FAYETTEVILLE — Text messages among the three people accused in a kickback scheme show they coordinated efforts from February to October of 2014 to solicit more state grants from other lawmakers who were not a part of the plot, according to testimony Monday morning.
IRS Special Agent John Munns presented text messages along with emails and bank records in the trial of former state Sen. Jon Woods and consultant Randell Shelton Jr., formerly of Alma. The records show their text messages and transactions with Oren Paris III, then-president of a private Christian college receiving state grants.
The text messages show successful efforts to solicit state General Improvement Fund grants from lawmakers other than Woods and then-state Rep. Micah Neal, who is also charged in the conspiracy. Neal and Paris have pleaded guilty. Neal was the government’s first witness when the trial began, and Paris is expected to testify later this week.
Munns’ testimony began Friday afternoon and is expected to continue most of Monday.
Monday's evidence was consistent with earlier testimony in the trial by state Sen. Bart Hester of Cave Springs, who is not implicated in the scheme. Hester testified Woods distributed his share of improvement fund money quickly after it became available, then would lobby other lawmakers who still had grant money to contribute to causes Woods supported.
The defense contends lawmakers making deals with each other is neither illegal nor unusual.
The texts presented Monday showed the discussion between Woods, Paris and Neal was as detailed as who would call each legislative prospect and how much each lawmaker would be asked to direct to the college in grants.
In all, 10 current or former legislators directed state grants to Ecclesia College from 2013 through March 2015 totaling $617,500, according to records obtained by the Northwest Arkansas Democrat-Gazette. The records were sought under the state Freedom of Information Act from the economic development districts that distributed the grants for lawmakers. The figure doesn’t include $100,000 the college received where records are unclear who gave the money.
Woods directed $350,000 and Neal $50,000 of the total. None of the other eight current or former legislators are charged with wrongdoing in the Ecclesia grants.
The government contends Paris paid kickbacks disguised as consulting fees to Shelton’s company and Shelton passed money along to Woods and Neal.
In previously disclosed matters, Woods directed a $200,000 general improvement grant to Ecclesia in September 2013, grant records show. Neal supported a $50,000 grant to the college and Woods another $150,000 in December 2014, according to the 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, Paradigm Strategic Consulting 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 states. 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.
Munns’ evidence and testimony also showed Shelton’s company, Paradigm Strategic Consulting, was paid by Ecclesia College half of the amounts paid in grants from the West Central Arkansas Planning and Development District, along with smaller payments after other grants.
Two grants of $50,000 each are involved from the West Central district, based in Hot Springs. The records showed cash deposits of $25,000 by Shelton into the Paradigm accounts and also showed cash withdrawals from Paradigm’s account of $21,000 after the first grant and $13,000 after the second.
After Shelton withdrew cash, he called Woods as quickly as six minutes later, telephone records show. The records also show Woods making cash deposits to some of his four different checking accounts after those withdrawals by Shelton.
The email evidence also showed contract extensions to Paradigm with additional payments after each grant receipt by Ecclesia.
The government’s use of a display software similar to Powerpoint to present these text messages and other records turned into one of the longest-running open disputes yet seen in the trial.
Defense counsel asked for a mistrial first thing Monday, contending the government’s display amounted to a repetitive piling-on of points already made and evidence already presented.
Neal pleaded guilty to one count of conspiracy for his part in the scheme Jan. 4, 2017. Paris pleaded guilty this year, on April 4, also to one count of conspiracy. He resigned at the college the day before pleading guilty. Both are awaiting sentencing.
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.
Read Tuesday's Arkansas Democrat-Gazette for full details.