Hathorn questions Halter's finance reports (UPDATE) | Arkansas Blog

Tuesday, April 25, 2006

Hathorn questions Halter's finance reports (UPDATE)

Posted By on Tue, Apr 25, 2006 at 3:13 PM

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Democratic lieutenant governor candidate Mike Hathorn just sent a letter to his opponent Bill Halter and "cc"d the Arkansas news media via email.

He is accusing Halter of campaign finance reporting irregularities:

Dear Bill:

As you know, I am committed to running a positive campaign focused on the issues of this race.  However, after reviewing your campaign financial disclosure reports, I have several serious concerns regarding the financial record keeping of your campaigns. Your public reports raise a number of questions, and seem to indicate that you have violated several provisions of the Arkansas Rules on Campaign Finance and Disclosure.

Transparency in Government and the public conduct of those who wish to serve the people as elected officials should be held in high regard. Rather than immediately filing official complaints with the State Ethics Commission, I want to extend you the opportunity to answer the following 18 questions regarding your campaign finances as a courtesy between candidates.

Hathorn goes on to say that if Halter doesn't answer his 18 questions within 24 hours, he will file official complaints with the Ethics Commission.

Read the 18 questions after the jump.

UPDATE: Here is the response from Bud Jackson, Halter's spokesman:

And the beat goes on.  What tomorrow, Mike Hathorn?  Bill Halter hates puppies?

If Mike Hathorn would like to file an ethics complaint rather than address the issues that Arkansans care about – such as making our schools excellent and building and attracting new jobs – then that is his business.

This is just another shameless, immature political publicity stunt being orchestrated by a desperate third-place candidate with a history of engaging in negative campaigning.  It is particularly ironic given that Mike Hathorn has already been formally reprimanded by the Ethics Commission.

We will not respond to Mike Hathorn’s desperate shenanigans.  Our financial disclosures are open to the public.

It is obvious to voters and the media that the closer we approach this election the more desperate Mike Hathorn grows.  Bill Halter will continue to run a positive campaign focusing on his plan to make our schools excellent while building and attracting the better-paying jobs of the 21st Century.

Mike Hathorn's Questions to Bill Halter

Mr. Halter, your exploration and brief pursuit of the Democratic Nomination for Governor of Arkansas coupled with your current bid for Lt. Governor have created what is quite possibly the most convoluted campaign finance record in the history of Arkansas’s politics. To date for the 2006 election cycle, you have solicited and received contributions for seven (7) different campaigns/committees, and they are:
1.) Halter for Arkansas (Governor) Primary Exploratory Committee
2.) Halter for Arkansas (Governor) General Exploratory Committee
3.) Halter for Arkansas (Governor) Primary Election Campaign
4.) Halter for Arkansas (Governor) General Election Campaign
5.) Halter for Arkansas (Lt. Governor) Primary Election Campaign
6.) Halter for Arkansas (Lt. Governor) Primary Election Run-Off Campaign
7.) Halter for Arkansas (Lt. Governor) General Election Campaign

Upon reviewing the numerous reports from the each of the above mentioned campaign entities a number of legal and ethical questions have emerged. I hereby request that you offer an explanation to the voters of Arkansas for each of the following:

1.) Arkansas Campaign Finance laws require candidates to maintain separate bank accounts for each separate entity that they use to solicit campaign funds. However, all of seven of your various entities have been called “Halter for Arkansas.” Have you in fact kept seven separate bank accounts to prevent illegal co-mingling of funds? Are you willing to provide the necessary documentation to show separate accounts have been maintained (including account numbers, cancelled checks, and account balance histories) for the duration of your campaigns?

2.) On 3/29/2006, you transferred $18,050.00 from the Halter for Arkansas (Governor) Primary election campaign account to your Lt. Governor primary campaign account. Does this not constitute a minimum of ten (10) violations of campaign finance laws, as the funds of at least ten donors to your Governor’s race are now in an account where they have/will be spent on your run for Lt. Governor? Is this not another instance of illegal co-mingling of campaign funds?

3.)  On March 20, 2006, having already repaid the $700,000.00 that you loaned yourself, you transferred the remaining balances of your Governor’s Exploratory Committees into your Governor’s Primary and General Campaign accounts, thus leaving a zero balance in your Exploratory Committees. Why did you pay yourself back, but not any of your other donors? Why did you continue to deposit funds in your Governor’s campaign accounts even though you were no longer seeking the office of Governor? Does this not violate Arkansas Campaign Finance Laws which require a candidate to refund any unspent funds within 30 days of the date when that candidate is no longer seeking the office for which the funds where solicited?

4.) On your final report for Halter for Arkansas (Governor) Primary Exploratory Committee filed March 30, 2006, you show non-itemized expenditures of $64,366.74 listed in the “other” category. Disclosure laws require that any expenditure over $100.00 be itemized. Did you really have $64,000 worth of expenditures all under $100.00? If so wouldn’t that be at least 644 separate expenditures over a 30 day period for an average of 21.5 non-itemized expenditures per day?  What were these expenditures for? Will you provide documentation to prove the legality of these expenditures?

5.) On February 6, 2006, you transferred $63,541.51 from Halter for Arkansas (Governor) General Exploratory Committee to Halter for Arkansas (Governor) Primary Campaign. Since each of the donors to your General Exploratory committee had previously given the maximum legal donation to your primary efforts, how do you justify this transfer? Does this not constitute a minimum of thirty-two (32) violations of Arkansas Campaign Finance limits?

