Arkansas voters surprised almost everyone Nov. 4 when they endorsed a constitutional amendment that bars state political candidates from accepting campaign money from corporations.
Ballot Issue No. 3, which took effect Nov. 5, listed donor groups that can legally give to campaigns, including political parties, political action committees and any individual person.
No longer permissible are gifts from corporations, unions, trade associations and other groups that have been mainstream political donors in Arkansas for decades.
At stake are millions in campaign contributions, an Arkansas Democrat-Gazette review found.
If Ballot Issue 3 had been in place at the start of the state's 2014 gubernatorial campaign, for example, it would have erased about 30 percent of donations -- or more than $2.7 million -- from the campaign treasuries of Republican Gov.-elect Asa Hutchinson and his strongest opponent, Democrat and former U.S. Rep. Mike Ross.
That $2.7 million is far from the actual total because it doesn't include the candidates' final stretch of fundraising this fall.
Meanwhile, political candidates already see their wallets shrinking.
"Some lawmakers have received corporate campaign checks in the mail since [Nov. 5] and told me they had to return them because the new law had passed," said state Sen. Jon Woods, R-Springdale, one of Issue 3's sponsors.
Arkansas State Chamber of Commerce President Randy Zook expects "it will be tougher for individual candidates to round up the money they need to get their campaign messages out."
He sees the biggest effect in local races.
"If you're running for sheriff, a local business is typically a reliable place to raise money. Not a big check, but maybe $500," Zook said.
Arkansas Ethics Commission Director Graham Sloan, whose office oversees election ethics, said his phone started ringing hours after the Nov. 4 general election.
"Calls? I've gotten dozens and dozens relating to Ballot Issue 3," Sloan said last week. "I don't know, it's into the hundreds. But I've had very heavy phone traffic starting on Nov. 5."
Advocates who backed the ballot measure are pleased.
One goal was to stop "certain individuals from amassing great influence through multiple contributions from corporate entities he or she may control," said state Rep. Warwick Sabin, D-Little Rock, a Ballot Issue 3 sponsor.
"I think that most observers of the political process are concerned that corporations are dictating our public policy through their ability to direct lots of money toward political candidates," Sabin said. "The original intent of our democracy was for every citizen to have one vote and every citizen's vote to be counted equally."
The ballot issue also banned gifts from lobbyists, lengthened term limits for legislators and created a citizens commission to set elected officials' salaries.
Some large corporate donors, such as Little Rock lawyer and business operator Graham Catlett, aren't complaining about the corporate gift ban.
"I think it's a good idea," said Catlett, who donated at least $20,000 to Ross' campaign through family members and his companies. He backs full disclosure of campaign donors and their agendas, he said.
"I'm sure there are some creative people who will find ways around the rule ... but I hope not," Catlett said. "I certainly can't give through any of my companies anymore. It may cause me to persuade my friends to make more contributions. They'll love to hear that."
'Original intent'
Arkansas law limits any individual to giving $2,000 per candidate, per election.
In the governor's race, Hutchinson and Ross weathered a May primary vote and the November general election. So an individual would be limited to donating $4,000 to either of them. But before Nov. 5, Arkansas, unlike the federal government and some other states, also permitted corporate donations.
Corporate contributions helped allow developer Gary Gibbs of Franklin, Tenn., donate more than $71,000 to Ross. He gave with family members, business co-workers and principally through at least 18 corporations that he controls, a Democrat-Gazette analysis found. Gibbs has declined to be interviewed about his campaign donations.
Two Arkansas nursing home ownership groups -- Reliance Health Care of Conway under President Brandon Adams and nursing home owner Michael Morton of Fort Smith -- gave at least $40,000 each to Ross, mostly through their individual nursing home businesses. They also have declined to be interviewed.
Ronald Cameron of Little Rock, Mountaire poultry brands executive, was linked to at least $25,000 in gifts to Hutchinson. That included contributions from at least four corporations.
Hutchinson, who won the governor's contest with 55 percent of votes, reported raising more than $1 million in donations that apparently came from corporations, trade groups, candidates' campaigns and other donors that are no longer permitted to give, the Democrat-Gazette's analysis found.
Those gifts made up 28 percent of Hutchinson's donations -- more than $1 in every $4 raised.
"Whatever the laws are, campaigns must abide by them," Hutchinson spokesman J.R. Davis said in a Friday email. "Going forward, all campaigns will have to review these new laws and see how it will affect them in the future."
Ross reported more corporate dollars and a higher percentage of company donations. The Democrat's campaign raised at least $1.7 million from corporations and other groups, the newspaper's review found. That was 32 percent of his total, or almost $1 in every $3.
A Ross campaign spokesman didn't return phone calls or emails late last week.
'Looking hard now'
"I was the most surprised person in the world that it passed," said Little Rock lawyer David Couch, part of the Regnat Populus citizens group that initially hatched the Ballot Issue 3 changes.
Some polls before the general election showed that the measure had less than 30 percent voter approval, he said.
The citizens group formed in 2011, naming itself after the state's Latin motto, which translates as "The People Rule." Couch says members first wrote their proposed changes for campaign finance and lobbyist gifts in 2012. They failed to collect enough petition signatures to get on the ballot that year.
In 2013, Sabin introduced the measures in legislative bills. They lay dormant in committee. Then, Couch says, Republicans approached with an idea. The result was to add measures that were more appealing to legislators, such as lengthening term limits and setting up a salary commission that could potentially raise state officials' pay, he said.
Couch said he wasn't bothered by the additions. After that, legislators approved Ballot Issue 3 to appear on the Nov. 4 ballot.
By summer, a national term-limits support group actively campaigned against the measure. Critics said its ballot name was purposely confusing, saying it "set" term limits, when actually the measure lengthened existing term limits. Little organized support emerged. Then voters approved it by 52 percent.
"I don't think anyone had really looked at Issue 3" before the Nov. 4 general election, Couch said.
"They're looking really hard now."
Lingering questions
What happens next? Will corporations, for example, set up hundreds of new political action committees and donate through them?
Those are among questions candidates, corporate donors and state elections regulators face.
"I think you'll see the formation of a lot of PACs," said the State Chamber of Commerce's Zook. "A lot more people will try to or will form PACs. ... But it's problematic. That's a lot of paperwork and a lot of hassle."
Issue 3's passage is "going to discourage corporate contributions, corporate expression. Political folks may be surprised at the impact it has," Zook said.
The ballot issue's authors say they're ready to fight new ways that corporations find to give campaign money.
"Everybody is concerned [corporations] are going to use PACs to get around that. If they do, we'll stop that in 2016," said Regnat Populus' Couch.
Meanwhile, no state official has stepped forward to resolve the campaign finance questions.
The ethics commission's Sloan says his group doesn't have authority to oversee constitutional prohibitions. The Legislature will have to grant that authority, and lawmakers don't go into session until January.
Another possibility is a court challenge.
"With as much uncertainty as there's been around campaign finance law federally, I think we reasonably expected some kind of challenge to one or more provisions," Sabin said.
That's one reason the ballot issue includes a "severability clause" -- if one or more sections are struck down by the courts, it won't affect the other provisions, Sabin said.
Whatever the outcome, Couch says Issue 3's passage has already proved one point.
"It means citizens can have an idea, and can try, and even if they don't succeed, they influence policy to the extent it gets passed," said Couch.
"If you have an idea, try."
SundayMonday on 11/16/2014