State Rep. Bob Ballinger (R-Berryville) is one of 10 current and former legislators who directed public General Improvement Fund money to Ecclesia College, a tiny Bible college in Springdale, during the period that ended up being subject to an FBI probe related to a kickback scheme. Last week, former state Sen. Jon Woods was found guilty on federal corruption charges related to that scheme; former State Rep. Micah Neal and former Ecclesia president Oren Paris III pleaded guilty before the trial.
Ballinger has not been charged with any criminal wrongdoing. But he has significant ties to Ecclesia, including representing the school and Paris as a private attorney for years. He did the legal closing work on a land deal for the school directly connected to the GIF scandal that eventually led to federal charges against Paris and Ballinger’s colleagues. The closing on that deal — part of the land acquisition for campus expansion the GIF money was slated for — happened just after the first time Ballinger directed GIF funds to the school and just before he did so a second time. The law firm Ballinger joined in 2015 also represented Paris in the criminal proceeding against him and represented Ecclesia in an FOIA lawsuit related to documents connected to the GIF scandal. And Ballinger remained loyal to his client even as the scandal broke, firmly telling a local newspaper that Paris was innocent just a week before he pleaded guilty.
The Ecclesia issue has popped up in Ballinger’s primary campaign for state Senate against incumbent state Sen. Bryan King (R-Green Forest), with questions about his connections to the school raised at debates and in the local media in West Arkansas. A recent editorial in the Madison County Record argued that Ballinger “has several questions to answer” on his connections to Ecclesia and that it’s “Ballinger’s duty — as both a state representative and a Senate candidate — to clear those muddied waters.”
To reiterate the point: Ballinger has not been charged with a crime. There’s nothing illegal about a legislator working as a private attorney, or closing real estate deals, for an entity that he also happens to direct public money to. Ballinger, who was happy to speak with me at length about these matters, says he was working at a discount for a school that seemed to share his values. He argues that he is being smeared with guilt-by-association tactics. And he says that his actions should be judged by what he knew at the time, not the revelations that came out later.
Like many Arkansas legislators, he voluntarily spoke with federal investigators, but he was not a target of investigation, he said. There is no evidence of criminal wrongdoing outside of those indicted. Nevertheless, it is only natural that all things Ecclesia are getting a closer look in the wake of the scandal. Here is the story of Bob Ballinger and Ecclesia College.
“They were looking for a conservative Christian attorney. I fit into that.”
Ballinger has been a private attorney for Oren Paris, the Paris family, and Ecclesia College, dating back to around 2012. Ballinger told me that he could not disclose specifically what he had worked on because he did not have a waiver from his client to do so, but said that he worked on a variety of matters for the college and for the Paris family, including routine business and family law.
“Typical lawyer stuff,” he said, “ranging from contracts to business organizations to church law to estate planning.” He said that he was referred to them by a mutual friend. “They were looking for a conservative Christian attorney,” Ballinger explained at a debate with King in April at the American Legion Hall in Huntsville. “I fit into that.”
He has said numerous times that all of his work for Ecclesia — including work on a land deal that the GIF money was slated for (see details below) — was done at a discount because he believed in the school’s mission. “It’s a small ministry and something that I felt good about trying to help them,” he said at the Huntsville debate. Ballinger told me that he could not disclose precisely how much he was paid.
It is not against the law for a legislator to work as a private attorney for a person or company that might be impacted by legislation up for consideration, or even run, by that same lawmaker. (Readers of this blog will be familiar with the issue popping up with attorneys such as Sen. Jeremy Hutchinson (R-Little Rock) and former Sen. Michael Lamoureux (R-Russellville).) However, ethics watchdogs have long warned that lawmakers who also work as private attorneys could be motivated to take actions in the legislature that happen to help their paying clients. That’s not a gift or a bribe under the law, but the incentives could work in the same direction.
The law requires that legislators disclose any potential conflict of interest, filed along with their asset disclosure forms with the Secretary of State’s office. In practice, this rarely happens, and lawmakers are not required under the law to recuse themselves even if a conflict exists. Ballinger did not file any such disclosure related to Ecclesia even though he directed GIF money to the school at least twice while he was working for Ecclesia as an attorney — including on the land deal described by the school in its applications for those GIF grants — totaling $8,500 in 2013 and 2014.
