UPDATE: Lobbyist's $30,000 loan to legislator unreported for five months | Arkansas Blog

Saturday, October 24, 2015

UPDATE: Lobbyist's $30,000 loan to legislator unreported for five months

Posted By on Sat, Oct 24, 2015 at 7:48 AM

click to enlarge NO DISCLOSURE: A page from Bruce Hawkins' lobbyist activity disclosure statement a month after he'd made a $30,000 loan to Jake Files. Hawkins made a similar declaration in July.
  • NO DISCLOSURE: A page from Bruce Hawkins' lobbyist activity disclosure statement a month after he'd made a $30,000 loan to Jake Files. Hawkins made a similar declaration in July.

JAKE FILES: State liens raise questions about his assertion that he could have gotten loan from bank as well as a lobbyist.
  • JAKE FILES: State liens raise questions about his assertion that he could have gotten loan from bank as well as a lobbyist.
Michael Wickline of the Arkansas Democrat-Gazette dug up new information in the story the Arkansas Blog broke last week abut a $30,000 loan by lobbyist Bruce Hawkins to Sen. Jake Files of Fort Smith.

Wickline reports that $3,800 in liens had been filed against Files' business. They seem to be in the process of being worked out. Fine. He's not the first state legislator who fell behind required payroll withholdings.

But .....  the news contributes to some big questions that require Ethics Commission investigation::

* CREDITWORTHiNESS: Was Files telling the whole truth when he told me that he could have obtained that loan for one of his real estate ventures from a bank? He said "somebody" had suggested Hawkins as a good source. The loan was paid back just last week, coincident with the loan's disclosure. The state of Files' finances seems shaky. No law in Arkansas prohibits loans by lobbyists (suddenly a variety of public officials tell Wickline that such a prohibition might be a good idea) if they are up and up. That is, a loan should charge proper interest, get repaid and so forth. But is not extension of credit by a lobbyist to someone who otherwise can't qualify for conventional lending a gift of tangible value? A gift that might prevent, say, foreclosure on a property is very valuable indeed. We don't know the details of the Files situation. But you can see the peril of ill appearances in such lending. Never mind if a legislator with financial troubles and every good intention to pay a lobbyist back can't do it. Then that loan becomes a whopping illegal gift. So the base question: Is a lobbyist loan to a legislator who can't otherwise obtain credit ethical? The Ethics Commission could find out, too, if Files made regular payments on the Hawkins loan. Was it truly conventional and did he make full repayment with interest?

* WHY NOW? This is the more intriguing question. Why was it only in the last two weeks or so that Hawkins sought advice from the Ethics Commission on proper reporting of a loan to a legislator.?

The loan was made April 20. It wasn't reported until Hawkins' Oct. 15 lobbyist activity report. Two previous activity reports passed without mention of the loan — in July and June. Hawkins  said on those forms he'd made no loans. An image of one statement is shown above.

I can't help but wonder if news about Files' financial situation was leaking out and Hawkins and Files set about squaring the records when exposure seemed possible. An Ethics Commission investigation of Hawkins' failure to report this loan sooner seems in order.

I've sent a question to Hawkins about the October reporting and the Files repayment plan and timing.

UPDATE: Hawkins' e-mail response:

Regarding your email of 7:30 am today.

1. Why was it not reported earlier? Answer: I was wrapping up from session activities and business and failed to convey to those preparing my report. Once discovered, we amended, or as you stated, ” I noted belatedly” J

2. Did Jake make regular payments on the loan, or repay lump sum? Answer: Lump sum, checks dated 10/14/15. Interest $439.01, principle $30,000.

Next time, please give me the opportunity to respond before printing your article. Your email was at 7:29 am and the article appeared at 7:52am.

Bruce


(I think the Jon Woods' "ethics law" correction that gave lawmakers a mulligan on ethics violations by being able to invoke an oversight defense applies only to legislators. Noted, the legislature adjourned two days after Hawkins made his loan to Files. He was able to file reports in June and July that declared he had made no loans. Oct. 15, he declared the loan.

* LARGER QUESTIONS
: Suddenly several, though not all, Republican leaders tell Wickline maybe the law ought to prevent such loans.  Well, sure. Easy to say now.

There's so much more deficient in our ethics laws. When lobbyists can wash tobacco and nursing home money through a political organization to put $120,000 in the pockets of the Senate president pro tem (Michael Lamoureux) and both the source of the money and the lawmaker's receipt of it can be secret, the law is meaningless.

When legislators can set themselves up as "consultants" — despite no record of gainful employment in businesses in which they have expertise to consult, except passing legislation — and draw untold sums from anonymous sources, the law is meaningless.

When a lobbyist can round up money to fete legislative leaders in private dinners, the law is meaningless.

When lobbyists can feed and water legislators every day and follow them to out-of-town conventions and feed them without disclosing who's being fed, the law is meaningless.

When there's no reporting requirement for legislators on financial ties to people affected by legislation they debate, the law is meaningless.

When lobbyists like Hawkins and others can create multiple PACs to create a  dodge around PAC contribution limits and then use those PACs to continue a flow of corporate dollars to legislators, the law is meaningless.

When special interests can buy judicial elections with attack advertising financed anonymously, the law is meaningless.

And that's just a start.

When Republicans were in the minority, and Democrats were primary beneficiaries of some of these shenanigans, I urged the GOP repeatedly to become the party of ethics. It seemed a great campaign tool against the entrenched powers. It never happened and I think from current events you can see why. They control the trough now.  Gov. Asa Hutchinson's ringing defense of Lamoureux — whose supposed consulting toil was aimed primarily at electing the right kinds of Republicans to control the Senate — indicates what kind of ethics to expect from this administration. Spoils is a good word in the context.

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