Citing financial reasons, the Arkansas National Guard Foundation has terminated its fundraising counsel agreement with Catherine Johnson, the wife of state Sen. Mark Johnson, R-Ferndale, the foundation's executive director said Friday.
Foundation Executive Director Damon Cluck said "we couldn't fund the programs we laid out and her contract indefinitely."
Catherine Johnson has been paid $70,000 -- $10,000 a month under her fundraising counsel agreement with the Arkansas National Guard Foundation since Jan. 1 -- and will be paid $30,000 in severance Aug. 1 under terms of the agreement, Cluck said in an interview.
He said Catherine Johnson has been paid out of income from the foundation's endowment -- which has dropped in value from about $1.5 million to roughly $1.3 million because of turbulent investment markets since Jan. 1 -- and the foundation couldn't sustain its programs and her monthly fee. He said Catherine Johnson was notified Wednesday night about the board terminating the agreement.
"She did a lot of great things for us," Cluck said. "She helped us mature our organization."
He said he only met Mark Johnson one time.
"We are not political," Cluck said.
Mark and Catherine Johnson declined to comment Friday about the termination of her fundraising counsel agreement with the Arkansas National Guard Foundation.
Cluck confirmed the termination of the foundation's agreement with Catherine Johnson a day after the Legislative Council on Thursday delayed action on Gov. Asa Hutchinson's administration's request to transfer $5 million in state-restricted reserve funds to the Arkansas National Guard Foundation.
In addition, the Legislative Council on Thursday delayed action on the Hutchinson administration's requests to transfer $750,000 in state rainy-day funds to support the World Services for the Blind in Little Rock and to grant the state Division of Heritage spending authority to allow the attorney general to donate $250,000 in lawsuit settlement proceeds to the Sultana Historical Preservation Society in Marion.
The council's action came after Mark Johnson told lawmakers that Catherine Johnson is a registered fundraising counsel who advises the three groups on their fundraising, and he filed a disclosure about his potential conflict of interest before the council meeting.
A subcommittee co-chair, Sen. Jonathan Dismang, R-Searcy, told lawmakers on Thursday that the three requests for state funds were held by a subcommittee on Tuesday because it was brought to his attention that a spouse of a lawmaker lobbied for the three entities that would receive state funding under these requests.
He said he wanted more information on the nature of the relationship between the spouse and the groups, and he hadn't received all of that information and the subcommittee would review the requests next month. He subsequently clarified that Catherine Johnson is a fundraising counsel and not a lobbyist.
State Department of Finance and Administration Secretary Larry Walther asked for council approval of the transfer of $5 million in restricted reserve funds to the state Department of Military for the Arkansas National Guard Foundation, which provides charitable and education support to members of the Arkansas National Guard, and their dependents and survivors, and to veterans and other charitable organizations that support veteran communities in Arkansas.
Hutchinson asked for council approval of a transfer of $750,000 in rainy-day funds to the state Department of Commerce's Arkansas Rehabilitation Services to support the World Services for the Blind in renovating its campus that will be used as a group home for the blind.
Walther asked for council approval of a new cash appropriation for the state Division of Heritage to disburse $250,000 from the attorney general's office to the Sultana Historical Preservation Society for the Sultana Disaster Museum in Marion.
In a letter dated Thursday to Legislative Council co-chair Sen. Terry Rice, R-Waldon, Mark Johnson said he would respectfully recuse from discussion and shall not vote or shall vote "present" on the funding requests for the Arkansas National Guard Foundation, the Sultana Disaster Museum and the World Services for the Blind "in order to ensure compliance of potential conflict of interest disclosures under Senate Rule 24," which is an ethics rules.
The Bureau of Legislative Research released the letter Friday.
Johnson said in a separate letter dated Friday to Dismang that he filed a letter dated Sept. 18, 2020, with Senate Secretary Ann Cornwell that discloses his potential conflict with any action related to Philander Smith College, World Services for the Blind and the Sultana Historical Preservation Society.
He said his wife's contract with the Arkansas National Guard Foundation is a 2022 agreement and "until Tuesday I did not know that they had a funding request pending with [the Legislative Council's Performance Evaluation and Expenditure Review Subcommittee]." Following the action of the subcommittee, he said he filed his letter with Rice.
"It is my opinion that there is no legitimate reason for the PEER Subcommittee to hold these items, in light of the information listed herein," Johnson said. "Therefore, I respectfully request that these items be released from any hold based on the information discussed therein and considered for funding by the PEER subcommittee on their merits."
Any entity seeking grant funding from the state should provide requested information to the relevant legislative committees, but "they should not have their legitimate requests delayed or held based on erroneous information," he wrote in his letter. "I believe that this is a correctable error, and respectfully request your cooperation in making such a correction."
Dismang said Friday that he hasn't had a chance to review Johnson's letter.
Sharon L. Giovinazzo, president and chief executive officer of the World Services for the Blind, said Friday that Catherine Johnson started working for the nonprofit group in January 2019 and she has been compensated a total of $349,000 for services.
"Catherine's rate is competitive with the others that I interviewed, especially for the experience that she brings to the table," she said. "She has always been a flat rate, and she has been paid from our operations, not from what was raised."
Giovinazzo said in a written statement Johnson would "Absolutely NOT!" be paid out of the $750,000 in state rainy-day funds sought for the World Services for the Blind. She said the group has substantially increased its fundraising with the assistance of Catherine Johnson.
According to records in the secretary of state's office, Catherine Johnson's agreement with the group's foundation refers to the reinstatement of the previous $8,500 monthly consulting fee, starting Sept. 1., 2021, until the campaign for the Group Home concludes.
Sultana Historical Preservation Society Board President John Fogleman of Marion said Catherine Johnson has worked as a fundraising counsel for the group since May 2020 and is paid $8,500 a month out of funds provided by the Marion Advertising and Promotion Commission.
The group aims to raise $13 million for the Sultana Disaster Museum, including $3 million for an endowment, and has raised $5.3 million so far, said Fogleman, who is a retired circuit judge.