At the Huntsville debate, Ballinger was asked about whether it was a conflict of interest for him to direct funding to the Ecclesia while he was working for the college as an attorney. According to a report from the Madison County Record:
Ballinger never directly answered the question, but said he “didn’t make any money off of the funds that were given” to the college.
I asked Ballinger the same question and he said that he did not believe there was a conflict, and thus saw no need to file a disclosure on it. “I really felt like it was two separate issues,” Ballinger told me. “I have to take off my attorney hat and put on my legislator hat on a regular basis. In my mind, I wasn’t representing clients’ interests when I did it. I was weighing how does that benefit my district. Using the information I had then, it seemed like a reasonable and good choice.”
He added, regarding disclosing the conflict, “in hindsight, you look at it — I wish I would have. But it is what it is. In my mind, it was two separate issues.”
Ballinger stated that, in compliance with the law, all of the money he makes as an attorney is for legitimate legal work, not for his actions in the legislature (he noted that he does not work on retainer, one way in which some attorney-legislators have been accused of operating in a gray area).
Should a legislator direct money to a private entity that pays him as an attorney — money slated for a land deal that the same legislator worked on? Again, that’s not against the law. The truth is, if Ecclesia had not ended up smack dab in the middle of a federal corruption case, there’s a good chance no one would have ever noticed.
The land deal
The applications for the nearly $700,000 in GIF money that poured into Ecclesia in 2013 and 2014 stated that the funds were for the purchases of two tracts of land, almost 50 acres in total, in Springdale, about a mile and a half from campus. The purpose was for campus expansion for new dormitory space, according to the GIF applications. At the time, according to a report by the Northwest Arkansas Democrat-Gazette, the college already owned more than 200 acres; as of March of 2017, the college had 183 students and around half were enrolled through distance learning.
Ballinger directed $5,000 to “fund much needed additional student residence space” in September of 2013. The application for this grant stated that the money would go toward a 23-acre property acquisition for this purpose. Ballinger then directed another $3,500 in October of 2014 (he was joined by five other legislators on the grant, which totaled $91,500) “to help the college [make a] 23-acre property acquisition to provide much needed additional student residence space.” Ballinger’s contributions were part of a total of $492,500, including $200,000 from Woods, that lawmakers directed toward purchasing this land.
The college also received another $200,000 in GIF money — entirely from Woods and Neal — in December of 2014, which was used to help pay for a separate 25.5-acre tract in Springdale, purchased a year earlier for $500,000 in November of 2013.
The property acquisition that Ballinger directed money toward would have been familiar to him. In December of 2013, he did the legal work, through his closing company Integrity Closing, to close the sale on that
When pressed on this land deal during the campaign, Ballinger has tried to disassociate his closing from the GIF money. For example, at the Huntsville debate, Ballinger said, “The real estate transaction we did, there was no GIF money that was used.”
He told me something similar: “The closing that I did was actually a loan closing and there was no GIF money that was used for it.”
Ballinger is making the narrow and lawyerly point that the purchase that he closed was done via the bank mortgage, whereas the GIF money was for the purposes of paying off that mortgage. But Ballinger does not dispute that the GIF money was in fact precisely for the purposes of paying for the land purchased in the deal that he closed. All of Ecclesia’s applications for that initial set of grants, totaling $492,500, explicitly state that the money is for that tract of land. Ballinger’s closing and the GIF money: Same exact land deal.
Ballinger also told me that he may have thought at the time that some of the GIF money might have been for dorm construction, but the applications, including for Ballinger’s grants, clearly state that the funds are for the acquisition of the 23 acres of land. In any case, Ballinger agreed that he must have known that the
Paris did make promises, in seeking the grants, that additional housing and classroom facilities would be built on the land, which he claimed was necessary due to “rapid growth” in the size of the student body. The Northwest Arkansas Democrat-Gazette reported last year, “There’s no indication of residential developments being built on campus or on the two properties named in the grants. … The college hasn’t asked for permits for new construction or structural renovation for either site.”
