- Associated Press - Wednesday, January 4, 2017

LITTLE ROCK, Ark. (AP) - An outgoing Arkansas state lawmaker pleaded guilty Wednesday to conspiring with a state senator and others to arrange kickbacks from government funding earmarked for economic development, federal prosecutors said.

Rep. Micah Neal, 42, a Republican from Springdale, said in U.S. District Court in Fayetteville that he received $38,000 from funds awarded to two entities by the Northwest Arkansas Economic Development District. One was a nonprofit corporation set up to arrange manufacturing jobs for disabled veterans, disadvantaged youth and those recovering from substance abuse. The other was a nonprofit college in Springdale.

“He’s acknowledging what he did was wrong,” lawyer Shane Wilkinson of Bentonville said. “I suspect that as these things unfold that Micah will be perceived on the low end of the totem pole of culpability.”

According to prosecutors, Neal conspired with others, including “Senator A” - whom they described as a House member from 2007-2012, a senator since 2013 and the sponsor of a 2013 bill granting eight development districts up to $2 million each in state funds.

Neal last year opted against seeking re-election and his replacement takes office Monday.

The money in question came from the state’s general improvement fund, a pot of money only available during a state surplus. Lawmakers have traditionally tapped the fund for one-time projects or grants, often in their districts.

Gov. Asa Hutchinson, speaking Wednesday at a pre-legislative session sponsored by the Arkansas Associated Press Managing Editors, said the conduct described in the charges was “reprehensible for a legislator.”

The governor says his proposed budget for 2017-18 fiscal year doesn’t anticipate a surplus that could be used by lawmakers after other state obligations are met.

“While it can be used well in circumstances, it can also be abused and it’s a grey area there,” he said.

Americans for Prosperity, a conservative advocacy group, said Arkansas’ use of the fund “breeds a culture of public corruption.”

“The Legislature and the governor should abolish this practice, much like Congress has put an end to earmarks at the federal level,” said David Ray, the Arkansas director of the group.

Neal pleaded guilty to one count of conspiracy to commit honest services fraud. A sentencing date was not announced. Under his plea agreement, he faces up to 20 years in prison, though under sentencing guidelines and with anticipated cooperation with prosecutors he likely will face a lesser term.

Neal, whose family owns a Springdale restaurant, won the Republican Party’s nomination for Washington County judge last year but dropped his bid abruptly four months later. Neal cited business- and family-related reasons for ending his campaign.

According to the government, Neal and the senator directed $400,000 to the jobs program, from which Neal received $20,000. The college received $200,000, with $18,000 kicked back to Neal, the prosecutors said.


Associated Press Writer Andrew DeMillo contributed to this report.

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