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story.lead_photo.caption Tiny Ecclesia College in Springdale has been the recipient of $717,500 in state grant money, through 11 different state legislators. The Bible-based school has about 150 students. - Photo by David Gottschalk

FAYETTEVILLE -- Ecclesia College, a private Christian school, stood to gain money from taxes on legalized medical marijuana in an early draft of a proposed constitutional amendment by then-Sen. Jon Woods of Springdale, according to legislative working papers made public in federal court late Thursday.

Barring such a windfall, the college's operations were on shaky financial ground, according to earlier testimony.

Naccaman Williams, director of special projects for the Walton Family Foundation, doubted the financial viability of Ecclesia after a campus tour in October 2013, he testified Thursday. Williams finished his testimony more than four hours before evidence of the marijuana plan was detailed.

Williams' tour came after the college had received the first of more than $700,000 in state grants in 2013 through 2014 to help buy land for expansion and other purposes. Of those, $550,000 in grants are now alleged to be part of a kickback scheme with Woods and another lawmaker.

Woods was indicted in March 2017, accused of a kickback scheme involving grants issued in 2013 and 2014 from the state General Improvement Fund. Two alleged co-conspirators -- Randell Shelton, formerly of Alma, and Oren Paris III, former president of Ecclesia -- were indicted with Woods. Former state Rep. Micah Neal pleaded guilty for his part in the scheme on Jan. 4, 2017. Neal was the government's first witness in the trial, which began April 9. The trial is expected to last at least through the rest of next week.

Paris pleaded guilty April 4 to one count of conspiracy and will testify for the government. He resigned as Ecclesia's president and from the college's board the previous day. His sentence and Neal's are pending. Paris disguised the kickbacks as consulting fees paid to Shelton's company, Paradigm Strategic Consulting, according to the indictment. Shelton then passed the money back to Woods and Neal, the government contends.

In a related development, Shelton's attorneys requested in a motion Thursday that the court find FBI Special Agent Robert Cessario in contempt for failing to answer a defense subpoena to testify at the trial. Cessario was lead FBI investigator in the case who was barred from testifying for the prosecution after investigators discovered he had improperly wiped the hard drive of a computer used to gather evidence in the case.

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Ecclesia sought grants from the Walton Family Foundation and other private sources, according to the testimony of Williams and earlier witnesses. Williams toured the college at the request of former state Rep. Tim Summers of Bentonville. Williams agreed to the tour primarily as a courtesy to Summers, he testified.

Williams said upon arrival at the school he found Ecclesia's enrollment "was even smaller than I thought" at about 100 students.

"It needed a lot of work," Williams testified about the campus. "I wondered if it was economically viable." Nothing on the tour changed his impression, he testified. Williams holds a doctorate degree in education finance from the University of Arkansas, he testified.

Bringing the college up to the level where donors like the Walton Family Foundation would reconsider was part of its rationale for hiring Shelton, according to the defense attorneys.

Woods worked on several bills that would have improved the college's finances, legislative staff testified throughout the afternoon Thursday. Legislative working papers are exempt from the state Freedom of Information Act, but the U.S. Justice Department subpoenaed records of Woods for this trial and also brought four current and former members of the Legislature's staff at the Bureau of Legislative Research to testify.

Staff members testified Woods directed them to work with Paris on higher education bills and with Shelton on bills on recycling roofing shingles. Shelton, Paris and Woods held a financial interest in a shingle recycling business, court records show.

Woods was sole sponsor of Senate Bill 638 of 2015, which became Act 603 of that year, public records show. The act created an account at the state Department of Higher Education for grants to "work study colleges." Such institutions are defined in the act as members of the national "Work Colleges Consortium." The only college in the state belonging to that consortium is Ecclesia, according to court testimony. There are seven such colleges in the United States, according to court testimony. No state money was budgeted to the account, state records show.

The government's last witness Thursday was Matthew Miller, assistant director of the Bureau of Legislative Research and head of its legal services division. Miller drafts all proposed state constitutional amendments, known in their legislative form as concurrent joint resolutions. If both chambers of the Legislature approve such a resolution, it is referred to the next general election ballot. Only general election voters can approve an amendment to the Arkansas Constitution.

Miller testified Thursday that he prepared, at Woods' request, a draft resolution to legalize medical marijuana. The first draft was ready on July 1, 2015. This was not the version of the legalization that voters approved in the 2016 general election. That amendment was placed on the ballot by popular petition, without the Legislature.

The draft amendment limited where tax money gathered from legalized marijuana could be spent. One of those purposes was to give money to the "work college fund" already created by Woods in his earlier legislation.

Woods directed the most grant money Ecclesia received from the General Improvement Fund at more than $350,000, court records show.

Woods directed a $200,000 grant to Ecclesia in September 2013, grant records show. Neal, of Springdale, supported a $50,000 grant to the college and Woods another $150,000 in December 2014, also according to grant records. The amount of money Woods is accused of receiving as a kickback isn't specified in the indictment. It claims much of that money was paid in cash, except for one transaction made to Woods by wire transfer for $40,000.

In one transaction, Paris authorized $50,000 to Shelton's firm Sept. 27, 2013 -- the same day Paris signed an agreement for the college to accept a $200,000 state General Improvement Fund grant, the indictment says. Shelton used the $50,000 that day to open an account for his business, which had been incorporated the day before, the document reads.

