Governor's race sees big donors

A Tennessee-based housing and resort developer -- along with his companies, executives and family -- is the largest donor so far to Arkansas' gubernatorial race between Republican Asa Hutchinson and Democrat Mike Ross.

Developer Gary Gibbs of Franklin, Tenn., is connected to more than $70,000 in contributions to Ross' campaign, according to campaign finance disclosure data analyzed by the Arkansas Democrat-Gazette.

In the newspaper's review of campaign contributions through Aug. 31, Gibbs and his companies stood out because of the size of the gifts and because Gibbs apparently hasn't been a high-profile donor in statewide campaigns in the past.

The 15 largest donors in the race also include Fortune 500 company executives, a high-profile Texas law firm and an emergency medical services provider, as well as nursing home, oil, poultry and finance interests.

Lawyers and family members associated with the Nix Patterson & Roach LLP law firm of Daingerfield, Texas, that has an office in Texarkana, Texas, have given at least $58,000 to Ross, campaign finance records show.

Nix Patterson attorneys and family members have been among the largest political contributors to certain Arkansas races in recent years and have given more than $50,000 to U.S. Sen. Mark Pryor's current re-election campaign.

Pafford Emergency Medical Services Inc. of Hope -- and related companies, relatives and executives -- contributed at least $56,125 to Ross. The company, which operates in four states, has given $27,500 to the Arkansas Democratic Party since 2011, records show.

Hutchinson's biggest donors include the extended Murphy family of El Dorado, and Wal-Mart interests.

Murphy-related oil and timber companies and executives gave at least $47,400 to the Republican candidate for governor, according to campaign finance records.

Wal-Mart Stores Inc., company executives and Jim Walton family members gave more than $42,600.

Arkansas' campaign finance laws limit contributions from a single person or company to $2,000 per candidate, per election cycle.

Campaign contribution limits exist to prevent an individual from having too much financial influence over a candidate or public official, experts say. But well-financed donors who want to spend more can legally contribute through numerous family members, company executives or several of their corporations.

Developer Gibbs cobbled together donations from at least 18 companies and eight Gibbs family members and business executives. Though the donors' names and addresses vary, the individual gifts often carry the same dates on campaign finance reports: $27,000 in donations dated Dec. 30, 2013, $36,000 on July 31 this year. That's the pattern for many large campaign contributors.

The newspaper contacted the 15 families and companies that have made the largest donations in the Arkansas governor's race so far to learn how they decide which candidate to back and what they hope the donations accomplish for the candidates or their own interests. Most declined to respond or didn't return calls or emails. Some said their donations are private matters. A few talked about whether contributions help them get access to elected officials or affect their votes.

Dorothy Jacobs, executive vice president and chief financial officer for Gibbs' company Coastal Phoenix Investments LLC, said Gibbs and the company were not interested in discussing their involvement with Ross and the governor's race.

"I've discussed it with Gary, and we're not going to comment," she said.

In a later interview about his Arkansas business ventures, Gibbs said: "I don't care if anybody knows who I am, but there are certain points ... you try to help people. I've made very large investments in Arkansas in a distressed area. I want my privacy and will not talk about donations."

Michael Morton of Fort Smith, who owns nursing homes across the state and contributed $40,000 to the Ross campaign through his businesses, says he knows some people assume big donors expect to buy candidates' votes.

"People are crazy if they think that. I don't ever think that way," said Morton. "The only thing I want is for them to give me the opportunity to present my case, whatever that case may be."

Graham Catlett of Little Rock, a lawyer and business operator, has given $20,000 through family and companies to Ross' campaign for governor. He said he doesn't donate even to gain access. He wants to help promote his favorite candidates' efforts to be heard.

"Arkansas is a small state," Catlett said. "Every elected officer I've known is extremely accessible whether or not you give any money. ... I encourage everyone to make contributions to candidates in whatever amount they can. These races are very expensive, and it's important for the candidates to get their views out."

Ross' and Hutchinson's campaigns declined to be interviewed for this story. They did respond to the newspaper's questions with short emails.

The political publication National Journal has "consistently ranked" Ross as "one of the most independent members of Congress, and that's because he doesn't listen to party leaders or special interests -- he listens to the people of Arkansas," campaign spokesman Brad Howard wrote in an email.

"We are proud of all of the support that we have received from across Arkansas and folks who have joined our campaign," Hutchinson campaign manager Jon Gilmore said in an email.

Why donate?

Although most big donors to Hutchinson and Ross declined to be interviewed, records and news accounts show that some do conduct business involving government entities.

Gibbs and his companies, for example, have been building or consulting on tax-credit-funded housing developments in Arkansas since at least 2000, records show. He's building units in Warren, McGehee and outside of Lake Village using tax credits and other government incentives.

