The director of the Arkansas Fair Housing Commission said a proposal to merge her agency into another state agency would create a conflict of interest.
House Bill 2053 by Rep. Kim Hammer, R-Benton, would move the commission into the Arkansas Development Finance Authority. It was approved by House last week and has been referred to the Senate Committee on Insurance and Commerce.
On Monday, commission Director Carol Johnson said during a Legislative Black Caucus meeting that the Finance Authority is intertwined with agencies subject to fair-housing investigations. She said Arkansas Attorney General Leslie Rutledge's office agreed, but a spokesman from the office later declined to confirm the accuracy of the comment.
"They finance housing authorities and places like that, [and] a lot of our complaints come against housing authorities and [Finance Authority] participants -- a large majority -- and that's where the conflict comes in," Johnson said. "If they have to recuse on 80 percent of those cases ... then what's the purpose of having it there?"
The commission's mission is to enforce state and federal fair-housing and lending laws and to educate the public on those laws, rules and regulations.
The Finance Authority is the state's largest source of low-cost financing for low- to moderate-income housing developments and other projects. Its president, Aaron Burkes, said there was no conflict because the agency helps low-income residents.
"Part of our grant, part of our obligations is to affirmatively further fair housing, so we're not going to be adversarial. We're going to be very much in alignment," he said. "If a developer has a pattern of discrimination, for example, or a management company has a pattern of discrimination, we will put them on a list where they're suspended from using [Financial Authority] programs."
Caucus members said they would ask Gov. Asa Hutchinson to meet about the bill.
The governor was not aware of the bill until after it was filed, said J.R. Davis, a spokesman for Hutchinson. The office has been neutral on the bill, he said.
Hammer is sponsoring the legislation because of repeated findings of fiscal mismanagement at the commission, the legislator said.
He has said legislative auditors have found problems with insufficient segregation of funds at the commission.
He distributed to committee members a copy of a news story about a legislative audit that found the commission made a $1,500 payment to the state Democratic Black Caucus for an advertisement in a 2013 program for the King-Kennedy Dinner. The payment appeared to be a prohibited political contribution, according to auditors.
The commission said it placed the ad in the dinner's program to reach the more than 4,000 people who attend the event and an even larger number of black Arkansans, but it wouldn't place ads at any future events.
Sen. Joyce Elliott, D-Little Rock, said Monday that state agencies often have audit findings.
"It is not unusual for any agency in this state to take out ads or to do promotional things," she said. "The fact that there is an audit finding is not something that should be motivational for anybody to try to get rid of the commission."
A Section on 03/14/2017