In September, Conduit For Action reported Governor Asa Hutchinson had accepted prohibited gifts from lobbyists and the clients or employers of lobbyists though his political action committee (PAC), Asa PAC State. The Governor’s latest report for Asa PAC State was filed October 24, 2016. Not only has he not returned any prohibited gifts, he accepted more lobbyist money.
The report includes a $5,000 contribution from Goggans, Inc, which is a registered lobbyist firm headed by Mr. Miles M. Goggans. Gifts are also prohibited from clients or employers of lobbyists. One of Mr. Goggans’ clients is Coastal Phoenix Investments (CPI) and his client also made a $5,000 contribution to Asa PAC State. Four more organizations at the same address as Coastal Phoenix Investments also gave $5,000 each to the Governor’s PAC.
Letting go of prohibited gifts isn’t going to financially hurt ASA Pac. The latest remaining balance reported was $230,959.74. Remember this is not his campaign fund. It is his fund to influence other races by make contributions to other campaigns.
Conduit For Action still hopes the Governor will quickly return the prohibited gifts. The law is clear and it should not take an ethics complaint to resolve the issue. An ethics complaint could put some ethics commissioners on the spotlight if they were appointed by the Governor or another public official who has a PAC with prohibited lobbyist gifts. Perhaps the legislature could carve out an exemption to the prohibition to accommodate the Governor, but: (A) the prohibition was adopted by the people only two years ago, (B) An exemption would require approval by a 2/3rds vote of both houses, and (C) carving out such an exemption would be counter to the sentiments of the people of Arkansas who in the presidential election shouted “Drain the Swamp!”
If you missed CFA’s September article, “Prohibited gifts to the Governor,” you are probably wondering why the Governor can have his own Political Action Committee, and why lobbyist-related contributions to his PAC are prohibited gifts. Below are summaries of the issues.
It’s legal for an office holder to have a PAC:
- Political Action Committees (PACs) are created to make campaign contributions to support candidates or to support or oppose ballot issues. PACs receive donations from individuals, groups, and corporations who want to financially support the efforts of the committee.
- Elected officials are not prohibited from creating their own PAC, but only a few have done so.
- Governor Hutchinson has his own PAC named “Asa PAC State.” While he has someone to act as the officer, he has acknowledged that Asa PAC State is his PAC and that he makes campaign contributions through it.[i]
- The Governor used his PAC money to make campaign contributions to try to unseat Representative Josh Miller, who is too conservative for the Governor. The Governor also used his PAC to make numerous contributions to his allies, and contributed to a committee opposing a ballot issue. A considerable amount also went to administrative expenses. In fact, the cumulative total of administrative expenses ($184,665.51) is greater than the cumulative total of contributions his PAC has made to other candidates and ballot issues ($168,800).
Lobbyist related gifts to an office holder’s PAC are Illegal:
- Since 2015 it has been illegal for elected officials, including the Governor, to accept gifts from lobbyists and the clients or employers of lobbyists. This prohibition was added to the Arkansas Constitution in 2014. [ii]
- The definition of “gift” in the Constitution is very broad. The definition begins “’Gift’ means any payment, entertainment, advance, services, or anything of value, unless consideration of equal or greater value has been given therefor.” The definition is so broad that it had to include a long list of specific exceptions. See the list of exceptions in the notes at the end of this article.[iii] This definition of “gift” is NOT new. It is modeled on the definition of “gift” in the Arkansas ethics law which has been in effect for many years.
- There is NO exception from the definition of “gift” for lobbyist related contributions to an elected official’s PAC.
- A contribution to the Governor’s PAC personally benefits the Governor by increasing the Governor’s power and influence through his ability to financially support allies and financially oppose opponents.
- A contribution to an elected official’s PAC is very different from a campaign contribution made to the official. A campaign contribution is made to support the campaign of the candidate. A contribution to an office holder’s PAC is made to increase the power and influence of the official as he uses his PAC money to influence the races of other politicians.
- Asa PAC State continues to be supported by contributions from lobbyists and lobbyist clients or employers, which are prohibited gifts under the Arkansas Constitution.
