A lawsuit has been filed in circuit court in Benton County seeking to foreclose on property owned by Ecclesia College in Springdale that was pledged as collateral on loans. The land includes some $700,000 worth of acreage for which state money was shipped to the college through the likely unconstitutional and, at times, criminally corrupt General Improvement Fund scheme.
The suit was filed by E.C. Funding LLC, which seeks a judgment of more than $1.8 million for unpaid principal and interest on two loans guaranteed by the college and by Oren and Cari Paris. The college borrowed $1 million and $1.3 million from Centennial Bank in two notes in February 2014 and the deals have been modified several times since, including with pledges of real property as collateral. In March, the bank assigned its loans to E.C. Funding, a Rogers investment group. Ecclesia was supposed to repay the loan by Tuesday, but did not do so, the suit says, and now the lender seeks foreclosure.
The suit says the college owes $1.859 million in principal and interest on the two notes.
The property subject to foreclosure includes acreage the college wanted to buy with $700,000 in state General Improvement Fund money funneled to the college by Northwest Arkansas legislators, including two, Jon Woods and Micah Neal, who face federal jail sentences for taking kickbacks from money they sent to the college. The college president, Oren Paris III and a “consultant” to the college, Randell Shelton, also await federal sentencing for roles in the kickback scheme.
A court has ruled that state spending through the GIF program was unconstitutional in a specific lawsuit over money distributed in Central Arkansas. In spirit, at least, particularly given the proven kickback scheme, the Ecclesia money also was wrongly spent. As yet, no Republican involved nor the governor has sought to get back the money wrongly shipped to Ecclesia. If the land is foreclosed by a lender with a priority claim, it’s even less likely the state could claw the ill-gotten money back. However, Fort Smith lawyer Joey McCutcheon has filed an illegal exaction suit over the money sent to Ecclesia.
David Ramsey wrote about college property purchases in May and questions about how the state money was used by a college already known to be struggling. Another Ecclesia legislative supporter, Rep. Bob Ballinger, has made money (though not been charged with a crime) by doing legal work including real estate closings for the college. The foreclosure covers more property than just the GIF-targeted acreage.
The stench surrounding Ecclesia will not soon go away, though there are reports that an outsider, perhaps one with financial means, may step in and stabilize the college, which is incorporated as a church and thus tax-exempt. Yes, Arkansas legislators — including Woods, Neal, Ballinger, Bart Hester, Cecile Bledsoe, Randy Alexander, Charlie Collins, Jim Dotson, Debra Hobbs and Michael Lamoureux — sent tax money to a church.
J.R. Baxter of Benton, who filed the foreclosure suit, said he’d been approached this week by Today’s Bank asking for payoff amounts on the outstanding loans to step in as a new lender for the college.