Ballinger told me that he could not disclose precisely how much he was paid to do the closing on the deal for Ecclesia but described it as a “huge discount. … It’s not like I was gaining anything.” The few other land transactions made around this time by Ecclesia, according to county property records, were closed by local title companies in Springdale or Fayetteville; this land deal, the largest, was the only one for which the college used Ballinger’s closing company, based an hour away in tiny Berryville.
If you want to know just how tangled the small world of Arkansas politics is, here’s an interesting side note. Ecclesia purchased the 23-acre tract from James and Patricia Hollingsworth. They acquired the property three years earlier in what appears to be the division of an inheritance with James Hollingsworth’s siblings, including his brother Albert Hollingsworth. Albert Hollingsworth, it turns out, was a major donor to the Conservative Arkansas PAC. A complaint to the Ethics Commission in 2016, accepted by the commission for investigation, charged that in 2012 the PAC improperly funneled $4,250 of a $5,000 donation, on Hollingsworth’s instructions, into campaign spending that backed Jon Woods, without properly reporting it. The same complaint alleged a similar scheme in 2014 to use $4,941 of a $5,000 donation to back then-Rep. John Burris in a senate race; that donation came from Woods’ now-convicted co-conspirator, Randell Shelton. In a settlement, Conservative Arkansas agreed to pay a small fine, saying it was an honest mistake. I asked Ballinger whether he had any association with Al Hollingsworth or the Hollingsworth family. Not that he’s aware of, Ballinger said, the name didn’t ring a bell.
A report late last year in the Northwest Arkansas Democrat-Gazette on Ecclesia’s purchases noted that the college paid $675,000 for the 23-acre tract even though the county had it appraised at a value of $174,450 in 2013 when it was sold; the county appraised it at $204,600 in 2016. Ballinger said that the reporting on this issue has been misleading, stating that they had an appraisal done at the time, and the purchase price was for the amount that it was appraised for.
“There is a big, big gap between what the county had as the assessed value and what the actual value was,” he said. He suggested that the county had undervalued the property because it wasn’t taking into account the 412 bypass to Highway 49 set to be constructed near the property. “The property was appraised for what it was purchased for,” Ballinger said. He said he did not remember who had done the appraisal.
If Ballinger is correct, taxpayer money was sent to a nonprofit struggling to make ends meet in order to make a large land purchase, on the assumption that the land’s value had tripled because of a coming bypass. That doesn’t sit well with Ecclesia’s critics. “No one pays more than fair market value to cash in when properties go up,” Joey McCutchen, the attorney suing Ecclesia in an FOIA case to get documents related to the GIF funds, told the Southwest Times Record. “They buy at fair market to benefit … Also why, when the college was struggling, invest in a land gamble? I’m told there have been no real estate values shown even close to it.”
The purchase price was also for more than Paris had stated was the total budget for the purchase in his GIF applications, which he listed as $565,000. Ballinger said such a discrepancy was not unusual, as the budget listed in GIF requests is often a ballpark figure. “The amount on the GIF application, I don’t know how relevant that is because it tends to be fluid,” he said. For whatever reason, Paris listed the $565,000 figure as the total cost on GIF applications even after the purchase had been made for $675,000, and in communications to the development districts that technically awarded the grants, stated that the funds had been “applied to a 23-acre property acquisition” and the “total cost of land acquisition is $565,000.”
The mortgage itself did not cover the total cost of the purchase that was made — the mortgage from Centennial Bank was for $480,000. Ballinger said that he did not have a release from Ecclesia to talk about the specifics of the mortgage transaction, but said in general that the mortgage could be something less than the purchase price if there was a separate down payment paid on top of what the bank provides (if you follow real estate transactions, you might hear about an 80-20 loan — in this case, it would be 71-29). That would have put Ecclesia — which according to testimony at the Woods trial was struggling with financial difficulties — on the hook for $195,000, whether as a separate down payment or a second mortgage.