His Coastal Phoenix Investments "offers extensive development expertise in origination and closing of financial structures," the company's website says. It lists government-connected finance programs, including "low-income housing tax credits, historic tax credits, Federal Housing Administration and United States Agriculture Agency."

Gibbs also has built a multimillion-dollar, sport-shooting resort in southeast Arkansas at Tillar, the Delta Resort & Spa. For nearly two years, Gibbs also has worked to finalize a purchase of the Austin Hotel in Hot Springs.

Nursing home owner Morton was the only large donor who spoke at length about why he and his companies give tens of thousands of dollars to Arkansas political campaigns.

He deals constantly with government rules and regulators, he said.

"The business I'm in, providing 24-hour care to elderly people, is a mandated program in each state. There are rules and regulations that states and the federal government have. And the reimbursement [for low-income patients' care] comes from the state and federal government," Morton said.

"I have to have some input into the process. ... You have to be able to present your case to the regulators and the people who control the money. That and fight off laws to ruin your business," Morton said.

Donations from Morton to former Circuit Judge Mike Maggio's campaign for the state Court of Appeals drew statewide attention this year. Morton gave $24,000 in 2013 to political action committees that forwarded more than $12,000 to Maggio's campaign, according to testimony to state investigators.

Around the same time, Maggio presided over a May 2013 trial in which a Faulkner County jury granted a $5.2 million judgment against a Morton-owned nursing home.

A day after the PACs delivered the Morton money to Maggio on July 9, 2013, Maggio signed an order reducing the judgment against Morton's nursing home to $1 million.

The Federal Bureau of Investigation confirmed this month that it is looking into the matter.

Maggio abandoned his higher-court race earlier this year. The Arkansas Supreme Court this month removed Maggio from the bench for violating judicial codes in connection with disclosing details online about a confidential adoption and posting remarks about gender, race and sexuality issues.

Morton has said he did nothing illegal involving the contributions to Maggio and didn't ask the then-judge to reduce the jury's award. He says the timing was a coincidence.

"People look at people like me and say he's out there trying to buy a vote," Morton said last week. "But I'm not trying to buy a vote. ... The reason I give money is so I can have access. It doesn't guarantee anything. I have backed people politically, and they wouldn't give me the time of day.

"That's the last time I backed them," he added.

Jamie Pafford-Gresham, president of Pafford Medical Services Inc. of Hope, suggested that her family has different reasons for backing Ross' campaign -- a long-standing relationship with the Democrat, who lived in Prescott in south Arkansas until 2013.

"I have had the pleasure of knowing Mike and [his wife] Holly on both a professional and personal level for nearly 20 years," she wrote in an email. "My family and I ... all feel strongly about being politically active."

Most recent reports

The most recent campaign finance reports for the governor's race -- filed Wednesday -- show the Ross campaign leads in contributions, receiving about $6.2 million since Jan. 1 last year. Hutchinson reports about $3.8 million. Both are former U.S. congressmen.

Polls of likely voters in the past month show Hutchinson in front by 2 percentage points to 11 points, according to RealClearPolitics of Chicago, a political news and polling website. Margins of error were estimated at between 2 points and 4.4 points.

The general election is Nov. 4. Early voting begins Monday.

Individual contributions reviewed by the newspaper didn't include last week's filing, which covered donations in September. Arkansas doesn't require candidates to file electronically. When they choose to file paper reports, as the Hutchinson and Ross campaigns have, it takes weeks for researchers to enter the data electronically for analysis.

To facilitate the newspaper's review, the Democrat-Gazette used electronic data from the reports compiled by the nonprofit, nonpartisan National Institute on Money in State Politics in Helena, Mont.

The newspaper reviewed more than 13,800 contributions to Ross' and Hutchinson's gubernatorial campaigns between Jan. 1, 2013, and Aug. 31 this year.

Photocopies of individual campaign finance reports are posted online on the Arkansas secretary of state's website, www.sos.arkansas.gov/elections/.

The newspaper's review also did not include "dark money," potentially millions spent by groups working outside the campaign to produce advertising, especially television ads.

Those nonprofit groups usually are not required to reveal their donors. They also aren't supposed to directly ask for votes. But viewers often can't distinguish between their messages and those sponsored by the official campaigns and their donors.

Madison Murphy of El Dorado, like most large donors, has little to say about the political donation process and why large donors give so much.

He has told the newspaper that his relatives and the family businesses -- which include oil, timber and investment interests -- decide individually whom to support.

Chairman of the board of Murphy USA and managing member of Murphy Family Management LLC in El Dorado, Murphy and his wife, Suzanne, have given $8,000 to Hutchinson in the governor's race. He also gave $2,000 to Ross.

"Both candidates are credible, accomplished men, and Arkansas is fortunate to have them as candidates. But you've got to be for somebody," Murphy wrote in an email.

SundayMonday on 10/19/2014