State Rep. Micah Neal Pleads Guilty to Taking Kickbacks on GIF Money

by Gwen Moritz  on Wednesday, Jan. 4, 2017 12:39 pm  

Micah Neal

State Rep. Micah Neal, R-Springdale, waived indictment Wednesday and pleaded guilty in federal court in Fayetteville to conspiracy to commit honest services fraud, admitting that he and an unnamed state senator directed money from the General Improvement Fund to two nonprofits in exchange for bribes.

Neal, who will be sentenced at a later date, received approximately $38,000 in kickbacks, according to the news release from the Justice Department.

More: Read the charging information in the case here; read the plea agreement with Neal here

In waiving his right to be indicted by a grand jury, the 42-year-old agreed to plead guilty to a single charge filed directly by federal prosecutors in the Western District of Arkansas. The maximum sentence is 20 years in prison, but prosecutors have agreed not to seek a sentence outside the recommended guideline, which is likely to be in the range of two and a half to four years. 

Neal agreed to cooperate with the government's continuing investigations and to testify before a grand jury or in a trial if asked by prosecutors.

Neal was first elected in 2012 and did not seek re-election in 2016. He announced his candidacy for Washington County judge on May 1 but abandoned that campaign at the end of June, saying he wanted to spend more time with his family.

The announcement from the DOJ said Neal admitted that between January 2013 — his first month in the Legislature — and January 2015 he and the unidentified state senator used their official positions to direct $600,000 in state GIF funds to the Northwest Arkansas Economic Develoment District, which then distributed it to two nonprofit entities. Neal personally directed that $175,000 be given to the nonprofits, according to the announcement — $125,000 to Entity A and $50,000 to Entity B.

The General Improvement Fund is made up of budget surplus money, and each legislator is given a certain amount to spend on local projects. 

The nonprofits are not identified by prosecutors, but the one referred to as Entity A "purportedly sought to create manufacturing jobs in northwest Arkansas, specifically for a specialized workforce including disabled veterans, disadvantaged youth, and individuals recovering from substance abuse."

The other, called Entity B by prosecutors, is a "non-profit corporation operating a college located in Springdale..." That description fits Ecclesia College, but President Oren Paris was not available to take a call on Wednesday.

According to the charge, the state senator with whom Neal admitted conspiring served in the state House of Representatives from 2007 through 2012 and in the state Senate since 2013. One senator who meets that decription is Jon Woods, R-Springdale, who did not immediately return a call seeking comment.

In his plea agreement, Neal acknowledged that it was the senator who told him that the incorporator of Entity A would pay him a portion of the GIF money directed to the nonprofit.



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