Less than a week later, on or about Oct. 1, 2013, Shelton transferred $40,000 by wire from that business account into the personal bank account of Woods, according to prosecutors. Defense attorneys have said the money transfers to and from Woods were loans and money to pay back loans.

Woods faces 15 counts of fraud, all relating to either wire or mail transfers of money. Paris and Shelton were named in 14 of the fraud charges. All three were charged with one count of conspiracy to commit fraud. Woods is also charged with one count of money laundering in connection with the purchase of a cashier's check.

Woods and Neal also directed $400,000 in grant money to AmeriWorks, court and state records show. Neal said he received $20,000 delivered by Woods for steering $125,000 to AmeriWorks. Grant records show Woods directed $275,000 to the company.

AmeriWorks was incorporated by lobbyist Russell "Rusty" Cranford and described in a grant application as a work-training program. Cranford, 56, is set for trial June 11 in federal court in Springfield, Mo., on one count of conspiracy and eight counts of accepting bribes in an unrelated indictment.

Metro on 04/20/2018

Print Headline: College stood to gain from taxes on pot Rx; Kickbacks trial focuses on Ecclesia financial woes, ex-senator’s proposal

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  • RBear
    April 20, 2018 at 6:35 a.m.

    Reading through this article, I'm appalled at the behavior of Woods and others in this sham of a deal. Ecclessia needs to be shut down. It is not financially viable and the efforts of Woods and others to prop it up at taxpayer expense is disgusting. As the details are coming out in the trial, it makes me and probably others wonder what other shady deals are being concocted over in the Gray Dome.

  • shortfinger1001
    April 20, 2018 at 7 a.m.

    Beware of anyone wearing his religion on his sleeve.

  • RobertBolt
    April 20, 2018 at 7:13 a.m.

    If I wanted to become the world's biggest hypocrite, I would first have to become exceedingly religious.

  • TimberTopper
    April 20, 2018 at 9:15 a.m.

    And to think there are those that don't understand the reasons behind the separation of church and state. No church or church entity should receive any type of funding from any government, be it cash or a plot of government owned ground, to place a religious marker on.

  • JMort69
    April 20, 2018 at 9:16 a.m.

    UNBELIEVABLE!! Every current legislator, including Bob Ballinger, Bart Hester and Cecile Bledsoe among others, who sponsored grants to this ridiculous place was vehemently opposed to medical marijuana legalization. And, now, we find that Woods wanted part of the money to go to Ecclesia and into his pocket. Is there no level of hypocrisy to which these so-called "Christians" will not sink? And to think they thought the Walton Foundation would work with this podunk junction place is laughable. That meeting was also arranged by a legislator. And, don't worry RBear, from what I hear from good sources, all of the various schemes under investigation by the feds will show up publicly soon. Including one involving Medicaid in Arkansas, which is far greater monetarily than this one. I hear up to 1/3rd of the entire legislature could be involved. The fact is, our legislature is a den of thieves, none of whom have the decency to step aside before they are booted out. Of course, we can't expect decency from people like these now can we?

  • Whippersnapper
    April 20, 2018 at 9:48 a.m.

    Folks can be exceedingly hypocritical without being religious at all. Anybody who espouses honesty and integrity and supports Trump is a good example (this includes many religious folks, but is not exclusively limited to religious folks). Anybody who believes that guns are inherently bad and people shouldn't have them but trusts the government (of the people, by the people, and for the people) to have them is a hypocrite.

  • RBear
    April 20, 2018 at 11:20 a.m.

    What floors me is the lack of comment from those in here on the right about this case. They'll rant all day and night about innocuous issues in DC, most of the time with little fact or context. But when something involves a) legislators from the Republican Party and b) a religious institution that is is clearly about as shady as they come, crickets.
    ...
    Just shows how hypocritical they are on their stances. What's funny is it's right in the backyard of some of the most hypocritical. I'm guessing a few of them will vote FOR Ballinger for state senate even though he's wrapped up in these dealings. "I know he's a crook, but at least he's against the gays."

  • JMort69
    April 20, 2018 at 1:39 p.m.

    Ballinger is counting on these willfully blind, one issue voters. I heard that, in the Washington Co. debate with incumbent Bryan King, all Ballinger did was attack. His history is using social issues to divide and conquer. He flaps his phony religious robes and incites fear in the most gullible among us. His supporters are panicked as well. Desperation makes you defensive, and they certainly are. I hear that some of his most ardent supporters, when confronted in person, say they "can't make a comment" on his potentially illegal involvement in this mess. Apparently, none of his supporters can. I am an Independent, but I'm voting in the Repub. primary in order to ensure that Ballinger doesn't make it to the general election. I urge other voters in the 5th Senate District to vote in the Republican Primary too, whether that is your party or not. You can vote in the general election for whomever you choose. But, we need to unite to see to it that Ballinger does not make it that far. Time to put country, state and ethics above parties.

  • Whippersnapper
    April 20, 2018 at 2:41 p.m.

    Hey RBear,
    I for one have made numerous comments about the despicable nature of these individuals and the GIF program as a whole. The pork slush was a major problem when it was Nick Wilson and his cronies running it in the 90s, and it is a major problem today. Any spending programs that are not overseen by elected officials having to go on the record via legislation are problematic. This is why the A&P commissions all over the state have become corrupt sources of self-dealing and nepotism - they are the only funds in state law whose expenditure has virtually no oversight and no ethics rules.

  • JMort69
    April 20, 2018 at 3:52 p.m.

    This is not a "right" or "left" issue, this is a right or wrong issue.

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