CHOCTAW — Arkansas businessman Eldon Blackaby billed the city of Choctaw for everything from mortgage payments on a 2,500-square-foot house for him and his wife to a trip on a chartered jet between Arkansas to Oklahoma under the guise of legitimate business expenses, the city claims in court documents.
On Wednesday, Choctaw said that it had requested a state audit of Choctaw Town Square LLC, led by developers Eldon and Kurt Blackaby. The Bentonville, Ark., company had been entrusted with developing a 39-acre retail development anchored by a Walmart Supercenter with the aid of city incentives.
The Choctaw City Council moved to ask for the state audit after invoices that Choctaw Town Square LLC submitted to the city for business expenses began to spark suspicion, Choctaw Mayor Randy Ross said.
“Some of the stuff didn't pass the smell test,” Ross said. “It's good business for us to ensure that taxpayer money is being spent appropriately — there needs to be some accountability to ensure that there is no self-dealing on some of these transactions.”
Derrick Davidson, an attorney for Choctaw Town Square LLC, said the city's accusations of fraud were unfounded.
“Its something they are fabricating to try to build their image in the eyes of their constituents,” Davidson said.
In February, Choctaw Town Square LLC sued the city of Choctaw in federal court over money it claims the city owes it for construction and legal costs. Choctaw Town Square LLC claims in its lawsuit that city officials have refused to reimburse it for construction costs from a $7.5 million tax increment financing bond the city issued last year to help finance the development.
City officials stopped making payments to the developer after requesting more information on invoices submitted to the city.