NORTHWEST ARKANSAS (KFSM) -- Former Arkansas Rep. Micah Neal, R-Springdale, admitted to federal investigators that he and another legislator each got thousands of dollars in kickbacks in exchange for funneling $600,000 into two nonprofits in Springdale and Fayetteville.
The money came from the state's General Improvement Fund (GIF) and then went through the Northwest Arkansas Economic Development District. Mayor Doug Sprouse is on the district board.
“The GIF money that comes from the state, we are sort of the pass through, the economic development district has been established as sort of the conduit,” Sprouse explained Thursday (Jan. 5).
Court documents show Neal and "Senator A," which sources have identified as Jon Woods played a major role in that conduit.
Sprouse said a lot of the grants the board approves are sponsored by a legislator, which is what Neal and the senator did for the two nonprofits listed in the court documents. Sources tell 5NEWS one of the nonprofits is a Ecclesia College, a small bible school in Springdale.
‘'The problem that has come to light, that we have seen recently, has been what`s happened between legislators and some nonprofits after that grant money has been received,” Sprouse said.
After the bribes came to light, Sprouse said there should be another way to distribute the GIF money.
Arkansas Rep. Greg Leding, D-Fayetteville, said if the legislature gets rid of the GIF entirely rural areas will see the biggest impact.
“There are organizations that actively seek out the legislators for these funds. We are a little bit more fortunate here in Northwest Arkansas in that we have a much stronger economy than most of the state,” Leding said.
Two local Republican legislators told 5NEWS they would like the state's surplus money go back to Arkansans in the form of tax cuts.
Leding said Neal’s actions are disappointing.
“Every time something like this happens it makes it that much more difficult on the rest of us to gain and keep the public's trust," he said. "So it`s on each of us to do anything we can to be transparent and to be accountable to the people we serve."
Gov. Asa Hutchinson released a statement in response to the revelations and in it he said his budget does not contain funding for the GIF.
Court documents show three other people were involved in the bribery case besides Neal and the senator. Their names have not yet been released. Neal will be sentenced at a later date and could face a maximum of 20 years in federal prison.