The Federal Bureau of Investigation is investigating an Arkansas Legislative Audit report regarding former state Department of Career Education Director Bill Walker, department Director Charisse Childers said Thursday.
During a committee meeting, Deputy Legislative Auditor Jon Moore reported that Legislative Audit sent an email to Prosecuting Attorney Larry Jegley to follow up on the report sent to Jegley, and Jegley responded in an email that "it is my understanding that another agency is looking into the issue."
"That's the status, as far as we know, of this case," Moore said at a meeting of the Legislative Joint Auditing Committee on State Agencies.
After the committee's meeting, Moore said his staff answered some questions from the FBI regarding the audit last year, but that he doesn't know whether the FBI has an open case. Jegley could not be reached for comment by telephone on Thursday. Childers told legislators that a federal agency was involved and, after the meeting, told a reporter that it was the FBI.
Deb Green, a spokesman for the FBI's Little Rock field office, said Thursday in an email to the Arkansas Democrat-Gazette that, in relation to inquiries regarding Walker, "it would be inappropriate for us to make a comment at this time."
Walker said Thursday night that he doesn't know whether the FBI is investigating him.
"I can't imagine that would be the case, and I can't imagine anything in the report would rise to that level," he said.
Walker, of Little Rock, was appointed to head the state Department of Workforce Education in 2007 by then-Gov. Mike Beebe. The agency later became the Department of Career Education. Walker left the state agency at the start of Gov. Asa Hutchinson's administration in January 2015, and Childers replaced him. Walker served as a Democrat in the state Senate from 1995 to early 2001 and before that served four terms in the state House of Representatives.
In March, state auditors released a review into the state's spending of federal dollars. The review indicated Walker helped secure federal aid for clients who planned on investing that money into a multilevel marketing company in which Walker was a senior vice president. State auditors said they forwarded their findings to law enforcement officials.
At that time, Walker denied any wrongdoing or having involved himself in any agency case where a client sought to start working with the same venture in which he was involved.
In May 2015, an initial state audit found that Walker was involved in getting federal grant money to several relatives, including his sister, so they could invest in his multilevel marketing company, 5Linx Enterprises Inc. Walker had been involved with the company since 2013, auditors found.
According to the audit findings released in March, the Department of Career Education spent $13,302 in federal grant money with 5Linx. The funds were intended to help "persons with physical or mental impairments" start their own business ventures.
The agency's chief of field services, Carl Daughtery, told auditors that three "clients" were referred to the agency by Walker, and they were approved by a business consultant for 5Linx startup funds without submitting any required business plans or providing the mandatory down payments equal to 10 percent of the grant.
The items and services provided by 5Linx representatives include health insurance and nutritional supplements.
Walker told state auditors that he did not refer the clients to the program. Auditors said the $13,302 was paid through "falsified invoices" but were unable to determine where the falsified invoices came from.
According to auditors, Career Education administrators did not follow proper procedure in approving the invoices. The state auditors also said Walker was directly involved in making sure that $8,868 was sent overnight via FedEx to a 5Linx member.
Walker denied any direct involvement with the transactions, but officials from 5Linx told auditors that Walker would have financially benefited if the three 5Linx clients had been successful with their startups.
Walker has said that even if he had played a role in recruiting new sales representatives for the venture, at his level, the returns for such a recruitment would have amounted to "about $10."
"I absolutely and totally deny influencing anybody," Walker said in March. "What I'm confused about, frankly, is what is it that I influenced and what was gained? ... [They're saying] I did all this to make $10? I'm not sure that makes any sense to me."
According to auditors, payment for $4,434 of the $13,302 was canceled. All three of the clients in question reported that they have had no further contact with 5Linx.
The auditors noted in their report that the case suggested that the agency's commitment to "integrity and ethical values" was compromised.
Metro on 09/16/2016