Attorney General Dustin McDaniel told supporters today that he will drop out of the 2014 race for Governor.  Within minutes of McDaniel’s rumored exit, former Lt. Gov. Bill Halter said he’ll seek the Democratic nomination.

“I sought public office to serve my fellow Arkansans and to lead on issues that matter to the State that I love.  I have done that, and I will be forever proud of my record in the legislature and as AG.  I had hoped that I could shape the 2014 gubernatorial debate with my vision for the future.  Unfortunately, I am now convinced that if I run for Governor, this campaign would be about me personally, rather than Arkansas’s future,” said McDaniel in a statement.

“When it comes to our economy, our infrastructure and our schools – Arkansas is at a crossroads.  I believe that we need a visionary to lead our state forward on these critical issues.  Arkansas deserves a campaign that will focus on those issues, so I believe it’s in the best interests of my family, our state and the Democratic Party for me to not run for Governor,” continued McDaniel.

“Bobbi and I want to thank the many people who have encouraged and supported us and continue to lift our family up in prayer. My path lies in doing my job and enjoying my family, not in the chaos of this campaign.  I will spend my last two years as Attorney General focused on issues that matter to Arkansas, like fighting Medicaid fraud, ending the Pulaski County Desegregation case and standing up for consumers.  I pledge that our next Attorney General will inherit one of the most well-run offices in the United States, and I will leave grateful for the tremendous honor of having served,” McDaniel said.

McDaniel’s political fortunes have stumbled since he admitted in December to an extramarital affair with Hot Springs attorney Andi Davis. McDaniel held a press conference earlier this year and answered questions about the affair and its impact on his campaign, but at the time said he would remain in the race.

Amid news of McDaniel’s announcement on Friday afternoon, former Lt. Gov. Bill Halter released a statement saying he will file next week the paperwork necessary to establish a campaign committee for Governor. A formal announcement will be declared at a later date, he said.

“Over the holidays, my family and I talked about the demands a campaign for governor would place on us,” said Halter. “We decided as a family that we are up for the challenge. That’s why next week I will take the first necessary step towards running for governor in 2014.”

“During my campaign for governor I will put forward my plans and ideas to move Arkansas towards an even brighter future,” Halter added.

Former Cong. Asa Hutchinson is the only announced GOP candidate for Governor.

UPDATE: Talk Business Arkansas executive editor Roby Brock just got off the phone with McDaniel. Some excerpts from the conversation:

“I had a lot of time to think about what it would take to win,” McDaniel said. “I didn’t like the analysis.”

“The campaign didn’t need to be about me. It was the right thing to do to step aside,” he added.

“Of course, I’m very disappointed about this end, but it is the only honorable and responsible thing to do,” McDaniel said.

McDaniel said that it just become apparent as time wore on that his personal indiscretion would become the focus of the race and he knew it would not be productive personally or politically.

He said he will return all of his run-off and general election campaign funds dollar for dollar. After paying remaining primary expenses, he will return primary donor money on a pro rata basis.

Will he support the eventual Democratic nominee?

“Yes,” said McDaniel. “If they want my help.”

Is he planning to resign as Attorney General?

“No, nor was it ever considered,” McDaniel said.

David Ramsey from the Arkansas Times was a guest on this week’s edition of Talk Business Arkansas. Ramsey and Brock discussed the Friday afternoon developments in this interview.

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