LITTLE ROCK -- The Arkansas Supreme Court says a system of grants lawmakers used to pay for local projects around the state violated a constitutional requirement that budget measures have a distinctly stated purpose.

Justices on Thursday reversed a lower court's ruling in favor of $2.9 million that went toward one of eight planning districts in 2015. The case was brought by former state Rep. Mike Wilson, who was also behind a lawsuit that prompted the court in 2006 to bar the Legislature from directly funding local projects around the state with surplus money.

The court did not rule on Wilson's argument that the grants also violated a ban on strictly local legislation.

Wilson argued the legislation allocating the money provides few details about how it will be spent.

The General Improvement Fund grants are at the center of a federal indictment against a former state senator and two others accused in a kickback scheme.

Former state Sen. Jon Woods of Springdale; Oren Paris III, president of Ecclesia College in Springdale; and consultant Randell G. Shelton Jr., formerly of Alma, are accused in the indictment.

Woods faces 15 counts of fraud, all relating to either wire or mail transfers of money. Paris and Shelton are named in 14 of the fraud charges. All three are charged with one count of conspiracy to commit fraud. Woods is also charged with one count of money laundering in connection with the purchase of a cashier's check.

The case involves the grants, which are controlled by legislators. The fund consists of state tax money left unallocated at the end of each fiscal year and interest earned on state deposits. Each legislator is given a share of the fund to be directed to a nonprofit group or government entity.

Former state Rep. Micah Neal pleaded guilty Jan. 4 to one count of conspiracy to commit fraud, admitting that he took two kickbacks totaling $38,000 in exchange for directing improvement fund grants to two nonprofits. He has not been sentenced.

Woods, Paris and Shelton have entered innocent pleas and are set for trial in Fayetteville on Dec. 4.

NW News on 10/06/2017