ETHICS PANEL dismisses complaint on Rutledge campaign ad.

Campaign TV ad backers at issue

A complaint levied against the state’s new attorney general by a blogger during the campaign season was dismissed by the state ethics panel Friday.

After a probable cause hearing that was closed to the public, the Arkansas Ethics Commission voted to dismiss the complaint filed against Republican Leslie Rutledge by Matt Campbell, which claimed that Rutledge violated state campaign finance laws by appearing in an advertisement paid for by an outside organization and not reporting the ad as a contribution to her campaign.

Graham Sloan, the director of the commission, said the confidential nature of the hearing prohibited him from explaining the decision, but he said that a letter will be sent to the parties involved containing the commission’s findings.

While Campbell testified before the commission Friday, Rutledge did not attend. An attorney representing Rutledge, Kevin Crass, declined to speak with the Arkansas Democrat-Gazette.

Later Friday afternoon, Rutledge released a statement: “I am pleased with today’s decision from the Ethics Commission. From day one, my campaign proactively sought guidance from the commission. This matter can now be put to rest.”

Campbell called the commission’s decision disappointing, saying it set a bad precedent by allowing a candidate to appear in ads bought and paid for by outside groups so long as they are ads spotlighting issues.

“If [the commission’s reasoning is] just on face value, ‘Hey, what she did isn’t wrong,’ then here comes the cash,” Campbell said. “Unless there’s some sort of really narrow exception that they’re drawing on this one … otherwise, the [advertisement] is a road map to, here’s how you can get as much outside money and advertising as you want in your race.”

Campbell is a Little Rock attorney. On his Blue Hog Report, he exposed former Circuit Judge Michael Maggio as the author of contentious anonymous online posts; Maggio withdrew from a race for the state appeals court and was eventually removed from the bench.

In December 2013, the ethics commission fined former Republican Lt. Gov. Mark Darr for various ethics and campaign violations after a complaint filed by Campbell earlier that year. Darr eventually resigned.

Campbell filed his complaint with the ethics commission in early October over the TV ad, which featured Rutledge appearing on camera, vowing to continue fighting federal regulation.

The sponsors of the ad, the Republican Attorney Generals Association, paid more than $300,000 to air the ad, which suggested that viewers call Rutledge and tell her to continue her fight against Washington.

Many outside organizations paid for advertising during the past campaign season, but they didn’t feature the same level of involvement by the candidates; Rutledge participated in the filming of the ad.

Rutledge admitted to working with the outside organization, which is classified as a “527,” a type of tax-exempt political group that has been increasingly involved in campaigns since the early 2000s.

The group is named after Section 527 of the Internal Revenue Code and is not required to disclose its finances if its advertisements are “issue ads” that do not expressly advocate for or against a specific candidate.

Campbell argued that the ad was a “scheme designed to circumvent state law” for the purpose of furthering Rutledge’s candidacy.

Arkansas Code Annotated 7-6-203 bars contributions to candidates beyond $2,000 and prohibits candidates from taking money from a “prohibited” political action committee.

Although it is not defined as such in state law, Campbell argued that more than $300,000 spent on advertising that portrays a candidate in a positive light is akin to a contribution.

The association that paid for the ad was not registered with the Arkansas secretary of state’s office, which is required in Arkansas Code Annotated 7-6-215 for a group to contribute to a campaign.

Rutledge’s campaign said it consulted with the ethics commission before filing the ad and said an April 2006 advisory opinion from the ethics commission showed that Rutledge’s involvement in the ad was above board.

In that 2006 opinion, the commission found that an anti-abortion group could coordinate its ads with candidates and wouldn’t be subject to financial disclosure so long as there was “no express advocacy” for the candidate.

The opinion stated that independently financed advertisements that expressly urge Arkansans to vote for or against a candidate are subject to registration and reporting of their finances.

Ads that don’t use keywords such as “vote for” or “vote against,” the opinion stated, are considered “issue advocacy” ads, which are unregulated.

Campbell maintained that the Rutledge ad was different from the 2006 ad.

The previous ad “didn’t feature the candidate sitting down and reading a script that the group had written out for her with her own input,” Campbell said. “It’s sort of apples and oranges.”

Campbell said the ethics commission’s ruling could have a “huge” effect on future campaigns, since a single group can spend massive amounts of money.

“If you can get hundreds of thousands of dollars in TV ads, why go shake hands or do anything?”