Support for Arkansas Week provided by the Arkansas Democrat-Gazette.

The Arkansas Times and Little Rock Public Radio.

And hello again, everyone.

Thanks very much for being with us.

There are two races on the statewide ballot this election cycle.

One is for chief justice of the Arkansas Supreme Court, a contest unique in its own way in that both candidates already sit on the court as associate justices.

Our focus in this edition is the other statewide campaign, the one that will give Arkansas a new state treasurer.

And it, too, is a race out of the ordinary, unexpected and mandated by the death in office of the previous elected treasurer.

Mark Lowery, serving as interim treasurer by appointment of the governor is Larry Walther, a former director of the State Department of Finance and Administration.

Since this is a special election, the office will again be up for grabs in the 2026 cycle a couple of years from now.

State Treasurer oversees billions of dollars in state money.

And the three candidates that are vying for the position are with us now in alphabetical order.

John Pagan is a former state senator and the Democratic candidate, Mike PECO, chief economist at UP Little Rock's Economic Development Institute and the Libertarian Party nominee.

And he also serves as the party's chair And Arkansas's current secretary of state, John Thurston is the Republican nominee.

If he wins, the governor will appoint someone to serve in his current position, which is secretary of state.

Gentlemen, thank you very much for being with us.

The theme that at least two of you have stressed in this campaign is trust Mr. Pagan.

Mr. Thurston.

Secretary Thurston, That's the word that you have, I think employed most commonly commonly.

We'll start in alphabetical order.

Jon Pagan.

I agree with you, Steve.

Trust is the central issue in the race.

Which of the three candidates can the voters trust to handle their money faithfully to the law?

And I promise that if I'm elected treasurer, I won't play politics with the people's money.

Now, Secretary Thurston has said we should judge him by his record in office.

And I think as secretary of state, he has demonstrated that he can't be trusted to refrain from engaging in politics when he discharges his official responsibilities.

He invented out of whole cloth a paperwork technicality that resulted in kicking the abortion amendment off the ballot.

And I think if he's elected treasurer, he will continue to play politics in that office as well.

I won't.

I will be nonpartisan.

I will be non-ideological.

I will focus exclusively on economic factors.

When I invest the taxpayers money.

Mr. Thurston, you saw that coming up, I guess.

Well, thank you for having us.

I think it's you serve the public well and having a forum like this.

And it speaks volumes to the state that we have three individuals willing to step up and put their name on the ballot, which is a huge task and responsibility.

It's interesting that trust was brought up primarily a tactic attacking the trust that Arkansans have had in me for for 14 years, I suppose, or thereabout.

And so and it's also ironic because when I first ran, I was in the ministry for 13 years.

I didn't know a single soul in politics.

I didn't know any elected officials per se, any one individual in the Republican Party.

And that was kind of my connection of getting involved.

And when I ran in 2004, Land Commissioner, the one thing that I promised Arkansans is that I would not lie to them.

Taking the example of the abortion amendment.

Being a legal scholar as he is, he should understand the separation of powers, the three branches of government, all three branches of government.

Kick that off the ballot.

The legislative.

Pass the law.

I did my best to interpret the law and abide by the law.

And then the Supreme Court ruled in my favor.

So there we have a prime example of all three branches of government saying that that amendment or that initiative should not have been on the ballot.

Well, he does have the Supremes on his side.

Mr. Pagan, in terms of the abortion amendment.

There was there was an erroneous 4 to 3 decision that suffered from the same flaws as Secretary Thurston's initial decision.

Adam Koski, who is a Washington lawyer and a former clerk for Justice Antonin Scalia, wrote a critique of Justice Rhonda Wood's 4 to 3 decision in that case.

That is the most thorough demolition job I've ever read in my 45 years as a lawyer.

That decision was result oriented.

The problem here is that Secretary Thurston and his allies were afraid that they would lose an election if this measure had been put on the ballot, with reasonable exceptions to the state's total ban on abortion.

The people of Arkansas, like the voters in other red states, would have passed it.

And so you can't lose a race.

You don't run.

They were determined by any means necessary to keep this measure off the ballot, and they did so.

And I think they have done a grave disservice to the voters of Arkansas.

I think the people who signed the petition were cheated and disrespected, and I think the rest of the voters in the state were disenfranchized by this result oriented action that he has taken in order to impose his personal religious views, ideological views and partizan affiliations on the rest of the state of Arkansas.

Well, I want to go to Mr. PALKOT in just a moment, but it's a kind of a point counterpoint here.

