Ethics at fore in treasurer's race

Candidates say rebuilding trust key after Shoffner case

Nearly 17 months after state Treasurer Martha Shoffner resigned, Saline County Circuit Clerk Dennis Milligan of Benton and retired Weyerhaeuser Corp. accountant Karen Garcia of Hot Springs are promising ethical leadership and touting their individual experience in their bids for the office.

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Biography of Treasurer candidate Karen Garcia.

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Biography of Treasurer candidate Chris Hayes.

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Biography of Treasurer candidate Dennis Milligan.

Chris Hayes of Little Rock, an office manager for Woodbury Technical Service, also is seeking the treasurer's job in the Nov. 4 general election.

The office manages $2.7 billion in investments for the state, according to office officials. The investments are in bonds, money market accounts, short-term corporate debt and deposit accounts in banks, they say.

The office has a $4.8 million budget in fiscal 2015 and 33 total employee positions, 25 of which are currently filled.

Shoffner, a Democrat from Newport, was caught on camera accepting bribes from bond broker Steele Stephens, who worked for St. Bernard Financial Services. She resigned as the state's treasurer on May 21, 2013. Shoffner was convicted in March on 14 extortion and bribery charges.

During Shoffner's trial, Stephens testified that he secretly gave Shoffner $36,000 in cash over a 2½-year period, during which his employer's share of the state's bond business increased exponentially.

Former Legislative Auditor Charles Robinson of North Little Rock, a self-described independent, has been the state's treasurer since Democratic Gov. Mike Beebe appointed him to the vacant post on May 29, 2013.

Milligan is the Saline County circuit clerk and has served as chairman of the Republican Party of Arkansas. He narrowly lost in races for the state House of Representatives in 2002 and 2004.

Garcia is a member of the Hot Springs Board of Directors and the former treasurer of the Democratic Party of Arkansas.

Hayes, a Libertarian, ran unsuccessfully for Congress in 2012.

The state treasurer's salary is $54,848 a year.

The treasurer also serves on the boards of the Arkansas Teacher Retirement System, Arkansas Public Employees Retirement System and the Arkansas State Highway Employees Retirement System.

Collectively, the three retirement systems -- with more than 180,000 working and retired members -- manage about $22 billion in investments.

Milligan said voters should cast their ballots for him because of his business and political experience. As circuit clerk, he said he oversees 22 workers.

"I am a job creator. I know what it is like to make a Friday payroll," said Milligan, who owns or co-owns three business ventures.

He said he has improved the clerk's office by implementing a jury notification system, placing the office's public records on the Internet, working to get an updated courtroom for the county, and successfully lobbying for legislation to prevent circuit clerks from pocketing property foreclosure fees in addition to their salaries.

"We have been able to lead strongly at a county level, and I don't have any doubt that we can bring that to the state level," Milligan said.

Garcia said she's the best candidate for the treasurer's job because she's a licensed professional accountant who worked for 26 years for a Fortune 500 forest-products company, earning a reputation "as a no-nonsense accountant and manager.

"I am not a professional politician," she said. "The state treasurer's office needs a professional accountant more than ever."

Garcia said she managed employees and provided ethics training for Weyerhaeuser, and "I can hit the floor running and day one bring about reform and trust in the state treasurer's office to every taxpayer in Arkansas."

She said Milligan fired some longtime employees in the Saline County circuit clerk's office, leading to lawsuits, including one that was settled for more than $90,000.

Milligan said through a spokesman that he kept most of the office's employees, but some whom he didn't retain filed lawsuits against him. He said he made changes in the office, and they necessitated that he let some employees go.

Hayes said he gives voters a political-party option. "Why not elect a different party and a different person who is not affiliated [with the Democratic and Republican parties]," he said.

What they'd do

Milligan and Garcia said their employees would be barred from accepting gifts from anyone doing business with the treasurer's office and that they wouldn't accept them either, if elected.

"We are going to help reassure Arkansans that we are going to build that office back up and make it one of the best in the country, and the no-gifts policy will help ensure that we are on the up and up," Milligan said.

