Mike Wilson, the former Jacksonville legislator whose lawsuits attacking unlawful spending by his former colleagues have seen him prevail three times at the Arkansas Supreme Court, wants to drop the remainder of his latest lawsuit against the state.
But state lawyers don't like the way he wants to go about it and have asked Circuit Judge Chris Piazza to reject his motion, arguing that what Wilson is doing actually violates the spirit of his most recent high court victory over how lawmakers have been spending General Improvement Fund money.
Wilson has countered that the state has no further say about what happens to the money -- $969,800 -- arguing that the attorney general's office has waived the state's interest in the money during the course of the proceedings. Court rules give him an "absolute right" to dismiss the state at this point in the litigation, before the judge's most recent ruling is formally entered, he states in court filings.
On the improvement fund money issue, the Supreme Court sided with Wilson in October on appeal after Piazza ruled against him.
The justices agreed with the 12-term Democratic representative and attorney that the way lawmakers have been divvying up the fund's money through a statewide grant program violates spending restrictions in the state constitution.
Lawmakers have been allocating the money, which is surplus tax revenue and interest income, to be used for economic development. The Supreme Court ruled that the allocation process was too vague to satisfy constitutional requirements that lawmakers must know what they are getting when they spend tax money.
The high court returned the suit to Piazza for him to determine, based on its ruling, what to do with the unspent $969,800, down from an original allocation of $2.9 million.
The total allocation statewide is about $24 million but the money is dispensed regionally, and Wilson's lawsuit challenged only one of the eight regions -- the Central Arkansas Planning and Development District that encompasses Faulkner, Lonoke, Monroe, Prairie, Pulaski and Saline counties.
Since Wilson sued two years ago, a federal investigation into how money was used by two of the other districts has led to two Republican lawmakers pleading guilty and resigning their positions after investigators found that they had bilked money from the grant program.
Federal authorities say Jake Files collected $26,946 through fraudulent construction billing involving a grant from the Western Arkansas Planning and Development District, while Micah Neal got $38,000 in kickbacks from grants that had been administered by the Northwest Arkansas Economic Development District.
At a February hearing, Piazza said the justices' ruling clearly meant that the money must go back to the state. Piazza denied a request on behalf of the grant recipients who had hoped to persuade him to go ahead and let them have the money that they'd been promised.
But the judge did agree that Wilson was entitled to recoup his legal fees, $323,267, from the leftover money. Wilson has borne all of the costs of his litigation over the past 11 years, but asked for the money to pay his lawyer, John Ogles of Jacksonville. His ruling has yet to be formalized in writing.
They argued that Wilson was entitled to the money in consideration for the public benefit his litigation has had by repeatedly heading off illegal spending of tax dollars.
By dropping the state from the litigation now, Wilson can settle with the improvement district as the only remaining defendant. And the sides have reached an agreement with the private nonprofit that would allow the improvement district to retain $646,128, which will be dispensed to the remaining grant recipients, while the rest would go for Wilson's legal expenses, court filings show.
Wilson and the district's lawyer state in court filings that the settlement is fair because the arrangement recognizes that numerous grant recipients, who had been promised state money, committed resources to their projects, including putting up money, based on that guarantee.
They say it's unfair for the central district grant winners to be punished when the central district is the only one of the eight that actually stopped distributing its share of the statewide allocation out of respect for the court proceedings, court filings show. Grant recipients from each of the other districts got the money they were promised.
And this is where the state lawyers object. Assistant Attorneys General Jennifer Merritt and Monty Vaughn, on behalf of the state defendants, acknowledge that the proposed settlement appears to be fair, and they argued for the grant recipients to get their money at last month's hearing.
But they dispute that Wilson is entitled to any reimbursement of his legal expenses. They contend that the settlement proposal "violates the letter and spirit of both the Supreme Court's decision ... and this court's [February] ruling."
They say the Supreme Court's "clear" rulings show that those funds "should never have been used" like they had before the decision. The state attorneys say the judge should order all of the money returned to the state, then deal with the fee issue as a separate matter.
Metro on 03/23/2018