6.) Did you pay for the domain purchase, creation, development, and operation of the websites: www.billhalter.com and www.halterforarkansas.com with funds donated to your run for Governor of Arkansas? Does the continued use of the same to advertise your race for Lt. Governor constitute an illegal and undocumented in-kind contribution to your Lt. Governor Primary Campaign? In short, isn’t your Lt. Governor’s race benefiting from money given to you to run for Governor?

7.) Your Lt. Governor Primary Campaign Expenditure report filed on April 17, 2006 shows that you first paid the firm of Murphy, Putnam, Schorr on March 10, 2006. However, at least two local media outlets received payments from the same media firm on 3/9/2006 for airtime on your behalf. Also, the production of your Lt. Governor’s TV Ads occurred before you switched races on March 9th. Did you incorrectly report the date on which you first paid the media firm? If not, is there an undocumented payment to the media firm that occurred before March 9th, or did they extend you a line of credit? Finally, when and from which account did you pay for the production of your Lt. Governor’s television advertisements?

8.) On March 20, 2006, you transferred $2,087.82 from your Lt. Governor Primary Campaign to the Halter for Arkansas (Governor) Primary Election Campaign. What was the purpose of this action, and does it not constitute an illegal co-mingling of campaign funds?  Since this occurred after you were no longer seeking the office of Governor, was this an illegal donation to your Governor’s campaign?

9.) On multiple occasions you have used campaign funds to make donations to churches including the AME and the Episcopal Lay Organization. These donations are a violation of Arkansas Campaign Finance Law Section 209(e) unless the candidate regularly attended these churches when he/she was not seeking election. Is this the case for you, or were the donations an illegal use of campaign funds?

10.) Arkansas Rules on Campaign Finance and Disclosure states in Section 224 that after a campaign has ended all assets must be disposed of at fair market value. Since your March 9th announcement that your campaigns for Governor had ended, have the assets of those campaigns been disposed of? If your Lt. Governor’s campaign has taken possession of said assets should there not be a record of their purchase from the Governor’s Campaign at fair market value? Doesn’t the lack of said documentation constitute a violation of Campaign Finance Rules?

11.) A review of the purchases of your Gubernatorial Exploratory Committees and Governor’s Primary Election Campaign show that the following assets, totaling $26,566.28, were acquired using funds raised for the Governor’s race. Where are these items now, and are they now or have they ever been used to promote your Lt. Governor’s campaign?
A.) Telephone Network  $1500.00
B.)  Halter for Arkansas Banner $298.75
C.)  Dell Computer(s)   $1996.62
D.)  Office Furniture   $300.00
E.)  Democrat Gazette Subscription $80.00
F.)  Halter for Arkansas Signs  $1563.28
G.)  Voter Activation Network $5000.00
H.)  NGP Software and Support $14500.00
I.)  Copy Machine   $1327.63

12.) On March 28, 2006, you reported the transfer of $111,525.00 from the Halter for Arkansas (Governor) Primary Election Campaign to the Halter for Arkansas (Governor) General Election Campaign. Is this not another example of illegal co-mingling of campaign funds? Furthermore, is it legal for this transfer to be made 19 days after you were no longer seeking the office of Governor?

13.) On March 8, 2006 the Halter for Arkansas (Governor) Primary Exploratory Committee refunded the $700,000 that you had loaned to the race. However, the report filed for that Committee on March 30, 2006 showed $0.00 for the expenditure category “repayment of loans,” and reports $700,000 of outstanding campaign debts. Did you pay yourself back, and if so is it not illegal to continue to report a campaign debt?

14.)  On March 4, 2006, you paid $2,000 rent for the month of March. Since you then switched races on March 9th, shouldn’t your Lt. Governor’s campaign have paid for the space from that point forward? Wouldn’t the failure to do so constitute an undocumented in-kind donation of $1419.35 worth of office space to your Lt. Governor Primary Campaign?

15.)  Why did you loan your Governor’s Primary Exploratory Committee $100,000 on March 1, 2006, several weeks after you had formed a Governor’s Primary Election Campaign account? Shouldn’t you have ceased raising money for the exploratory committees immediately upon the formation of actual campaign accounts?

16.)  Why did you continue to spend funds for non-preexisting debts from the Halter for Arkansas (Governor) Primary Election Campaign after you announced that you were no longer seeking the office of Governor? Specifically, were the expenses categorized as travel, office supplies, and paid workers that were made after March 9th legal expenditures for the Governor’s race, or were they expenditures that should have been paid from the Lt. Governor’s Primary Account?

17.)  On several occasions your campaign has distributed a brochure, designed to double as a piece of direct mail, which promotes your Lt. Governor campaign. The disclaimer only says, “Paid for by Halter for Arkansas.” However, your March report for Halter for Arkansas (Lt. Governor) Primary Election Campaign shows no expenditure for direct mail or brochures. When were these pieces paid for? From which account were the funds taken?  Furthermore, noting the number of entities with the name, “Halter for Arkansas,” shouldn’t your disclosure be more specific in order to comply with the spirit of the law?

18.) Your Governor’s Primary Election Campaign continued to accept donations well after you officially withdrew from the Governor’s race.  From 3/17/2006, to 3/22/2006, reports show that the Halter for Arkansas (Governor) Primary Election Campaign received $14,050.00 in contributions from 11 donors. Shouldn’t you have returned the checks rather than cashing them? Is it not illegal to accept campaign contributions for an office that you are not seeking?

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