Given everything we know about what was going on at Ecclesia with GIF money, it is natural to wonder about all these numbers, to wonder about just how the transactions went, just where the GIF money flowed, and whether it all adds up. Ballinger says the land deal itself was a humdrum transaction, that the numbers make sense in context, and that despite the kickback scheme that Woods and Neal were operating, the core purpose of the GIF money — to purchase land in order to eventually build dormitory space — was fully on the up and up.
It would be easier to clear up precisely what happened with the GIF money and follow the flow of public money in these transactions if the public had access to Ecclesia’s own documents about how this money was spent. Such documents might confirm, for example, Ballinger’s statements that none of the GIF money wound up coming back to him for his work for Ecclesia. But Ecclesia is fighting to avoid releasing such documents in a Freedom of Information Act lawsuit in Washington County Circuit Court. The school is being represented in that fight by Bob Ballinger’s law firm.
The Story Law firm and Ecclesia
Ballinger continues to serve as an attorney for Ecclesia and Paris, and his new law firm has represented them in two high-profile cases related to the GIF scandal. Ballinger, who had previously had his own law firm and a company specializing in real estate closings, joined the Story Law Firm in 2015. The firm is run by Travis Story, a Fayetteville lawyer who is politically active in the same right-wing social causes that Ballinger champions in the legislature (Story was also tapped by House Speaker Jeremy Gillam (R-Bald Knob) to be a member of state’s Medical Marijuana Commission).
Paris picked the firm to represent him after his criminal indictment. “It wasn’t that I was representing him and he came with me,” Ballinger said. “It’s that I was at that firm, and because of our connections, our relationship, it made it where it was easy for him to come over and for us to represent him.” Ballinger himself might have testified if Paris had gone to trial. The government informed the court in December 2017, before Paris’s plea, that Ballinger would be a witness in that trial. Ballinger was on the witness list for the trial against Woods and his alleged co-conspirator in the Ecclesia scheme, consultant Randell Shelton, but he did not testify.
The Story Law Firm is also representing Ecclesia in a case involving disclosure of the documents relevant to the GIF scandal. Jim Parsons, a former professor and board member at the college, filed a lawsuit in February against the school for its refusal to comply with his Freedom of Information Act requests for documents related to the GIF money received via Woods and Neal. The case boils down to the question of whether those specific documents are public information even though they are held by a private nonprofit. Parsons’ attorney Joey McCutchen points to prior case law suggesting that materials held by a private entity are subject to the FOIA if they involve the receipt of public funds for the purposes of carrying on public business; Story counters that courts have evaluated that question on a case-by-case basis and that such a standard would not apply to Ecclesia. If Ecclesia prevails, it would make it be impossible to trace just how the public money was spent since no public entity would have such records once the checks were sent.
The case has been colorful — after Story’s initial motion to dismiss the lawsuit was denied, he claimed that the materials couldn’t be released because of a separate protective order on discovery materials presented to the defense in the criminal case (although Ecclesia is not a defendant in that case); he also argued that Eccleisa was exempt from the FOIA because it was a church. Story’s motion to dismiss on these grounds was denied. McCutchen amended his complaint to argue that if Ecclesia was a church, the state grant money sent to it violated the Arkansas Constitution, and Ecclesia committed fraud by representing itself as a college rather than a church in its applications. McCutchen has told the court that Ballinger is a likely witness, and tried unsuccessfully to get the Story Law Firm removed from the case for that reason. While continuing to dispute the FOIA claim, the Story Law Firm did produce some materials for McCutchen’s firm late last month, but not those sought by Parsons’ FOIA request, according to McCutchen.
As with many FOIA legal battles, the case represents trench warfare in a deeply gray area of disclosure law. Whoever ends up winning on the merits, it’s clear that Ecclesia is very invested in keeping these documents from ever seeing the light of the day. The school could choose to make documents related to the GIF spending public. Instead, it hired the Story Law Firm.
Ecclesia and the FOIA
While Ballinger has continued to do other legal work for Paris and Ecclesia since joining the law firm, he said he has not been directly working on the criminal indictment or the FOIA case. Critics have argued that his work on an FOIA bill during the session, however, represents another conflict. Sen. Bart Hester (R-Cave Springs) sponsored a bill that would create a new exemption in the FOIA for attorney-client communications. The bill was widely seen as a shield for colleges and universities and received strong backing from the University of Arkansas.
