The Joint Budget Committee of the Arkansas General Assembly voted Tuesday to require the state Securities Department to file a quarterly report with the Legislature on money received as a result of court orders or settlements.
Rep. Andrea Lea, R-Russellville, sponsored the amendment in response to a dispute between Securities Commissioner Heath Abshure and Stephens Inc., which protested contributions to the North American Securities Administrators Association in lieu of fines, which would go to the state treasury.
The “special language” added to House Bill 1114 is “not to be incorporated into the Arkansas Code nor published separately as special, local and temporary law.” The amendment will be sent to the full House, and if it approves it, then the Senate before it goes to Gov. Mike Beebe, who has said he is in favor of halting the practice of making contributions in lieu of a fines. Sen. Larry Teague, D-Nashville, co-chairman of the Joint Budget Committee, said that the language’s intent is to promote transparency.
“I see smooth sailing” for the legislation, Lea said.
Stephens Inc. led the effort to halt the practice even though Crews and Associates made the largest contribution in lieu of a fine, $150,000, of the total $170,000 against three firms. Crews did not join Stephens in the effort to amend the Arkansas Securities Act.
Abshure was either a board member or president of the North American Securities Administrators Association when the contributions to the group were made.
David Knight, general counsel for Stephens, said that while the language does not halt the practice, the investment bank has not given up its efforts to that end.
The amendment states: “The Securities Department shall on a quarterly basis provide to the Arkansas Legislative Council or Joint Budget Committee a report of all funds received or any external fund transactions recognized or required through court orders or settlement agreements.”
It further states that “the provisions of this section shall be in effect only from July 1, 2014 through June 30, 2015.”
Abshure testified Tuesday that he had no problem with filing the quarterly reports.
In a telephone interview, Abshure was adamant that the issue was not about “diversion of fines.”
“I don’t have the ability to divert a fine. When something is designated a fine it has to go to the [state] treasury.”
The $170,oo0 at issue was never deemed fines, he said.
A hearing officer must decide whether a fine is to be levied, or if there is a settlement between parties, Abshure said.
“Preparing a report on what is already public information doesn’t bother me at all,” he said.
Beebe, who appointed Abshure as securities commissioner in December 2007, has told Abshure that in the future, funds such as those contributed by Crews and the other two firms, should be paid into the state treasury, Matt DeCample, Beebe’s spokesman, said earlier this month.
Business, Pages 24 on 02/19/2014