Today's Paper Latest Sports Core Values Weather Newsletters Obits Puzzles Archive Story ideas iPad
ADVERTISEMENT
ADVERTISEMENT

Groups use Arkansas PACs loophole to donate above campaign contribution limits

Gifts multiplied by giver’s PACs by Lisa Hammersly | July 10, 2022 at 10:10 a.m.
Bruce Hawkins (left), the leader of DBH Management Consultants in Morrilton, and Graham Sloan, director of the Arkansas Ethics Commission, are shown in these undated file photos. (Arkansas Democrat-Gazette file photos)


When the Arkansas Asphalt Pavement Association decided to help Sarah Huckabee Sanders in her 2022 Republican primary for governor, the group's political action committee sent a check for the legal limit, $2,900.

That's the current ceiling under state law for an individual or political action committee to give one candidate, for one ballot race.

But when DBH Management Consultants in Morrilton wanted to help float Sanders' primary run, it was able to kick in checks for $16,400. If the lobbying firm led by former legislator Bruce Hawkins had wished, it legally could have given as much as $20,300.

The difference? The Asphalt Pavement group fields just one political action committee, or PAC.

Hawkins' DBH Management has seven.

In Arkansas, each PAC can donate the state limit of $2,900 -- a loophole in state campaign contribution limit laws when one organization fields many PACs, experts say.

Campaign finance disclosure data shows groups of business and political interests and lobbyists with multiple PACs give some favored candidates substantially more in contributions than Arkansas allows for one individual or a group with only one PAC.

Commerce in Action, a Fayetteville conservative-causes group affiliated with nine PACs, gave $22,400 this year to unsuccessful Republican primary hopeful Wade Dunn, running for the state House.

The Arkansas Realtors Association, with two PACs, gave four legislative candidates at least $11,600 each.

While Arkansas permits such contributions from related PACs, federal election rules and some other states do not.

Limits on campaign contributions are designed to prevent any one person or group from gaining too much influence over a candidate or elected official, said Graham Sloan, director of the Arkansas Ethics Commission, which enforces the state's election rules.

Campaign contribution limits serve an important purpose to reduce undue influence and political corruption, said Patrick Llewellyn, director for state campaign finance for the Campaign Legal Center, a Washington, D.C., nonprofit.

But to be effective, those laws cannot contain loopholes, he said.

Allowing the same person or group to set up multiple PACs that have separate contribution limits "could permit wealthy special interests to effectively multiply how much money they can give to a candidate," Llewellyn said.

The Federal Election Commission and some states have rules in place to restrict contributions from related PACs.

Federal rules require that PACs "established, financed, maintained or controlled by the same person or entity or group" are considered "one political committee for contribution limits purposes," Llewellyn said. Some states have similar rules.

The Arkansas Election Commission's Sloan says such rules -- related entity restrictions -- mean two or more related PACs couldn't contribute more than the limit for one PAC.

Arkansas has no such restrictions on related PACs, Sloan said.

Politically minded organizations in this state have long offered campaign contributions through PACs, which serve as organizations' campaign contribution committees. Groups usually operated just one.

Today, the four biggest-giving Arkansas organizations each donate through multiple PACs, according to state campaign finance disclosure data. And more groups that donate smaller amounts also have more than one.

The four top PAC donor groups include: the Arkansas Realtors Association of Little Rock, representing agents and brokers, two PACs; Arkansas Health Care Association, serving nursing home owners, three PACs; DBH Management Consultants, a longtime lobbying firm that organizers say advances clients' issues, seven PACs; and Commerce in Action, the Fayetteville-based group promoting conservative business and free-enterprise issues, at least nine PACs.

The four organizations' total campaign contributions this election year range from $140,000-plus from Commerce in Action, which is affiliated with the better-known Conduit organizations, to $230,000 by the Realtors group, according to data from the most recent candidate campaign finance disclosure reports filed from Jan. 1, 2021, through June 30 this year.

Hawkins says DBH Management Consultants fields seven PACs "because of the number of lobbyists in our firm, the number of clients we represent and the amount they want to contribute and/or have consistently contributed to the election process over the years."

His company "represents various clients in numerous industries, and representing their interests is the primary goal of our PACs," Hawkins wrote in an email.

Like other representatives of groups that utilize multiple PACs interviewed for this article, Hawkins didn't directly address questions about whether the practice allows organizations to legally work around state campaign contribution limits.

"We diligently abide by the current laws, rules and regulations," Hawkins wrote.

GETTING NOTICED

"There used to be not many" groups that operated multiple political action committees, said Arkansas State Chamber of Commerce President and CEO Randy Zook. His organization oversees two PACs, one for business operators generally, another for manufacturers.

