Arkansas gets D- grade in 2015 State Integrity Investigation

Introduction

Arkansans have had good reason to be weary about the shenanigans of their public officials.

In 2013, they learned that a state senator in Arkansas used campaign funds as a personal bank account, spending $8,000 on a home sound system, and $1,000 in country club expenses. They also learned that the lieutenant governor used both campaign funds and the state credit card to buy gasoline, amusingly listing the tankings on campaign forms as “fundraisers.” That same year, the state treasurer accepted cash bribes stashed in a pie box. And in 2015, a circuit court judge admitted to bribery after issuing a ruling that saved millions of dollars for a major donor to political action committees that gave the judge campaign money.

These cases made for splashy headlines here – violations of the law so flagrant that all of these officeholders eventually resigned or were removed. But more systemic problems simmered, and in November 2014, voters passed a change to the state’s constitution meant to put some new distance between public officials and private interests. Amendment 94 banned corporate contributions to candidates and gifts by lobbyists to lawmakers, while doubling the “cooling off” period before lawmakers can become lobbyists.

“In the last 30 years of Arkansas political history, Amendment 94 is among the most significant steps forward for ethics reform,” said state Rep. Warwick Sabin, co-sponsor of the originating bill.

But loopholes, new issues, and old problems continued, often under the public’s radar. As a result, Arkansas earned a score of 61, or a grade of D-, placing it 32nd in the State Integrity Investigation, a national assessment of state government accountability and transparency by the Center for Public Integrity and Global Integrity. Arkansas scored 68 in 2012, the first time the project was carried out, but the two scores are not directly comparable due to changes made to improve and update the project and its methodology.

A lobbyist by any other name

Former officeholders have been able, for example, to skirt the new “cooling off” rules by working immediately after leaving office as political consultants or in “government relations” positions. The Washington-based Center for Responsive Politics has labeled these “unlobbyists,” and complained that no one directly regulates them or publicly reports their activities. These jobs are not, technically speaking, lobbyist positions, but they involve activity that many would consider lobbying in practice.

Former state representative John Burris, for example, took a job in 2014 as a consultant focused on health care issues at the lobbying firm Capitol Advisors Group, sticking to the issue on which he was highly active as a legislator. Former Sen. Johnny Key, who had chaired legislative committees overseeing higher education, left the legislature in 2014 to become associate vice president for university relations in the University of Arkansas System. In Key’s case, the revolving door just kept revolving: a year later, he became head of the state Department of Education, after his former colleagues in the legislature changed the job criteria to ensure he would qualify.

Wining and dining

Backers of the ethics bill that eventually became Amendment 94 argued that banning gifts from lobbyists would end the practice of lawmakers eating “breakfast, lunch, and dinner” on lobbyists’ tabs. In practice, however, free meals and drinks have persisted because of a legal exemption for planned activities “to which a specific governmental body is invited.” During the 2015 legislative session, lobbyists still paid for buffets and cocktail events open to multiple lawmakers, as well as meals and drinks at restaurants around town.

“It’s official: Amendment 94…is meaningless,” wrote Arkansas Times columnist Max Brantley.

But some lobbyists and legislators argued that Amendment 94 brought a significant shift in the Capitol’s ethics dynamic. “The culture and the practice is 180 degrees different,” said Sabin, the lawmaker who cosponsored the bill. In the past, lobbyists reportedly bought lavish steak dinners for individual lawmakers, kept open drink tabs for them, and loaned out their credit cards during the legislative session. Sabin argued that planned events with an open buffet line do not represent the same level of influence peddling, and said that the fact that they are listed on a public calendar is an improvement over the old system, when freebies were harder to track.

Padding legislative salaries

Legislators, who are considered part-time, were until recently paid salaries of nearly $16,000, but some collected more than $50,000 annually in additional untaxed expense reimbursements from state coffers (one got more than $60,000 in 2014). Their expense claims were often vague or had a questionable connection to their legislative duties. Legislators sought reimbursements for some of the rent they paid, either at home or at their regular workplaces. Others padded their payroll with spouses or other family members who served as clerical assistants or “consultants.”

During legislative sessions, lawmakers sometimes claimed $150 per diems on days when the legislature was not actually in session, and claimed per diems simply for attending meetings during the interim period between sessions, including for meetings of committees of which they were not members.

Amendment 94 created an Independent Citizens Commission that helped reform these practices. The commission, composed of members appointed by the governor, top lawmakers, and the chief justice of the state’s Supreme Court, in March raised lawmakers’ pay to $39,400, and in exchange, the House and Senate agreed to eliminate reimbursements for most office expenses. However, lavish per diem and mileage expenses, as well as reimbursement expenses for out-of-town conferences, remained untouched.

Campaign cash

Amendment 94 also addressed campaign spending. Candidates and donors in Arkansas have long been ingenious at circumventing campaign donation limits. Individual donors created multiple limited liability companies (LLCs), enabling them to funnel money to candidates well past the individual limits.

Amendment 94 banned corporations from donating to campaigns, ending the use of shell LLCs. However, the amendment does nothing to stop donors from creating multiple political action committees to funnel money to targeted recipients, and there are early signs that this will become the new campaign finance game. In the last election cycle, at least 10 political action committees (PACs) and other entities, which were co-founded and funded by a Fayetteville businessman opposed to the state’s Medicaid expansion, spent substantial funds in key elections. More recently, one of the state’s top lobbyists formed seven PACs, each a potential new funding channel for his big corporate clients.

Amendment 94 also did not affect other types of spending that can affect elections. Arkansas, like many states, has been inundated with millions of dollars in political advertising by advocacy groups that artfully avoid using express advocacy “magic words” such as “vote for” or “vote against,” thus technically engaging in issue speech and avoiding any regulation or disclosure.

These outside groups theoretically operate independently of the candidates themselves, but the lines quickly become blurred. For example, a candidate for state senate, Scott Flippo, faxed his campaign finance forms from the law office of the co-founder of Conduit for Action, a group that put tens of thousands of dollars in ostensibly independent spending into his race via its independent expenditure committee. 

A recent Ethics Commission ruling established that even the pretense of independence will no longer be necessary when it comes to “issue speech.” During the 2014 campaign, attorney general candidate Leslie Rutledge appeared in an advertisement from an outside group, reading prepared remarks from her campaign platform into the camera. She admitted that she coordinated with the group on the advertisement — which would not be tolerated in a federal election — but the commission ruled in January that this was perfectly acceptable under state law.