Agency's funding unlawful, suit says

Ex-legislator cites 2005 case he won

A former legislator whose 2005 lawsuit resulted in Arkansas Supreme Court-mandated restrictions on how lawmakers can use state funds filed a new case Friday to halt what he calls a legislative "money-laundering machine."

That so-called machine is the Central Arkansas Planning and Development District, and Mike Wilson, a Jacksonville lawyer and former 12-term Democrat in the state House, said the Lonoke-based agency is funded illegally by $15 million from the state General Improvement Fund.

The Legislature appropriated that money through eight laws last year, Acts 514, 551, 612, 619, 626, 654, 786 and 818, according to his four-page lawsuit.

Wilson, represented by Jacksonville attorney John Ogles, is asking Pulaski County Circuit Judge Chris Piazza to void those laws and others like them by declaring them unconstitutional.

Wilson also asks the judge to bar the improvement fund from disbursing any of the money allocated to it through those laws.

And he wants the judge to force the development district to repay the $2,987,500 it has already received from the improvement fund from the three state officials who manage the fund: Arkansas Finance and Administration Director Larry Walther, state Auditor Andrea Lea and state Treasurer Dennis Milligan. The three are defendants in the lawsuit along with the development district.

The improvement fund consists of unspent tax revenue and interest from state funds.

The development district was established in 1968 to benefit six central Arkansas counties: Faulkner, Lonoke, Monroe, Prairie, Pulaski and Saline. Its board of directors includes the county judge and mayor of each county's largest city.

Similar districts exist in other parts of the state and receive grants from the General Improvement Fund in a similar manner.

The eight laws in question establish grant programs that Wilson claims violate Amendment 14 of the Arkansas Constitution, which bans "local or special" appropriations, defined by the courts as legislation that benefits only a particular entity or geographic location to the exclusion of others that could have similar needs as the locale that got state aid.

The grants further violate Article 5 of the constitution because their purpose is illegally vague, according to the lawsuit.

Wilson contends that the General Assembly members last year divvied up control of the the improvement fund among themselves -- $70,000 per representative and $285,000 per senator -- to spend on projects as they saw fit. The lawmakers wrote the laws allocating their individual portions, which were passed without dissent or debate, the lawsuit states, citing the eight laws as examples of the practice.

To get around constitutional prohibitions on asserting individual control over the state funds, lawmakers go through the development district, and its sister districts, by secretly approving grant applications themselves, the lawsuit states. Applicants for the grants can't get one without "express approval" of their local legislator, typically delivered by a secret phone call, according to the suit.

The process has turned the development district into a "money laundering machine ... for the sole purpose of evading the force of the constitutional prohibitions and decisions of the [state] Supreme Court," the suit states.

In December 2006, the Arkansas Supreme Court sided with Wilson's 2005 lawsuit that disputed the legality of legislators using General Improvement Funds to benefit limited-scope projects in their districts. The high court found those narrowly tailored spending laws violated the state constitution.

When Wilson sued, lawmakers were using the money to pay for things like a rodeo in Crossett, a bust of a war hero at a VFW post in Lepanto, and a camp for wayward youths in Pulaski County. In 1995, $20 million from the fund helped pay for what is now Verizon Arena.

In January, Gov. Asa Hutchinson proposed using 25 percent of the General Improvement Fund to add about $48 million a year to the state's highway funds between fiscal 2018 and 2021.

Metro on 02/13/2016

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