The Arkansas news of late has been full of details about former Senator Jeremy Hutchinson’s alleged misuse of campaign funds, much of it for the benefit of a girlfriend.
Last year state Senator Jeremy Hutchinson, nephew of Governor Asa Hutchinson, was indicted by federal prosecutors for wire and tax fraud. He then resigned from office.
It is alleged he illegally diverted campaign funds to personal use. His former girlfriend, Julie McGee, has been on the stand detailing campaign money he spent on her, supposedly even for an abortion.
In recent weeks the focus of his defense has been to suppress evidence used by federal prosecutors and to try to get the charges dropped. Much of the evidence was records and messages found on a Sony laptop. He claims the government should not be able to use the evidence because the evidence was gained improperly. He says the laptop was his and was stolen by McGee. McGee claims it was her laptop.
The Hutchinson situation is not the first time the Arkansas Senate has been embarrassed by having one of its members charged with illegally taking campaign funds for personal use. In 2016 former State Senator Paul Bookout was sentenced to eighteen months in prison on charges of felony mail fraud. Bookout took more than $150,000 in campaign funds and converted it to personal use.
THAT BRINGS US TO EARLY 2019 when legislation was filed in response to the indictments. Act 879 of 2019 was sold as increasing the penalty for taking campaign funds as personal income. But the primary purpose of the legislation was something else and wasn’t mentioned in the title of the legislation. The primary purpose was to give elected officials a way to grab campaign donations for their use. The legislation created a broad category of expenditures called “officeholder activities” that up until now would have been a prohibited personal use.
The bill was sponsored by two Democrats, Senators Will Bond and Keith Ingram, and two Republicans, Senators Bart Hester and Jim Hendren. Jim Hendren is the cousin of Jeremy Hutchinson and also a nephew of Governor Hutchinson.
The legislation created a LEFT POCKET – RIGHT POCKET distinction on whether personal use of campaign funds is allowable or illegal.
It made it LEGAL for a politician who gets elected to grab the campaign funds as long as the politician stuffs the money in his RIGHT POCKET and uses it for “officeholder activities.” Most other diversions of campaign funds would be LEFT POCKET expenditures and still prohibited.
“Officeholder activities” is an ill-defined term that broadly allows campaign fund diversion if it is something an officeholder might claim as being due to their activities as an office holder.
Originally the legislation included specific examples of what was prohibited and what was allowed, such as allowing a member of the Arkansas General Assembly to use campaign funds for an apartment to use when at the Capitol.[i] But, after Conduit For Action criticized this grab fest the lead sponsor amended the legislation to take out the specific authorizations and specific prohibitions and left this fuzzy language:
(ii) Candidates or officeholders may use campaign funds or carryover funds to fulfill any commitment, obligation, or expense authorized by law, or permitted by an Arkansas Ethics Commission rule or opinion at the time of the expenditure, or reasonably and legitimately related to a campaign or officeholder activity.
The Arkansas Ethics Commission has five members, one each appointed by the Governor, Attorney General, Lieutenant Governor, Speaker of the House of Representatives, and President Pro Tempore of the Senate. Do you think the Ethics Commission might look favorably on a broad interpretation of this grab fest?
What would an expenditure of campaign funds for officeholder activities have been before this new law? An illegal personal use.
If this new law had been around when Senators Bookout and Hutchinson were in office they could have diverted just as much money from their campaign funds while avoiding any legal problem by just putting the money in their RIGHT POCKET and spending the money for items falling under the fuzzy term “officeholder activities” instead of putting the money in their LEFT POCKET and using the money for other personal uses.
It is interesting that some members of the General Assembly receive so much in campaign money that they are looking for creative ways to spend it….. but not go to jail.
To put this legislation in context, consider this statement made by Senator Jim Hendren to open this year’s legislative session:
The culture of greed and corruption is over. We will not participate in it. We will not ignore it, and we will not tolerate those who do.
Then Hendren cosponsored the new LEFT POCKET – RIGHT POCKET LAW to grab the money.
What the bill did was change the grabbing campaign funds from a “culture of greed and corruption” to “a culture of greed without jail.” But the new law came too late for cousin Jeremy. He still is hoping the evidence will be excluded.
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Do you think a politician who wins the election should be able to convert campaign contributions for personal use as long as the expenditures can be classified as “officeholder expenses”?
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Is there really any difference whether the politician puts the campaign money in his LEFT POCKET or RIGHT POCKET?
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Here is something else you need to think about. Our Arkansas ethics law was passed by an initiated act proposed and passed by the people, after the legislature failed to pass ethics legislation. After the people passed the ethics law they also initiated and passed a law creating the Arkansas Ethics Commission. The most important avenue to get better ethics laws has been through proposals submitted by the people, not laws passed by the legislature. Now the legislature is proposing changes in the constitution to make it HARDER for the people to propose an initiated law. See the description of the legislature’s proposed constitutional amendment on Ballotpedia.
[i] Original version of the bill with specific examples of items allowed and prohibited ftp://www.arkleg.state.ar.us/bills/2019R/Public/sb258/SB258020420191630.pdf
Reposted from Conduit for Action