The bill quietly sailed through the Senate but then was met with fierce opposition from the Arkansas Press Association and FOIA advocates; House co-sponsor Rep. Andy Davis (R-Little Rock) dropped out and Ballinger took over, adding language that the exemption would only apply to “pending or threatened litigation.”
FOIA advocates argued that Ballinger’s bill would still “gut the FOIA,” creating a broad shield that could be misused to dodge disclosure.
Ballinger says it was never his bill and he was just trying to improve it by adding an amendment that would clarify its scope. The D-G reported at the time that attorneys and officials for the University of Arkansas and Arkansas State University systems wrote the language for the amendment and provided it to Ballinger (amusingly, the paper acquired these emails by FOIA request). In any case, Ballinger ended up running the amended bill in his committee and on the House floor. It passed the House but ultimately died in the Senate.
Among those who spoke against the bill in committee: Parsons and McCutchen, who had filed the FOIA lawsuit against Ecclesia a month before that Ballinger’s law firm
Ballinger is a member of the Story Law Firm which is representing Ecclesia College in its efforts to avoid disclosure of documents under an FOIA request. … SB373 would exempt the work product of Ballinger and the Story Law Firm concerning the GIF received by the college.
Ballinger argues that there is no
Ballinger also stated, “I didn’t have a clue that the FOIA lawsuit had been filed when that bill came through,” saying that he was immersed in the session and hadn’t been back to the Story Law Firm office for months. The case, involving his longtime client Ecclesia, was covered in the Democrat-Gazette the same week that he ran his bill through committee.
Robert Steinbuch, a UA Little Rock law professor and expert on the FOIA, who was an outspoken opponent of SB379, said that Ballinger is wrong to assert that the bill was wholly irrelevant to Ecclesia. “It is not clear that this bill would not have implicated Ecclesia,” Steinbuch told me. The law, he said, is clear that the FOIA can apply to private entities receiving public money in certain circumstances; whether that was true in the Ecclesia case would depend on the particular facts.
Pointing to a pair of landmark FOIA cases, Steinbuch said, “There’s a three-part test to whether you get documents under the FOIA from a private entity that receives public funding. The first is whether it receives public funding, the second is whether it was for a public purpose, and the third is whether it was a function generally performed by a government entity.” In the case of Ecclesia, the school clearly received public funds, and the GIF money, by law, must be allotted for a public purpose. The third question could be a dicier matter for a court to slice. The GIF grants state that the purpose is “to plan, develop, promote, and/or implement economic and community development projects/activities designed to improve the economic, community and/or social well-being of the citizens of Arkansans.” That at least sounds like it could be construed as public money for the purposes of carrying on public business.
If a court found that some of Ecclesia’s materials were subject to FOIA, then Ballinger’s bill could certainly have become relevant to Ecclesia. “This bill would have absolutely created a zone of exclusion from the FOIA that doesn’t exist under current law,” Steinbuch said.
Ballinger dismissed out of hand the possibility that Ecclesia would be subject to the FOIA for documents related to GIF grants; therefore, he reiterated, his bill simply had nothing to do with Ecclesia at all. “You’d really be following a slippery slope where almost every nonprofit entity could fall under the FOIA and that was never the intent of the FOIA,” he said. “I think any attorney that says otherwise is advocating and not offering an analysis.”
Of course, this is precisely the subject of the ongoing FOIA lawsuit against Ecclesia! “The lawsuit, I think, was an attempt to pile on,” Ballinger said. “I don’t think anybody really believes that a private entity [is subject to the FOIA].” However, Circuit Court Judge John Threet has twice rejected motions to dismiss the case. That doesn’t mean he will ultimately find that Ecclesia is subject to the FOIA in this case, but the case is proceeding because there is a plausible claim under the law. In his ruling on Story’s motion to dismiss, Threet wrote, “the Plaintiff asserts that as to those specific funds, the Defendant has become intertwined in the operation of government…the Plaintiff has stated sufficient facts in its complaint to overcome a Motion to Dismiss.”