So, Mr. Thurston, I'll let you respond.

Well, we're talking about trust, and it's unfortunate that there's no way to prove a negative with with his accusations.

And all I can say is that regardless of the ballot initiative, it could have been a pro-life initiative, and I would have done the exact same thing, because when you're in a constitutional office, you fulfill your fulfill your statutory responsibility to the law.

If you get it right or wrong, that's why the courts are there.

And so if you want to say that the courts are politicized as well, well, that's a whole separate conversation.

However, our decision was strictly based on the law.

And here's one last interesting note.

For the past 11 years, since that law has been in effect, every other sponsor has gotten it right up until now.

And so, again, there's no way to prove a negative with those accusations.

Well, let me go to Mr. Parker now.

What do you make of this, sir?

Or do you want to make something up?

Well, I might have a comment on that, but I'd like to point out first that I trust is also a part of my pitch to the voters.

You know, I point out that I've been a trusted Arkansas economist for years, and now I'm running for state treasurer.

You know, the reason I'm running for treasurer is because I realize that my background, my experience and expertise in economics, uniquely qualified me to serve the people of Arkansas in this particular elected office.

I mean, after all, I'm an economist by profession.

I have a background in banking and finance.

For the past 15 years I've been the chief economist, state economic forecaster at the Arkansas Economic Development Institute.

And in that capacity, I'm widely known as an expert on the Arkansas economy.

So based on qualifications alone, I think it just makes sense for me to run for office as state treasurer.

Now, as to this, you know, bickering, I guess this going on over over the issues on the abortion amendment and all that.

I think my opponents, the two Johns here on either side of me are playing their roles in the bipartisan process the way it often plays out.

You know, my real opponents in this race are not the two johns, but the letters behind their names, the party labels, the R&D.

And, you know, there's often this bickering that goes on.

I often confronting one another at odds with one another, often seeming to be disagreeing just for the sake of being disagreeable.

And, you know, I'm running for office as a libertarian despite the uphill battle that entails, because I want to disrupt that system.

It's not good enough to say the other guy is bad, so you have to vote for me.

That's what a two party system brings us down to.

I'm trying to throw a wrench in that and saying there are three candidates here.

Each of them would be fine treasurers, but I'm the most qualified in the race and that's the message that I'm delivering.

The system, then, in your view, has not served the nation well or the state well.

I believe that the two party system sets up this conflict such a situation, and that if a, you know, we had a third party, I think it would be healthy for our democracy.

Well, not just a third party, a multi-party, pluralistic system where we can compete with one another based on ideas, compromise and competition of of among a number of candidates, instead of this two way choice that voters are confronted with in our current system.

What is the difference between bickering and give and take or at its core, democracy?

Well, I think there would be more give and take if we had a more pluralistic system, if we didn't have just two sides who are always opposed to one another.

But coalitions had to be formed between, say, Greens and Democrats, Libertarians and Republicans.

It would be a setting where we could have compromise and open discussion and more rational discussion of the issues than just the confrontation.

Mr. Bacon, You said a second ago that you would not play politics if elected with the people.

Are you suggesting that the Treasurer's office has been a scene of political activity or unfortunately, the Legislature has started down that road with the passage of the ESG blacklist law?

ESG stands for environmental, social justice and governance.

And the Treasurer is the one who is required to maintain the blacklist.

Some important financial companies, such as Goldman Sachs, have been banned from doing business with the state of Arkansas and with local governments because they've been perceived as being too pro-environment.

And what I'm afraid will happen Under Secretary Thurston is that he will seek to use the $11.6 billion investment portfolio of the state in order to advance his extreme ideological agenda.

Now, when he talked about trust a moment ago, let's look at the record.

He has seen I've seen the tape.

He has said he does not believe in the separation of church and state, that it's not in the Constitution.

Evidently, he's not familiar with the establishment clause of the First Amendment.

In January of this year, he donated campaign funds to the organization that was operating the declined to sign campaign that was intended to keep the abortion amendment off the ballot.

His allies failed 102,000 people, including me, signed the petition, and so they had to fall back on their friend in the secretary of state's office to do their dirty work and to kick the abortion amendment off the ballot.

And what I'm afraid will happen is that when he is in charge of that enormous pot of taxpayer money, he will take another step down the road toward the politicization of the Treasury.

The Treasurer should operate purely on a business basis nonpartisan, non-ideological.

In order to make money for the people of Arkansas.

So we will have more funds to put in worthwhile projects.

Well, Mr. Thurston, still in a lot of fear.

That's all I can tell you.