[i] “The governor said he has financially supported his endorsed candidates through his political action committee — called the ASA PAC.” “Hutchinson said he had a previous political action committee called A Secure America that had a broader purpose, and ‘we reformed it since I became governor just to refocus its efforts on Arkansas agendas and legislative races in this state.’” “ASA PAC ‘was formed because a lot of people really care about effective legislators, and those that have worked hard to support my agenda of lowering taxes and growing business in this state, I wanted to be able to support [them], and the PAC serves that function,’ Hutchinson said.” In GOP civil war over private option, Asa Hutchinson takes sides in primary battles, Arkansas Democrat-Gazette 2/28/2016
[ii] Prohibited gifts law – Ark. Const. Art. 19, § 30 (a)
(a) Persons elected or appointed to the following offices shall not knowingly or willfully solicit or accept a gift from a lobbyist, a person acting on behalf of a lobbyist, or a person employing or contracting with a lobbyist:
(2) Lieutenant Governor;
(3) Secretary of State;
(4) Treasurer of State;
(5) Auditor of State;
(6) Attorney General;
(7) Commissioner of State Lands;
(8) Member of the General Assembly;
(9) Chief Justice of the Supreme Court;
(10) Justice of the Supreme Court;
(11) Chief Judge of the Court of Appeals;
(12) Judge of the Court of Appeals;
(13) Circuit court judge;
(14) District court judge;
(15) Prosecuting attorney; and
(16) Member of the independent citizens commission for the purpose of setting salaries of elected constitutional officers of the executive department, members of the General Assembly, justices, and judges under Article 19, § 31, of this Constitution.
[iii] Definition of Gift – Ark. Const. Art. 19, § 30 (b)(2)
(2) (A) “Gift” means any payment, entertainment, advance, services, or anything of value, unless consideration of equal or greater value has been given therefor.
(B) “Gift” does not include:
(i) (a) Informational material such as books, reports, pamphlets, calendars, or periodicals informing a person elected or appointed to an office under subsection (a) of this section regarding his or her official duties.
(b) Payments for travel or reimbursement for any expenses are not informational material;
(ii) Gifts that are not used and which, within thirty (30) days after receipt, are returned to the donor;
(iii) Gifts from the spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin of a person elected or appointed to an office under subsection (a) of this section, or the spouse of any of these persons, unless the person is acting as an agent or intermediary for any person not covered by this subdivision (b)(2)(B)(iii);
(iv) Anything of value that is readily available to the general public at no cost;
(v) (a) (1) Food or drink available at a planned activity to which a specific governmental body is invited, including without limitation a governmental body to which a person elected or appointed to an office under subsection (a) of this section is not a member.
(2) If a committee of the General Assembly is invited to a planned activity under subdivision (b)(2)(B)(v)(a)(1) of this section, only members of the committee of the General Assembly may accept food or drink at the planned activity.
(b) (1) As used in this subdivision (b)(2)(B)(v), “planned activity” means an event for which a written invitation is distributed electronically or by other means by the lobbyist, person acting on behalf of a lobbyist, or a person employing or contracting with a lobbyist to the members of the specific governmental body at least twenty-four (24) hours before the event.
(2) As used in this subdivision (b)(2)(B)(v), “planned activity” does not include food or drink available at a meeting of a specific governmental body for which the person elected or appointed to an office under subsection (a) of this section is entitled to receive per diem for attendance at the meeting.
(c) A lobbyist, a person acting on behalf of a lobbyist, or a person employing or contracting with a lobbyist shall not offer or pay for food or drink at more than one (1) planned activity in a seven-day period;
(vi) (a) Payments by regional or national organizations for travel to regional or national conferences at which the State of Arkansas is requested to be represented by a person or persons elected or appointed to an office under subsection (a) of this section.
(b) As used in this subdivision (b)(2)(B)(vi), “travel” means transportation, lodging, and conference registration fees.
(c) This section does not prohibit the acceptance of:
(1) Food, drink, informational materials, or other items included in the conference registration fee; and
(2) Food and drink at events coordinated through the regional or national conference and provided to persons registered to attend the regional or national conference;
(vii) Campaign contributions;
(viii) Any devise or inheritance;
(ix) Salaries, benefits, services, fees, commissions, expenses, or anything of value in connection with:
(a) The employment or occupation of a person elected or appointed to an office under subsection (a) of this section or his or her spouse so long as the salary, benefit, service, fee, commission, expense, or anything of value is solely connected with the person’s employment or occupation and is unrelated to and does not arise from the duties or responsibilities of the office to which the person has been elected or appointed; or
(b) Service as an officer, director, or board member of a corporation, a firm registered to do business in the state, or other organization that files a state and federal tax return or is an affiliate of an organization that files a state and federal tax return by a person elected or appointed to an office under subsection (a) of this section or his or her spouse so long as the salary, benefit, service, fee, commission, expense, or anything of value is solely connected with the person’s service as an officer, director, or board member and is unrelated to and does not arise from the duties or responsibilities of the office to which the person has been elected or appointed; and
(x) A personalized award, plaque, or trophy with a value of one hundred fifty dollars ($150) or less;