Trust, transparency and qualifications all at the forefront of three-way Arkansas treasurer race

From left: Republican Secretary of State John Thurston, Democrat John Pagan and Libertarian Michael Pakko are running for Arkansas treasurer in a November 2024 special election. (Courtesy photos)

John Pagan says he hasn't seen John Thurston since Jan. 13.

Pagan, the Democratic candidate for Arkansas treasurer, has been traveling the state to meet voters and pitch himself as the right candidate to oversee the state's investment portfolio of more than $11 billion. He's attended forums and community events as far south as Warren and as far north as Mountain Home; as far southwest as Hope and as far northeast as Corning, Piggott and Rector in Clay County.

Thurston, the Republican Secretary of State, hasn't shown up, so he must be "hiding in this campaign," Pagan said.

Thurston did not respond to three interview requests from the Advocate.

Meanwhile, Pagan says he's met several voters who are upset with Thurston for his handling of a proposed state constitutional amendment that would have created a limited right to abortion. Arkansas Abortion Amendment supporters submitted more than 102,000 signatures to the Secretary of State's office in July, hoping to get the measure on the November ballot, but Thurston disqualified a portion of the signatures , and in August the Arkansas Supreme Court upheld his decision not to put it on the ballot.

What does the state treasurer do?

The treasurer serves as the state banker. According to the treasurer's website , the office "accepts more than $70 million daily in deposits from various local, state, and federal sources and credits them to the proper accounts."

The office also distributes funds to state agencies and local governments, issues checks for payments of services rendered and balances its books daily.

Its Cash Management Division works with the Department of Finance and Administration, other state agencies, banks and investment firms to handle state fund transfers.

The treasurer's office also oversees the state's investment portfolio, which totaled $11.6 billion as of June 30, the end of the 2024 fiscal year.

The treasurer serves a four-year term and is paid an annual salary of $98,564.

Thurston's decision "has placed trust at the center of this campaign," Pagan said.

"If we couldn't trust John Thurston to count the signatures on a petition, how can we trust him to manage our investment portfolios without playing politics and without weaponizing the money to further an extreme culture-war agenda?" said Pagan, a professor of law and history who represented Little Rock in the state Senate from 1991 to 1993.

Pagan said his time on the Senate Revenue and Tax Committee familiarized him with state government finance, and his four years on the Pulaski County Quorum Court taught him how local government finance works.

Thurston was Arkansas' commissioner of state lands for eight years before he was elected secretary of state in 2018 and reelected in 2022.

"My objective as an elected official is to do my job so well that my constituents can live their lives, raise kids, pursue their careers, enjoy life, and never have to be concerned with the office I have been entrusted with," Thurston states on his campaign website

In September, he told the Arkansas Democrat-Gazette that his record of service in elected office proves that voters can trust him.

announced in August 2023 that he would seek to serve the final two years of fellow Republican Mark Lowery's term as treasurer. Lowery died in July 2023 after having two strokes earlier in the year. Larry Walther, former secretary of the state Department of Finance & Administration, is the state's interim treasurer

The race also includes a Libertarian candidate, Michael Pakko, the chief economist at the University of Arkansas-Little Rock's Arkansas Economic Development Institute. Pakko worked for the Federal Reserve for 20 years and has been chairman of the state's Libertarian Party for almost 10 years.

He said he has "done just about every job on a campaign there is" but has never run for office before.

"It's almost like a call to public service in this case," Pakko said. "...When this special election came up, where the focus might be more on the treasurer's race than usual because it's the only statewide office up for election, then it might be an opportunity for a third-party candidate who's qualified, like myself, to get some attention and gain some traction."

Like Pagan, Pakko has been campaigning statewide. Unlike Pagan, Pakko does not see the other two candidates as his true opponents. Instead, he said he is running against the two-party system itself and hopes the deciding factor in the race will be who is most qualified for the treasurer position.

"When I introduce myself [to voters], one of the first things I say is, 'I'm not a Republican and I'm not a Democrat,' and I don't even have to go any further and it's high fives and fist bumps," Pakko said.

Republicans have held majorities in the state Legislature and all seven executive branch offices since 2015.

If Thurston wins, he would be eligible to run for treasurer in 2026; regardless of the election's outcome, he would not be able to run again for secretary of state due to the state's limit of two four-year terms per executive office.

Additionally, Gov. Sarah Huckabee Sanders would have to appoint an interim secretary of state to complete Thurston's term if he becomes treasurer.

