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After blog allegations, Democratic Party of Arkansas panel set to review financial records

by John Moritz | August 9, 2019 at 7:06 a.m.
Democratic Party of Arkansas Chairman Michael John Gray of Augusta is shown in this file photo.

The steering committee of the Democratic Party of Arkansas will convene before the party's biggest annual fundraiser this month to address accusations of financial mismanagement that were levied this week against the party's leadership in a political blog.

The special meeting of the party's State Committee was called Thursday by Democratic Chairman Michael John Gray of Augusta and announced in a letter sent to committee members. The letter stated that the Aug. 17 date for the meeting will allow for "sufficient time for our legal and compliance counsel to review all documentation and records to provide the body a full report."

Matthew Campbell, a Little Rock attorney and blogger, accused Gray of failings as party chairman in two posts on his "Blue Hog Report" blog.

The original post on Tuesday highlighted accounting discrepancies in the party's quarterly reports to the state and questioned the party's spending and raises given to Gray's chief of staff. For example, Campbell stated that the party had quarterly deficits in seven of the past nine quarters, with the largest deficit of $167,250 in the fourth quarter of 2018. He also stated that some quarterly reports were later amended with major differences in amounts of contributions and expenditures.

A second post focused on missing campaign-finance reports from Gray's own unsuccessful re-election bid to the state House last year.

In a phone call on Thursday, Gray denied any wrongdoing and said he would welcome an audit.

"Most of these [accounting issues] have been addressed in previous State Committee meetings," Gray said. "I personally will call for an audit."

The allegations against Gray have thrown open divisions within state Democratic circles that have simmered as the party's grip on top political offices withered away. Republicans now hold all congressional seats, the state's constitutional offices and a majority of both houses of the Legislature.

Gray, a farmer from Woodruff County, was elected chairman of the party in 2017 and won re-election in December.

Chris Burks, an attorney in North Little Rock who worked for the party under Gray's predecessor, called Thursday for Gray to step down. A Twitter account was spawned Wednesday to track whether Gray has resigned.

The Aug. 17 meeting will occur hours before presidential candidate and former U.S. Rep. Beto O'Rourke of Texas is set to deliver the keynote speech at the party's Clinton Dinner in Little Rock.

Gray chalked up calls for him to step down as coming from "disgruntled ex-employees." He specifically referred to Burks, the former outside attorney for the party whom Gray said he chose to replace after becoming party chairman.

"They're still upset that I won," Gray said.

In several interviews with the Arkansas Democrat-Gazette on Thursday, Burks criticized Gray for what he said was a failure to file two final campaign-finance reports for Gray's 2018 re-election campaign.

Burks also questioned $15,000 worth of campaign payments Gray made to the consulting firm of Jason Willett of Jonesboro, who once served as party chairman in the mid-2000s.

Willett also was a consultant for Delta Medical Cannabis Co., of which Gray's mother is a part owner.

"His own campaign-finance report evidences multiple campaign-finance report violations," Burks said. "You can't spend money to benefit your own personal or financial interests, and that's what his campaign shows."

Gray said he would review his past campaign's finance reports for any errors, but asserted that the payments to Willett were solely for work done on behalf of Gray's re-election campaign. In a phone call, Willett concurred, describing Gray as a "dear friend" for whom he continued to do political work even as the rest of his business shifted to the state's medical-marijuana industry.

Burks also has a competing interest in the medical-marijuana industry, Gray claimed. Gray said Burks had done legal work for several applicants seeking marijuana business licenses.

Burks responded that none of his clients were "adverse" to the cultivator business in which Gray's mother has a stake.

Campbell, the blogger, also has a history working with the party. In a phone call Thursday, Campbell said he had been paid in the past for research done on behalf of the party, but declined to say whether he was satisfied with his payment.

He is also an attorney for Misty Fox, who left her job as data director at the party in January. Campbell said he had "back-and-forth" conversations with Gray regarding Fox's exit.

Campbell said it wasn't his experience with Gray and the Democratic Party leadership that led to his digging into the party's financial reports. Describing himself as a regular Democratic voter, Campbell said he wanted the party to address the issues he found before the 2020 election year.

"That's something I'm sure the Republican Party has looked at. They'd be crazy not to," Campbell said in a phone interview Thursday.

Campbell later sent a message to a reporter through Twitter that he's filed a complaint against Gray with the Ethics Commission.

Neither Campbell nor Burks are members of the State Committee, and thus will not have a vote at the Aug. 17 meeting. The committee -- with more than 250 members -- includes Democratic members of the state Legislature.

Three Democratic lawmakers said that an audit would be appropriate to review the party's finances.

"I think there's a consensus among my colleagues that we hope to see independent review of the finances very soon," said state Rep. LeAnne Burch of Monticello, the House minority whip.

House Minority Leader Rep. Fred Love of Little Rock said he felt an "internal" audit would be conducted, while Rep. David Whitaker of Fayetteville said he supported bringing in an outside auditor.

Information for this article was contributed by Hunter Field of the Arkansas Democrat-Gazette.

Chris Burks
Photo by Staton Breidenthal
LeAnne Burch
Photo by Arkansas Secretary of State
Michael John Gray

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