"The bottom line is this is pretty lousy bookkeeping."
The speaker was Candi Russell of Fort Smith, a member of the state Ethics Commission, as it reviewed staff findings on Lt. Gov. Mike Huckabee's fund-raising in the months after his November 1994 re-election.
Russell's comment was significant. A one-time Huckabee campaign worker, she joined in two 5-0 commission votes that effectively sent the message that Huckabee had not complied with campaign finance laws. Joining in the vote was Rita Looney, a Little Rock lawyer and Huckabee appointee to the commission, a circumstance that deprived Huckabee of the argument that he was a victim of Democratic partisans.
Because no formal investigation had been undertaken, commission rules precluded a vote on a formal finding of a law violation. But the commission issued two advisory opinions: 1) that Huckabee's finance reports were "incorrect"--full of errors and misstatements; and 2) that he had raised an unreasonable amount, $91,000, to pay a campaign debt that proved to be only about $17,000. Such an effort was hardly necessary. The review showed Huckabee spent only about $1,000 on two fund-raisers, one by the campaign and one by the soft drink industry, that raised far more than necessary to retire the debt, about $40,000.
The law says candidates who end campaigns with debt may raise money "solely" to retire the debt. A commission opinion allows candidates to spend "reasonable" amounts toward administrative costs of debt retirement.
The commission's decision that Huckabee stepped over the line was a political setback for a fiscal conservative who expects to be the Republican nominee for U.S. Senate this year.
The outcome was also embarrassing on account of Huckabee's earlier pronouncements. In a campaign letter, he had bitterly criticized "junkyard journalists" who raised questions about his campaign reports. That letter said that his campaign finance disclosures were more extensive than any candidate's. He and his staff had repeatedly told reporters that he had receipts to support all his expenses (they didn't). He also had told the Ethics Commission that he "firmly believed" all funds had been raised, spent and reported legally. The Ethics Commission firmly disagreed.
Huckabee, who had asked the commission to look into his records as a way to combat negative media attention, wasn't wholly cooperative in the investigation. The Ethics Commission was unable to photocopy his records. Staff members were able to take only hand-written notes, a process that effectively stymied prolonged study.
A nine-hour review of the records by commission staff turned up embarrassment enough.
Huckabee charged his campaign $1,500 in 1995 for a trip to Hawaii in 1994. He says the trip, to make a speech in support of another Republican candidate, was supposed to be reimbursed, but he never got the money. It produced nothing in the way of money for debt retirement, in any case.
He charged in 1995, as a 1994 campaign expense, $2,000 for an August trip by him and campaign aide Brenda Turner to Washington. The trip, undertaken in part to explore his Senate prospects and in part to talk to political consultant Dick Morris, also produced no direct 1994 campaign contributions, other than forgiveness of a debt to Morris, which seemingly could have been obtained by telephone.
The Ethics Commission also found that Huckabee used money ostensibly raised to pay off 1994 debt to make trips around Arkansas in early 1995, during the time the Arkansas legislature was in session. This is a time when campaign fund-raising is prohibited by law. Huckabee said he needed to make such appearances, often at Republican Party dinners, to keep up good public relations with people who might give him money later.
Also during the legislative session, Huckabee kept Brenda Turner employed full-time to run a political office in Texarkana, ultimately paying her more than $10,000 for the work. She told investigators that no more than 50 percent of her time could be said to be directly related to retiring campaign debt, the rest was spent on political work such as scheduling Huckabee speaking appearances.
The investigation also found that a reported $4,166 reimbursement of "candidate" expenses in 1995 actually was a cash payment to reimburse his wife, Janet, for miles driven during the 1994, at a rate of 30 cents a mile.
"I'd drive around all day for 30 cents a mile. I'll start right now," said Commissioner Troy Burris. Commissioners Eugene Hunt and Norton Wilson also criticized the rate ("ridiculous" and "unreasonable" were Wilson's words).
It marks the third time the Huckabee family has drawn cash from campaign funds, a legal though politically problematic practice. In his 1992 campaign for Senate, he paid himself, through a personal communications company, for campaign work. In his 1993 race for lieutenant governor, he paid his wife a salary.
Huckabee's attorney, Frank Arey of Conway, had hoped to make the case that Huckabee had operated no differently than other candidates. But the Commission staff investigation found otherwise. Only Gov. Jim Guy Tucker among state-wide officials carries a continuing campaign debt of any size, and he has spent a relatively small amount on postage and temporary workers.
To a degree, Huckabee was a victim of the newfound strength of the Ethics Commission. There have undoubtedly been sloppy campaign record-keepers before him. But the Commission now has a full-time staff attorney and investigator. Huckabee is the first major candidate to draw in-depth examination.
Huckabee has argued that the law doesn't provide specific guidance for what constitutes a reasonable amount to spend in administrative costs to retire debt.
Commissioner Troy Burris said that spending more than about 20 percent of campaign contributions on administrative costs was excessive. Huckabee spent more than 80 percent.
The commission decided, for the time being, to follow a common-sense approach: They know unreasonable spending when they see it.
A sidelight of the Mike Huckabee campaign's day before the state Ethics Commission last week was a tidbit about Dick Morris, the Connecticut political consultant. Morris has been described as something of a political soul mate of Huckabee, a Republican, but is working now as a consultant to a Democrat, President Clinton.
Morris worked for Huckabee in the 1994 campaign and, it developed, he forgave a debt of more than $15,000 to Huckabee in August 1995, which was one of the ways Huckabee eventually balanced his campaign books.
The Ethics Commission staff said they had been told Morris forgave the debt for "political" reasons. Frank Arey, Huckabee's attorney, explained that Morris had said "he could make more money working for President Clinton" and didn't want to have to report receiving money from a Republican candidate in 1995.
The financial contribution limit in Arkansas is $1,000 per election, but Arey said in-kind contributions in excess of that limit were legal under a provision of the law allowing voluntary contributions of personal services.
Political expense account
The Ethics Commission investigation of Lt. Gov. Mike Huckabee, in concert with office records obtained under the state Freedom of Information Act, shows he used campaign money for prohibited purposes.
For example, a summary of the Ethics Commission findings showed that Huckabee claimed $1,573 in travel expenses in June and July of 1995. Under state law, money raised post-election was supposed to be used "solely" to retire debt from the 1994 campaign.
But Huckabee's office calendar, obtained by the Times under the FOI, shows $404 of the travel money paid to fly Huckabee to the Pink Tomato Festival in Warren.
Subsequent charges to the campaign for July 4-13 covered Huckabee's travels to the Piggott July 4th picnic, the Pangburn July 4th parade and an appearance at Arkansas Governor's School in Conway, among other typical public appearances.
Huckabee contends that because these appearances were political--"maintaining constituent contact" was how he described it to the Ethics Commission--they should be reimbursable even if they were only vaguely related to campaign fund-raising. The Ethics Commission indicated it wasn't inclined to open the door to such practices.
Print headline: "Huckabee gets a bipartisan scolding" February 9, 1996.