The Legislative Council on Thursday delayed action on requests by Gov. Asa Hutchinson's administration to transfer $5 million in state restricted reserve funds to the Arkansas National Guard Foundation and $750,000 in state rainy-day funds to support the World Services for the Blind, and to grant spending authority to allow the attorney general to donate $250,000 in lawsuit settlement proceeds to the Sultana Historical Preservation Society.
The council's decision came after Sen. Mark Johnson, R-Ferndale, told lawmakers that his wife, Catherine Johnson, is a registered fundraising counsel who advises the three groups on their fundraising, and he filed a disclosure about his potential conflict of interest prior to the council meeting.
The council's Performance Evaluation and Expenditure Review Subcommittee on Tuesday recommended the council hold on to the three requests from the Hutchinson administration.
State Department of Finance and Administration Secretary Larry Walther asked the subcommittee in a letter to approve the transfer of $5 million in restricted reserve funds to the state Department of Military for the Arkansas National Guard Foundation. The mission of the foundation is to provide charitable and education support to members of the Arkansas National Guard and their dependents and survivors, and to veterans and other charitable organizations that support veteran communities in Arkansas, Walther said.
Hutchinson asked the panel in a letter to approve transferring $750,000 in rainy-day funds to the state Department of Commerce's Arkansas Rehabilitation Services to support the World Services for the Blind in renovating its campus. The campus will be used as a group home for the blind, the governor wrote.
Walther asked the panel in a letter to grant a new cash appropriation for the state Division of Heritage to disburse $250,000 from the attorney general's office to the Sultana Historical Preservation Society for the Sultana Disaster Museum in Marion.
Rep. Mark Lowery, R-Maumelle, on Thursday made a motion for the Legislative Council to approve the three requests for state funding rather than having the subcommittee review the requests next month. He said these groups are waiting to receive state funding.
But a subcommittee co-chair, Sen. Jonathan Dismang, R-Searcy, said the three requests for state funds were held by the subcommittee on Tuesday because it was brought to his attention that a spouse of a lawmaker lobbied for the three entities that would receive state funding under these requests.
He said he wanted more information on the nature of the relationship between the spouse and the groups, and he hasn't received all of that information.
Dismang subsequently clarified that Catherine Johnson is a fundraising counsel and not a lobbyist.
Sen. Joyce Elliott, D-Little Rock, said she can assure lawmakers that the World Services for the Blind desperately needs the state assistance and trains people for skilled jobs in the state.
Dismang said Catherine Johnson's fundraising relationship with the three entities seeking state funds wasn't disclosed to the Legislative Council's Performance Evaluation and Expenditure Review Subcommittee, and it's important for the public to know there is transparency.
It would be improper for the council to vote on these three requests for state funding on Thursday because the three entities that would get the state funding aren't on hand to testify to the council about their plans, he said.
But Sen. Jason Rapert said many state lawmakers are aware of Catherine Johnson's fundraising activities.
Dismang said he isn't suggesting that the three entities seeking state funding, Sen. Mark Johnson or Catherine Johnson did anything improper.
"It is all about transparency," he said.
Senate President Pro Tempore Jimmy Hickey, R-Texarkana, said he agreed with Dismang's plan for the subcommittee to review the three requests for state funding next month to allow lawmakers to do their due diligence and provide transparency. House leadership was apprised of that, he said.
Rep. Lane Jean, R-Magnolia, questioned whether any of the requested state funds would go to pay a fee to Catherine Johnson. Lowery subsequently withdrew his motion for the council to approve the three requests for state funds on Thursday.
Johnson said he has recused and declined to participate in legislative discussions of legislation in several instances in the past and disclosed a potential conflict of interest because of a family member's work.
He said his wife is a fundraising counsel registered with the secretary of state's office and is paid a monthly flat fee and not a bonus or commission.
"She won't get any of this money herself," Johnson said.
Johnson said he is not a member of the Performance Evaluation and Expenditure Review Subcommittee and he filed his disclosure about his potential conflict of interest on Thursday morning because he became aware the council would consider these three requests for state funds.
In other action, the Legislative Council approved several other requests for one-time state funds, including the transfer of:
• $15 million in restricted reserve funds to the state Department of Veterans Affairs to match federal funds for constructing a new state veterans home in Fayetteville. The $15 million represents 35% of the projected total cost of $42.8 million for the new veterans home, and the department has applied to the U.S. Department of Veterans Affairs for grant funding for the remaining 65% of the cost of the project, said Nathaniel Todd, secretary of the state Department of Veterans Affairs.
• $10 million in restricted reserve funds to the state Department of Public Safety to provide grants to law enforcement entities throughout the state through the public safety equipment grant program.
• $3 million in restricted reserve funds to the state Department of Human Services' Division of Aging, Adult and Behavioral Services to assist senior citizen centers in their mission of providing a comprehensive and coordinated services system for people 60 and older. The funds will be used to cover operating costs of the senior citizen centers, recognizing the hardship that the continued public health emergency has placed on their revenues, said department Secretary Cindy Gillespie.
• $1.5 million in restricted reserve funds to the state Economic Development Commission for a grant to the Museum of Discovery for renovation after the February 2021 flooding.
• $1 million in restricted reserve funds to the state Department of Finance and Administration to disburse funds to the Hope Cancer Resource Center of Northwest Arkansas to establish an endowment to assist with cancer support services for patients and families in Benton, Carroll, Madison and Washington counties.
• $1 million in restricted reserve funds to the state Economic Development Commission for a grant to the Arkansas Alliance of Boys and Girls Clubs for organizational projects.