My degree is in economics.

And of course, in this particular race, we're running a constitutional office.

It is a big responsibility to run the Treasurer's office.

It's the volume is immense.

You're dealing with municipalities, You're dealing with counties, you're dealing with folks at the federal level, of which I have relationships with all the counties and most of the municipalities.

Also something that's interesting that I found that I want to look at closely is the process of of bidding on CDs.

When you have banks that are bidding on CDs out of the Treasurer's office.

It's a bidding process.

It's online.

And when the time stops, whoever is the last, the highest bidder obviously wins.

And what we have found is some of the smaller banks, when this could be just due to capitalism and free market, there's nothing, no way to fix it.

But what is happening is some of the smaller banks here in Arkansas are having a hard time because more sophisticated, bigger banks have.

I guess I bought whatever watching that bidding process and, you know, millisecond are getting the last bid.

And when you may have a smaller bank with someone just sitting there in front of the the computer trying to click the mouse at the right time.

So I'd like to look at that to figure out a way to make that more equitable.

Perhaps there is no way, but possibly a sealed bid process may be the best answer to that.

But that's just something I want to definitely look at is going into the Treasurer's office.

I would ask both of you gentlemen to address this.

Mr. Pagan brought up ESG.

Did the is is that appropriate for a legislative body?

I agree with the spirit of it.

You know, you don't want a company hindering people's Second Amendment rights or or slowing down the energy producing ability of a country.

I'm for energy independence, but at the same time, I think the free market should guide us down the path of whether electric and wind and all of those things.

Free economy, open economy always produces those things.

So I don't think government should, quote, legislate that.

I do believe that we're going to have to be cautious with that as far as that particular committee is concerned, because here's one example.

Bank of America is the bank that the Treasurer's office does most of its dealings with, and it's because it's a large bank and there's only a handful of large banks that can handle the volume that we have.

And so hypothetically, let's say these large banks go to a very robust ESG program or reporting process, then you find that you've gotten yourself into a corner.

And so I do, but I agree with the spirit of it.

However, we do have to be very cautious on how strict we are on putting people on that particular list, as was mentioned.

Michael Parco, ESG.

I think the only reason to consider ESG in this conversation is to recognize that the treasurer is a state constitutional officer sworn to faithfully execute the laws.

And this is an initiative that took place in the legislature.

They passed the legislation to establish this blacklist committee, and it's the job of the Treasurer to carry that out.

Now, that said, I kind of think it's all pretty silly.

Kind of a big.

Much ado about nothing.

I don't think that it's really affected the Treasurer's portfolio of assets to the extent it would if it violated the fiduciary responsibility of the Treasurer.

There is an opt out clause in the legislation that would allow for delaying or postponing, but I don't think that's even been necessary.

So, you know, this is really not an issue that is for the Treasurer to decide whether it's a good or bad policy other than to perhaps point out if it did constrain the investment options of the Treasurer that should be brought to light.

But other than that, it's just let's go ahead and make this blacklist and do the divestiture.

And, you know, it's it's not that big a deal and it's not going to change the behavior of these financial institutions that are on the blacklist.

So it really is just posturing.

Well, how would you counsel the General Assembly then, or the policy makers?

And let's focus on something that really matters instead of taking a stand on what the investment policies or advertising policies of these financial firms are, because, after all, they're still playing to their base, their audience, their customers, by pointing out that they have these socially conscious policies in the first place.

So it's all about posturing and positioning in the market and of ideas and in the marketplace of finance, public relations.

Mr. Pagan.

I disagree.

I think it's very important.

The companies on the Blacklist have made millions of dollars for Arkansas taxpayers.

And look at what we've done.

We've put a scarlet letter on Goldman Sachs, one of the world's biggest investment companies.

And if you had been banned from doing business with the state of Arkansas, with all the retirement funds and with 1300 local governments, would you be eager to finance a private oil and gas drilling project in Arkansas or any other kind of job creating activity?

No, you'd probably say, I don't want to go anywhere near Arkansas because they're trying to bring the culture war into what ought to be a purely business decision and what I think the ESG law itself is, is really dumb public policy.

I think it's probably unconstitutional because there is a federal regulation that allows these companies to do precisely what they were doing.

I attended the hearings and heard the evidence, but I think it also is, as I said before, a first step down, a very, very dangerous road in which you're politicizing the Treasury, which ought to be focused entirely on making money as safely and reliably as possible.

Yeah.

Mr. Thurston, how much distance, fiscally or philosophically, I guess, is there between your position and Mr. Perkins on the ESG matter?

