LITTLE ROCK — The Arkansas Ethics Commission dismissed a complaint Friday against a group that promoted Little Rock’s successful campaign to triple the city sales-tax rate.
Campaign-finance reports filed by the Committee for Little Rock’s Future were at the center of an official complaint submitted by Max Brantley, the senior editor of the Arkansas Times, who contended that the group should have disclosed who was paid with the money that went to hired campaign organizers.
The committee paid the Markham Group $196,253 to run the campaign to raise Little Rock’s sales-tax rate from a half-percent to 1.5 percent.
“The Markham Group did the activity of the committee,” said Rita Looney, an attorney for the Ethics Commission, during a public hearing Friday about the complaint.
Looney tried to make the case that because the consulting firm bought advertising, coordinated phone calls and direct mailing on behalf of the committee, their expenses should have been disclosed.
“Then every one of these committees are going to have to chase $100 payments from the top down,” said Kevin Crass, an attorney representing the Committee for Little Rock’s Future.
A number of legislative question committees in recent years have reported campaign expenses in the same way, Crass said, showing the commission several examples of other filings. The form itself says “itemized expenditures made by the committee of $100 or more,” Crass said.
Robert McClarty, a partner in the Markham Group, also testified that he had been involved in campaigns in which similar reports were made.
“It would put us at a competitive disadvantage if we disclosed some of our vendors,” McClarty said, adding that revealing their pre-purchased advertising or that they were doing direct mail “could be very telling on what kind of campaign we’re running.”
Crass also told commissioners that the person who did the campaign-finance report consulted with Ethics Commission staff and was told reporting the checks to the Markham Group complied with state law.
Jay Chesshir, president and chief executive officer of the Little Rock Regional Chamber of Commerce, testified that although he was not a member of the sales-tax committee, he received the group’s contributions and prepared the financial forms.
Chesshir said he asked an Ethics Commission staff member ahead of time whether reporting the checks to the Markham Group was sufficient and was told it was.
However, Todd Elder, an attorney for the Ethics Commission, testified that Chesshir didn’t talk to him until after the report was filed.
Soon after the first financial form was filed, Brantley, writing on the Arkansas Times blog, started questioning and criticizing the lack of details. Brantley saw the use of a third party by anyone as a way to circumvent reporting requirements and feared the practice would “open the door to abuse and end campaign-spendingaccountability.”
His criticism prompted the sales-tax committee to file documentation detailing how much money had been spent on specific categories. The addendum didn’t identify who received the payments.
Chesshir, who described himself as a liaison betweenthe Markham Group and the sales-tax committee, said he did not think of the consultants as a “conduit” with free rein but as a firm hired for its professional services.
Crass also argued that the Markham Group was a professional service expense, similar to hiring an attorney during a campaign.“This is about what the statue requires, not what Mr. Brantley thinks it should require or even what this commission thinks it should,” Crass said. “If the law needs changing, you can do two things. ... Go to the legislature ... or put out new rules.”
Brantley’s complaint was the first time the Ethics Commission had been asked to investigate whether information disclosed by a legislative-question committee was sufficient.Looney said the Ethics Commission didn’t have the staff to delve into reports to determine whether they were correct. Filing a complaint triggers an investigation like the one that took place after Brantley’s Election Day complaint.
On Sept. 13, Little Rock voters approved the tax increase, which over the decade will pay for additional police officers, new police and fire stations, a new public-safety communications system and City Hall operations, along with road and drainage improvements and expensive capital projects.
The new sales-tax rate kicks in Jan. 1 - shoppers will pay a total of 8.5 percent in sales tax when combining city, county and state sales taxes.
After a two-hour public meeting Friday, the commission met in private for less than a half hour before reconvening and voting 4-0 to dismiss Brantley’s complaint, with Chairman Catherine Johnson recusing because of a relationship with Crass’ firm.
“They were presented with a difficult legal question,” Brantley said.
“I don’t think that’s a good outcome even if it’s a correct outcome,” Brantley said after the meeting. “I think they’ve ratified a process where they won’t see any need to disclose anything than the one check they wrote.
“I hope they move to close a pretty big loophole.”
Graham Sloan, director of the Arkansas Ethics Commission, expects that the commission will try to alter the law in a future legislative session.
“There’s a gap in disclosure. I think there will be some proposed statue to be changed to close that gap,” Sloan said.
“[It] is way too early to speculate,” he said, what those changes will be.
Arkansas, Pages 11 on 12/17/2011