He doesn't see organizations with multiple PACs generally as "over the top." But Zook looks differently at those that use their PACs to supply a single candidate with $10,000, $15,000, $20,000.

"Those are the ones I find more challenging to justify," Zook said. "Where it's basically one source of money from one contributor, that's sort of stretching" the rules.

Still, Zook says that in his experience, "contributions have very little to do with how an official votes in the legislature. All we ask from a candidate is a chance to make a case. That's it, and that's about all we ever get."

Political observers say large multiple donations from a single organization usually do get noticed by candidates or their treasurers.

And those big campaign contributions can be particularly significant for candidates in lower-cost district races such as state House or Senate, political experts say. A district candidate's spending for an entire primary contest can total less than $100,000, so $10,000 or more from one organization is a substantial leg-up, they say.

In addition to Sanders' $16,400 from DBH Management and Dunn's $22,400 from Commerce in Action, candidates who have received at least $8,000 in campaign donations so far this election year from groups with multiple political action committees include:

• Republican state Sen. Bob Ballinger in his primary reelection loss for Senate District 28, $16,900 from five DBH Management PACs.

• Republican Jodie Lee Harris, $14,300 from six Commerce in Action-connected PACs in her Northwest Arkansas primary loss for House District 25.

• Republican Rep. Clint Penzo, who won his primary for state Senate District 31, at least $11,600 from Arkansas Realtors PACs and $10,000 from five Commerce in Action PACs.

• Gubernatorial candidate Sanders, $11,600 from two Arkansas Realtors Association PACs.

• Republican Don McNaughton, $11,600 from Arkansas Realtors in his primary loss in the House District 22 race.

• Republican Rep. Spencer Hawks, who lost his primary race for Senate District 17, $11,600 from two Arkansas Realtors PACs.

• Rep. Jim Dotson, $8,700 from two Arkansas Health Care PACs for his Republican primary win for state Senate District 34.

• Republican Rep. Jeff Wardlaw, $8,500 from four DBH Management PACs, in his race for House District 94.

The Arkansas Asphalt Pavement Association, which represents asphalt plants, has given $11,800 through its single PAC, according to candidates' campaign finance disclosure reports. Executive director Park Estes says his group isn't considering adding more political action committees.

Two $2,900 donations to Sanders have been the group's largest. Contributions to other candidates' campaigns ranged from $500 to $1,500.

For this article, the Arkansas Democrat-Gazette reviewed and analyzed records of more than 4,350 campaign contributions from PACs to state candidates, totaling $6.2 million, from January 2021 through the most recent reporting deadline this year, June 30.

The data is available to the public from the Arkansas Secretary of State's campaign finance disclosure website, https://financial-disclosures.sos.arkansas.gov/#/index. Campaign donations for the 2022 elections will continue through at least the Nov. 8 General Election.

ETHICS LAW CHANGES

Until 2014, Arkansas allowed businesses to give directly to candidates for state office. That made PACs less important for some business operators. Owners of multiple businesses could directly pump tens of thousands to a single candidate.

The rules changed in November 2014 when Arkansas voters approved Ballot Issue 3, billed as ethics reform. The constitutional amendment, among other measures, banned direct corporate contributions to candidates. One sponsor was former Republican state Sen. Jon Woods, later convicted and imprisoned on federal corruption charges.

After the corporate contributions ban, PACs became more important to organizations that wanted to contribute to campaigns. More than 530 PACs currently are registered in the state, according to the Arkansas secretary of state's financial disclosure website.

As long as Arkansas keeps its current election laws, a single organization's multiple PAC donations may be a moral issue, but not a legal one, said Randy Coleman, an attorney for Bruce Hawkins' DBH Management Consultants.

State elections are under states' control. "If Arkansas legislators wish, they could pass a law saying all Arkansas PACs related to one organization have to be aggregated, and apply one contribution limit, as they do on the federal level," he said.

"But right now, I don't see that you have an issue, really. Some states will sell you a gun when you're 18 and some won't; some allow abortion, some don't," Coleman said.

"If somebody thinks PACs should be aggregated on the state level, they should get a legislative solution to it."

Sloan of the Arkansas Ethics Commission says he can see legitimate reasons for a group to have multiple PACs. The commission disciplines candidates and others who violate election laws.

He would discourage anyone from setting up several PACs with the intent of circumventing campaign contribution limits.

"You can get into trouble for that," he said.


Print Headline: Law lets political donors top limit

ADVERTISEMENT

Sponsor Content

ADVERTISEMENT
ADVERTISEMENT