Lectern audit finds possible law violations
Sanders’ office maintains $19,000 purchase was legal
Arkansas legislative auditors concluded in a report released Monday that Gov. Sarah Huckabee Sanders’ office potentially violated several laws on budgeting, accounting, purchasing and tampering with public records related to the office’s purchase of a $19,000 lectern and travel case.
Sanders’ office disagreed with the auditors’ conclusions, saying the governor’s office did not violate any state laws.
The lectern purchase has been the center of controversy and speculation since it was revealed the governor’s office paid $18,475 for the lectern and traveling case and was charged an additional 3% credit processing fee of $554.25.
Legislative auditors forwarded the report to the 6th Judicial District prosecuting attorney and the Arkansas attorney general’s office. Prosecuting Attorney Will Jones’ office confirmed in an emailed statement that it had received a copy of the report.
“Prosecutors will review the audit, which is standard operating procedure,” Jones’ office said in the email. “It’s important to note that this review is no different than any other file review sent by an investigating authority to the Prosecuting Attorney.”
The Legislative Joint Auditing Committee will meet at 2 p.m. today to discuss the report and ask auditors questions.
Matt Campbell, a Little Rock attorney and author of the Blue Hog Report blog, first reported the lectern’s purchase, posting the invoice on X, formerly known as Twitter. Campbell’s post prompted state Sen. Jimmy Hickey, R-Texarkana, to request an audit of the lectern purchase.
The governor’s office purchased the lectern in June with the Republican Party of Arkansas reimbursing the state in September, something that auditors found was not originally the plan. Instead, auditors said the governor’s staff altered an invoice for the lectern, handwriting “To be Reimbursed” after news of the lectern’s purchase had become public and prompted questions. The report stated “there was no indication the Governor’s office was seeking reimbursement for the cost of the podium and road case.”
Tom Mars, an attorney from Rogers, said he represents a client with firsthand knowledge of the governor’s office’s altering of the invoice. In a statement Monday, Mars said “no one from Arkansas could be happy about what’s spelled out in the audit report.”
“In my opinion, the report
just confirms people’s worst fears about the dishonesty of the Governor and members of her staff who appear to have participated in a transaction that any intelligent, objective observer would describe as ‘fraud,’” said Mars, a former director of Arkansas State Police and personal attorney for former Gov. Mike Huckabee, Sanders’ father. “That said, it’s a sad day for Arkansans who care about truth and integrity in government and don’t believe in making exceptions for politicians from either party.”
Auditors also said Sanders likely did not comply with Arkansas law on the distribution of state property when relinquishing the lectern to the Republican Party of Arkansas. Since the governor’s office did not comply with the law on the distribution of state property, “(Arkansas Legislative Audit) maintains that the podium and road case remain state property,” according to the report.
The office’s decision to pay for the lectern in advance also may have violated state law, and the Department of Transformation and Shared Services was not notified of its delivery, possibly counteracting another state law, according to the report. A member of the governor’s staff also shredded a bill of lading for the lectern, possibly going against state law on properly retaining public documents. The governor’s office said it “immediately procured a replacement copy” after the bill of lading was shredded.
Sanders’ office also requested an increase appropriation of $447,245 for computer equipment maintenance services, which was used to purchase the lectern.
THE LECTERN
The invoice for the lectern was for a 39-inch custom Falcon Podium and travel case. Auditors said they could not determine the reasonableness of the lectern’s price due to its custom build that is meant to accommodate the governor’s height, according to the report.
The governor’s office purchased the lectern from Beckett Events LLC, an events management firm based in Arlington, Va. Hannah Stone, who runs a consulting firm that worked on Sanders’ campaign for governor and her inauguration, also worked with Virginia Beckett, founder of Beckett Events, in selling the lectern to the governor’s office.
Neither Beckett nor Stone responded to multiple requests from auditors to answer questions, nor did they respond to the governor’s office, which attempted to help auditors contact them. Auditors also were unable to reach New York-based Miller’s Presentation Furniture, which manufactured the lectern.
In response, the governor’s office denied violating any state laws, saying the laws on budgeting and distribution of state property don’t apply to constitutional officers, such as the governor, and that the governor lawfully used state funds to make the purchase.
The governor’s office also stated in its response that the handwritten note stating “To be Reimbursed” did not violate state law, stating that “Making handwritten notes on invoices and receipts is a common bookkeeping practice and has been historically utilized in state government.”
Sanders declined to speak with legislative auditors or provide them a written statement, although members of the governor’s office sat down to answer questions for the report.
While an invoice showed the total for the lectern was $19,029, auditors were able to get a hold of a more detailed document breaking down the price:
⬛ $11,575 for the lectern. m $2,500 consulting fee.
⬛ $2,200 travel case.