Garcia put it this way: "No backroom deals. No secrecy. No cronyism ... I want to bring the trust [of Arkansans] back."

Both candidates also pledged to place detailed information about the treasurer's office's investments on the office's website.

Milligan said he would implement "a blind bidding process" under which the office's employees wouldn't know the identities of the bidders until the best bid has been determined.

Milligan questioned Garcia's accounting experience, noting that she had received a letter of caution from the state Ethics Commission after she failed to properly fill out a campaign finance report.

"If you profess to be a professional accountant and you can't even fill out a simple contribution and expenditure report, I would think that Arkansans ought to be a little worried about how she is going to handle $65 million, $75 million a day [in state funds in the office]," Milligan said.

Garcia said Milligan is trying to blow "a very minor issue " about an incomplete address "out of proportion."

In settling the matter, Garcia agreed that she violated state law by omitting the address of a contributor on her March campaign finance report and reporting an incorrect amount on her June campaign finance report as the cumulative total received during the entire election cycle.

Garcia noted that an ethics complaint has been filed against Milligan alleging violations of state ethics laws. Lindsay Brown of North Little Rock filed the complaint against Milligan last month.

As for Milligan, Garcia said it's been reported "that he tried to blackmail a state representative out of the primary at a Krispy Kreme doughnut shop, and we don't [need] to go from Martha Shoffner's pie boxes to Dennis Milligan's Krispy Kreme doughnut boxes."

Last November, Milligan's Republican opponent, state Rep. Duncan Baird of Lowell, told reporters that Milligan claimed to have damaging information about him and urged Baird to drop out of the race unless "you want to see this on the 7 o'clock news."

The information was a video of Baird and three other lawmakers, including House Speaker Davy Carter, R-Cabot, walking into the state Capitol with two women about 2 a.m. Oct. 18, 2013, after a special legislative session had finished business for the day. The group's members wanted to go up to the Capitol roof, but they were turned away by Capitol Police, according to emails about the visit.

At that time, Milligan said it was "simply a lie" that he wanted Baird to drop out of the GOP primary race. That prompted Baird to give reporters copies of what he said was his taped conversation with Milligan during his meeting at the Krispy Kreme doughnut shop. A voice on the tape says "Here's the bottom line, you're finding a new career, you're not going to run for state treasurer. OK ... you want to see this on the 7 o'clock news."

Milligan later countered that "neither of us will agree on the interpretation of the full quote." He added that he had no plans to use the information himself but that "my sources said they planned to leak it." He declined to disclose his sources.

Asked about Garcia's criticism of Milligan over the incident, Milligan replied last week that, "I have a simple answer for that.

"I won that primary by eight points," Milligan said. "I never trailed on election night. End of story." According to the secretary of state's office, Milligan defeated Baird by winning 53.5 percent of the vote to Baird's 46.5 percent.

Milligan alleged that Garcia "took $1,500 from a 501(c)(3)," -- the Arkansas Professional Women's Association that she headed -- and "that's illegal."

That "would be like getting a check from my church made out to me," Milligan said.

But Garcia denied taking any 501(c)(3) money.

Section 501(c)(3) is the part of the U.S. Internal Revenue Code that allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations or private operating foundations.

Garcia said she received contributions from the Spa Area Business and Professional Women's Club in Garland County, that she's past president of the group and that the Ethics Commission ruled it wasn't a prohibited source of contributions.

She said she also received a contribution from the Arkansas Business and Professional Women's PAC and that it's been a registered PAC with Arkansas for several years. That's separate from the Arkansas Federation of Business and Professional Women, for which she served as state president in 2005, she said.

Milligan said Garcia has attended the past two Democratic National Conventions and supports President Barack Obama and his agenda.

But Garcia said that the state treasurer's office "is not an office for partisan politics, and there will not be any politics under Karen Sealy Garcia.

"This is about doing the business and being the banker for the state of Arkansas, and it is about dollars and cents," she said.

Metro on 10/20/2014

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