To no one’s surprise, Republican state Sen. Jake Files of Fort Smith entered a negotiated guilty plea Monday in federal court to bank and wire fraud and money laundering charges.
Files used his position as legislator to steer $46,000 in pork barrel state surplus money to a Fort Smith sports project that his construction company nominally was supposed to build for the city. Some deal. The city poured $1 million into Files’ company. The project has been scrapped.
That state surplus money went into his pocket and also to employees of his construction company, apparently something of a hammer-and-nails Ponzi scheme. Files undoubtedly hoped it would catch up and become profitable and complete jobs it won, but bank liens, tax liens and foreclosures came instead.
Files also admitted he used a piece of equipment he no longer owned as collateral on a $55,000 bank loan.
Files’ problems were old news and not only as to the specific charges. The Arkansas Times broke the story in 2015 of a tardily reported loan of $30,000 Files got from lobbyist Bruce Hawkins to help him out of a tight spot. Files faced tax liens and was under investigation for hot checks.
Files is the second Republican legislator to admit profiting from the pork barrel known as the General Improvement Fund, recently declared an unconstitutional scheme by the Arkansas Supreme Court. Micah Neal confessed to taking kickbacks from hundreds of thousands of dollars funneled by multiple legislators to the shady Ecclesia College in Springdale, incorporated as a church. It got money that no state school got. Former Sen. Jon Woods (R-Springdale) faces trial as the key man in that kickback scheme, as does a friend who was an alleged intermediary and the college president. Another legislative lobbyist has been named and not charged.
Neal made hours of recordings of colleagues as his guilty plea drew near. Files has agreed to testify, if asked. There have long been rumors of corruption in the GIF spending and legislators in the “consulting business,” as Woods was. But the statute of limitations draws near. That does not mean the end of what we ought to know and what justice demands.
We ought to know the contents of those tapes Neal made. They seem likely to contain elements of comedy and criminal avarice — “Goodfellas” set over slabs of pie at Neal’s family-style restaurant. If Woods doesn’t dodge prosecution thanks to FBI sloppy handling of evidence, we’re likely to hear some of it at his trial.
This scandal was huge. Had Neal not blown the whistle, Woods had really big plans for Ecclesia. He talked of making it a beneficiary of the tax on medical marijuana at one point. At another, he drew up a plan to have it qualify for a special higher education appropriation as a “work-study” institution. He also was the architect of the measure that lengthened term limits, watered down new ethics rules and restored the public treasury as a source of taxpayer subsidies for chambers of commerce. Everybody under the Capitol dome loved him. He was building a Louisiana-sized swamp.
Justice demands prison time for Jake Files. He stole tax money, shook down a lobbyist (for what, you must wonder), and cheated banks and clients. If he doesn’t get hard time, Republican U.S. Sen. Tom Cotton might for once be proved right: We do have an “under-incarceration” problem.
The sentencing guidelines might let Files off with as little as 15 months. The decision is up to federal Judge P.K. Holmes. A useful comparison: Martha Shoffner, the Democratic state treasurer, got a 30-month sentence as a broke 70-year-old for taking cash kickbacks from a bond dealer she’d favored with state business. She was released to live with her family, destitute, at the end of 2017 after serving 26 months. She was not in a league of her own.