Well, I was with another reporter one day, and I believe the Democrat opponent had just gone out and he was talking about how a nice guy he is.

And I said he said, But you all disagree on political stance.

I said, Probably.

I said, but I bet our math is the same.

Right.

And that's really where we need to focus on in the Treasurer's office.

And one area that we really need to be mindful of, the yield curve has just become positive.

Last month, if my what I read was accurate and it has been inverted for the last about two years, which is the longest inverted yield curve in on record.

And what that simply means is after time running out.

No, no.

And what that simply means is long term bonds rates have been lower than short term.

So we've been kind of capitalizing on that and the Treasurer's office as well.

We should.

But as we all know, that is definitely not the norm.

In course, a liquidity preference theory is what we all pretty well go by, whether it's a bank, whether it's an office or a household, and kind of back to the banks warning those CDs, they're some of these smaller banks are starving for liquidity.

So we need to give them a good, fair opportunity at these CDs, but also security, liquidity and return on investment.

That's the order that the Treasurer's office focuses on first security, then liquidity and then return on investment.

And so if we had a two hour show and that can go into more of that, well, how about Michael Park?

How can take off?

Well, yes, Mr. Thurston has brought up a couple of points about investing and the strategies, the CDs, etc.. One of the initiatives that I would like to put in place if elected, would be to commission a panel of experts in finance and investing in order to take a look at the overall strategy of the Treasurer's portfolio investment plans.

The last such study that I'm aware of took place about five years ago.

I think it would be prudent to do a comprehensive look at the investment strategy, particularly given that, you know, the recent surpluses have really expanded the size of the portfolio, the assets that the Treasurer is investing in.

As Mr. Thurston pointed out, we're now in a different interest rate environment than we've had been for several years.

And so there are some opportunities there to perhaps occur and better returns on the people investments.

And so I think it would be a prudent thing to do to periodically take a look at those policies and to try to bring them up to date, to take advantage of the latest innovations in financial markets.

And and our strategy before we're getting the best return given the primary goals of safety, your principal and of course, liquidity so that state is able to pay its bills.

Well, we've got a couple of minutes remaining in the broadcast.

So while it's not a formal debate, how about we offer each of you gentlemen a few seconds to or a minute or so to close?

Mr. Pagan, we'll go with you first.

Well, alphabetical order again.

Okay.

I hope that people will trust me with this important responsibility because I have the experience to do the job.

I served in the Arkansas Senate on the Revenue and Taxation Committee, and I served on the Polaski County Quorum court.

And those experiences gave me a firsthand awareness of the way that state and local government finance operate.

Second, I had managerial experience.

I was dean of the law school and managed a staff and a budget that, in fact, is larger than the one that the state treasurer operates.

And I'll be independent.

I will be nonpartisan.

I will be non-ideological.

I will follow the law.

I won't bend it in order to suit some kind of agenda of my party.

Michael Parker Well, you know, I've talked about the fact that I'm running on the basis of my expertise and experience.

That's my primary point here.

A couple of other things that I would do if elected to be treasurer is one, I would focus on more openness in the office, what I call fiscal transparency.

I think that would be a good thing for the Treasurer to be out there.

Communicating directly with the people.

I would bring my communication and analytical skills to the task pretty much the same way I analyze the state's economy right now and focus more on the state's financial situation, bringing information about the state of the state's finances directly to the people.

Another issue that really is rarely talked about in this race is that the Treasurer is designated as chair of the Arkansas Economic or Financial Education Commission.

It's a relatively new position that was established by law in 2021 and I would be enthusiastic about supporting that job because I want to I don't want to cheat Mr. Thurston here.

Go ahead.

You got about a minute.

Well, I just want to.

First of all, regardless of the outcome of this race, I want to personally thank Arkansans for trusting me for 14 years.

I've been responsible for multimillion dollar budgets in the constitutional offices that I've been in.

If you've added it all up, it's hundreds of millions of taxpayer dollars.

I've managed hundreds of employees, developed systems, protocols, business model system, you know, those sorts of things to carry out my statutory responsibility.

And in a constitutional office, you're audited every year, a thorough audit every single year.

And for 14 years I have been audited like everyone else, and there has been zero fraud, zero mishandling of funds.

And I believe you know that.

All right.

Well, thank comes up eight times.

Indeed.

All that's left is to say thank you for watching.

See you next week.

Support for Arkansas Week provided by the Arkansas Democrat-Gazette, The Arkansas Times and Little Rock Public Radio.