Libertarian Party Filing Shows A Lot Of Out-of-state Funding (updated)

In May, the Libertarian Party of Arkansas pulled off the difficult task of qualifying for third party ballot access in Arkansas by submitting petitions with well over the 10,000 signatures required.  How were they able to pull off such a feat?  Their financial report filed in July sheds some light on this.

Of the $9,538 in contributions, the report only lists one from an Arkansas donor totaling $100.  This means the bulk of the funds came from out-of-state donors.

"The Libertarian National Committee recommended to me a professional fundraiser that they have had much success with in the past," Rodger Paxton, Chairman of the Libertarian Party of Arkansas tells me. "He, of course, kept a portion of the funds raised as his fee and we got the rest. He called on Libertarians all over the country who have an interest in spreading liberty and libertarianism in this great nation of ours. We took contributions from all 50 states and D.C."

Another interesting item on the report is that while the LPA shows $9,538, it also shows $30,131 in expeditures. What about the roughly $20,000 gap? Paxton explains.

"We began raising money for the ballot access process the first week of January 2011. The report you have only reflects donations received in the second quarter. The majority of the money raised for this was in the first quarter, as were some of the expenses. There was no loan. We raised every penny we needed and spent every penny of it plus a little bit that we already had," Paxton said.

But as for reporting on this period, Paxton insists that they "only had to begin filing the quarter we became a party, so there was no first quarter report."

Indeed, there does seem to be no provision requiring additional disclosure in state law or the rules governing third parties before they are recognized as a political party. I’m diving deeper into that with the Arkansas Ethics Commission early next week and will provide an update.

As for the $30,000 in expenditures, Paxton tells me that they brought in several "professional petitioners" to reach the required amount for ballot access.

UPDATE – According to Graham Sloan, Executive Director for the Arkansas Ethics Commission, there is not a requirement that specifically requires disclosure of the funds raised by a new political party prior to the quarter they are officially recognized as a party.  Although a candidate would be required to disclose the information beginning with the point at which $500 was raised or spent, there is nothing specific that extends this rule to political parties. 

Sloan points out that in the past it was rare for new political parties to be formed in Arkansas, but that has been made easier with the petition process rules currently in place.  He says this may be an area where the law needs to be amended to pick this up, but for now since there is no specific requirement, it is up to the new party if they wish to disclose this information.

In my opinion, Sloan is correct that the law needs to be amended.  Although it appears to me that everything the Libertarian Party was doing is above board, it does not require much imagination to see how someone with the funds to tinker with elections – George Soros for example – could abuse this rule.  Again, I don’t believe that is what is occurring here, but it is easy to see how this could happen in the future if the law is not tightened up.