreme Court. We would be hopeful were it not for the fact that the Supreme Court is no longer the court that it was. It is now a thoroughly Republican court and not an independent one but a political court. Perhaps the court will take judicial notice of the carelessness and fraud the system engendered in one community and hold the system unconstitutional as its predecessor did. A stronger hope rests with Gov. Asa Hutchinson, who wants the GIF racket stopped. He has the veto and considerable leverage with the party that now runs the show.