⬛ $1,225 for freight shipping and hand delivery of the lectern.
⬛ $975 for freight shipping the travel case.
⬛ $554 for a credit card processing fee.
STATE LAWS
The governor’s office described the report as “deeply flawed” and maintained Sanders followed state laws cited by the auditors. According to the governor’s office, the statutes auditors said the Republican governor may have violated do not apply to her, as some of those laws specifically refer to “state agency,” which does not apply to constitutional officers.
“The (governor’s office) welcomed this audit, encouraged the General Assembly to complete it quickly and was cooperative and accommodating to (Arkansas Legislative Audit’s) requests,” according to a response from the governor’s office regarding the report. “It was a waste of taxpayer resources and time that resulted in exactly what the (governor’s office) said: the office lawfully purchased a podium and travel case. It was later determined that (Republican Party of Arkansas) should lawfully purchase it. No laws were broken. No fraud was committed.”
Among the laws state auditors cited was the General Accounting and Budgetary Procedures Law, which requires all state agencies to “provide adequate accounting for all fiscal transactions.”
Auditors also concluded Sanders’ office may not have complied with Arkansas Code 25-8-106, which states, “All state agencies, boards, com
missions, departments, and colleges and universities are required and county, municipal, or other tax-supported institutions are authorized to utilize the services of the Marketing and Redistribution Section, unless specifically exempted in writing by the State Procurement Director.”
The governor’s office said it is not subject to either of those laws as the relevant sections only apply to state agencies, which does not mean constitutional officers.
The governor’s office repeatedly rejected Arkansas Legislative Audit’s claim that the governor’s office is considered a state agency under the General Accounting and Budgetary Procedures Law, and therefore subject to its restrictions. Arkansas Attorney General Tim Griffin issued an advisory opinion on Friday stating Sanders’ office is not a state agency under the law.
“Regarding the Legislative Audit report, I am perplexed to see that a significant portion of Legislative Audit’s analysis rests on the mistaken conclusion that the Governor’s office is a ‘state agency’ for the purposes of certain statutes,” Griffin said in a statement Monday.
Sanders had requested the opinion in an April 3 letter, though she did not give a reason for her request at the time.
Arkansas Legislative Audit disagreed with Sanders’ and Griffin’s offices in its reply to the governor’s response. Legislative auditors state the General Accounting and Budgetary Procedures Law does not include a general definition section defining “agencies,” with the law applying to constitutional officers unless otherwise exempted.
“When the General Assembly intended to exempt (constitutional officers) from sections of this law, it did so expressly and clearly,” legislative auditors said.
Arkansas Legislative Audit said the most recent appropriation act for the governor’s office is Act 855 of the regular session. Section 7 of that law “consistently addressed the Governor’s Office as ‘an agency,’” their reply states. “A sensible reading of this language is that, like other (constitutional officers), the Governor’s Office is subject to the General Accounting and Budgetary Procedures Law.”
REACTION TO AUDIT
Many lawmakers, as well as other prominent state and local figures, expressed support for the audit process but disagreed about the importance and accuracy of its findings.
Senate President Pro Tempore Bart Hester, R-Cave Springs, said Monday in a written statement that “audits are important to ensure the people’s money is being responsibly handled.”
“The audit showed the purchase could have been cleaner, but more importantly shows accusations were overblown,” he said. “I’m pleased with the outcome and ready to move on to handling the people of AR business.”
House Speaker Matthew Shepherd, R-El Dorado, had no comment Monday about the audit, House spokesperson Cecillea Pond-Mayo said.
Senate Minority Leader Greg Leding, D-Fayetteville, said “errors were made and rules violated” but expressed disappointment that some of the entities involved, such as Miller’s Presentation Furniture, Salem Strategies and Beckett Events, didn’t respond to questions from legislative auditors.
He said he hopes the prosecuting attorney’s office “at least gives it serious consideration.”
“Beyond that, I just hope lawmakers press for answers from some of the parties that refuse to comply with the investigation,” Leding said, referring to today’s Joint Auditing Committee meeting.
House Majority Leader Marcus Richmond, R-Harvey, said he thought the report needed to be done but that he thought many lawmakers and citizens had “moved on” from concerns over the audit to focus on other subjects during the fiscal session.
“I have quite a bit of confidence in this kind of effort and how seriously (legislative auditors) take their jobs and what they do,” he said. “I think it was a good thing for the state to do this and for the legislative body to say they needed this done.”
Richmond disagreed with the governor’s office in its description of the report as “deeply flawed,” but said opinions about the report “depend on your perspective.”
Sen. David Wallace, cochair of the Legislative Joint Auditing Committee, said “I don’t think there is any serious offense” outlined in the audit’s report.
“It was a mistake by an inexperienced staffer,” said Wallace, a Republican from Leachville.