One thing is certain: Given the Story Law Firm’s kitchen-sink approach to fighting this lawsuit, it strains credulity to think that, if applicable, they wouldn’t have taken advantage of Ballinger’s bill
This is the tangle, then: Ballinger’s law firm is helping Ecclesia fight to shield documents related to the GIF money from public view. And some of that money, yes, was directed by Ballinger while he himself was working as an attorney for Ecclesia, allotted to a land deal closed by Ballinger. In the legislature, Ballinger pushed a bill that could potentially be a shield in such a lawsuit. No disclosure of conflict was filed on any of this. Given this tangle, we might question whether the matter is as simple as taking off his “attorney hat” and putting on his “legislator hat.”
“They got messed up and mixed up into something.”
Ballinger consistently defended Ecclesia as the scandal unfolded, even as details emerged about the appearance of misuse of taxpayer funds and federal charges of a kickback scheme.
In January of 2017, the Northwest Arkansas Democrat-Gazette reported on the land purchases that Ecclesia made with the help of GIF money, and reported the names of 10 legislators who had directed GIF money to Ecclesia between early 2013 and 2015, Ballinger among them. Asked about the GIF money he steered to Ecclesia, Ballinger told reporter Doug Thompson at the time, “My feeling and sense is the college got wrapped up in something it had nothing to do with.” No mention is made that Ballinger himself worked on the land deal that the GIF money was allotted for and that was the subject of that article (at that time, there had been no public reporting on this fact).
Ballinger continued to defend Ecclesia and Paris, which is perhaps not surprising since his law firm was representing Paris in the criminal case. On March 29, a week before Paris pleaded guilty, Ballinger told the Madison County Record, “Oren has never been declared guilty. There’s a lot going on in this case … someone should step back and say, ‘hold on, maybe in his case, Oren is innocent,’ and in this case he is.”
Even after Paris’s guilty plea, Ballinger defended the college. “They got messed up and mixed up into something,” he said at the Hunstville debate on April 19. “They got used as a pawn in a scheme.” His next sentence struck many as astonishing: “Most of it I had no clue about until just the last few weeks.”
Ballinger said that his position changed after his comments to the local paper that Paris was innocent. “I can’t really go into that much detail, but essentially, new information came in between the time I made the comment that he was innocent and when we made the plea,” he told me. That new information, he said, represented a revelation in terms of how he viewed the case. “There were things that popped up that made it
I asked Ballinger about his statement — “most of it I had no clue about until just the last few weeks” — did he really mean to say that he was unaware of the scope of the Ecclesia scandal? Ballinger said that his comments had been misrepresented, and that what he meant was that he had not become aware until recently of those new details that made him view the case differently (Ballinger would not disclose what those new details were, but presumably this is a reference to information that federal prosecutors showed to Paris’s defense team prior to his plea).
Ballinger told me that Paris “should have been more careful than he was, he should have known better.” But he added, “I still hold to the fact that he was a pawn used in the process.”
Ballinger, of course, wasn’t alone in his GIF largess. In addition to Woods and Neal, seven other legislators directed money to Ecclesia.
According to evidence presented at the Woods
I asked Ballinger whether he was approached by Woods or Neal; he said that in his memory it was Paris who approached him about the grants.
“Now, with everything that we know, then, yeah, it would have been better not to have done it,” Ballinger said. “However, at that time there were so many things that we didn’t know. To me, it was a good nonprofit organization that’s doing good work.
“It was an effort to fund a good institution. … That’s all it was. And that’s what I’d say about every one of the legislators who
Ballinger said that he has heard the rumors that up to 20 legislators have made a “proffer” — or sworn account of what they would be willing to say in court — to federal investigators. He said that he had not done so in his own communications with investigators.
“The truth is, there’s nothing there,” he said at the Huntsville debate. “There is no there, there. And that’s obvious. If there was anything that was there … I’d have been indicted.”
“At the time,” he told me of the money directed to Ecclesia, “I really thought I was doing the right thing.”