I'm trying to appeal to independent voters who often say, 'I vote for the person, not the party,' so my emphasis is entirely on the credentials to do the job.

– Michael Pakko, Libertarian candidate for Arkansas treasurer

The investment portfolio

Most of the millions generated from the state's investment portfolio last year went into a reserve fund, and this is directly related to the state's continuous tax-cutting laws, Pagan said.

For the past few years and most recently in June , Arkansas' Republican lawmakers have been trimming the state's income tax. Sanders has set a goal of phasing it out completely. Critics have said these measures reduce the state's capacity to fund its own services.

Reducing income tax revenue leads the state to rely on the treasury's investment earnings as a reserve fund, creating a vicious cycle, Pagan said.

"Instead of having two potential sources of money, you have none," he said. "You can't use the investments because I can just hear what their answer is going to be: 'Well, we need to keep that in reserve.' Why do we need that in reserve? Because you keep cutting the progressive tax. You're either going to have to not fund services or you're going to have to raise regressive taxes, sales taxes in particular. It's terrible fiscal policy."

Pagan said the investment earnings should benefit the public, who "have a moral claim" on the money, in the form of stipends for higher education scholarships and job training.

He has endorsed Issue 1 , a proposed constitutional amendment that would allow state lottery proceeds to fund scholarships and grants to students in vocational-technical schools and institutions. The funds are currently limited to students who attend two- and four-year colleges and universities through the Arkansas Scholarship Lottery's four existing programs . As a state senator, Pagan co-sponsored the 1991 law that created one of the four programs.

Pakko said he does not believe that earmarking investment earnings for purposes such as education is within the treasurer's purview.

One of Pakko's goals if he wins is to "convene a panel of experts" to examine the treasury's investment strategies to see if it can raise the returns on its investments, he said. He also hopes to bring more attention to the Arkansas Financial Education Commission , created by a 2021 law to "help Arkansans in all geographic areas and socioeconomic backgrounds achieve financial well-being," according to its website.

Pakko said he is "running to win" and sees this attitude as necessary even in a long-shot campaign. His "secondary goal" is to "do well enough to make a stronger case" for changing the state's law for recognizing political parties, he said.

In compliance with state law , the Libertarian Party has had to file petitions with 10,000 signatures from registered voters to the Secretary of State's office in order to put its candidates on the ballot for the last seven election cycles, Pakko said.

If we couldn't trust John Thurston to count the signatures on a petition, how can we trust him to manage our investment portfolios without playing politics?

– John Pagan, Democratic candidate for Arkansas treasurer

Party politics

Pagan says voters statewide are still "appalled" and harbor "bitter resentment" over Thurston's July decision not to count most of the signatures for the proposed abortion amendment. Thurston claimed the measure's ballot question committee did not submit the proper paperwork regarding paid canvassers at the proper time.

Four of the seven state Supreme Court justices sided with Thurston after the ballot question committee challenged his decision. Associate Justice Karen Baker wrote in her dissenting opinion that "this [paperwork] requirement was made up out of whole cloth" by Thurston.

Pagan said he agreed with Baker's statement. He also mentioned Thurston's from Arkansas Right to Life, which opposed the amendment, and his donation to the anti-abortion group earlier this year.

"Judging by his record, [Thurston] demonstrated that he is willing to bend the law to the breaking point in order to achieve partisan ideological aims," Pagan said, adding that he would not do the same if elected.

Thurston told the Democrat-Gazette that his personal views on abortion "had zero sway on us rejecting those petitions."

When asked whether the situation might cost Thurston support from Republican voters, Pagan said most Arkansan voters aren't registered with a political party to begin with.

"I think most people consider themselves to be independent, and I've had plenty of people without mentioning their party affiliation just say, 'This is not fair,'" Pagan said.

When asked the same question, Pakko said he did not disagree with Pagan's rhetoric about Thurston's conduct but was not making it a part of his campaign.

"The two men who are running against me are pretty much playing the two-party duopoly game," Pakko said. "...Often, campaigning is to say, 'You have to vote for me, or else the other guy's going to win and that would be terrible.' In a way, I'm trying to appeal to independent voters who often say, 'I vote for the person, not the party,' so my emphasis is entirely on the credentials to do the job."

ESG regulations

Where Pagan and Pakko agree is the shared value of transparency, according to both their websites and interviews.

Pagan said his specific transparency goal is for the treasurer's office to publish its quarterly investment reports in a timely manner, which he said is not always the case now. Consistent and timely reports are especially important in light of Act 411 of 2023 , Pagan said, calling the law an example of the state government "weaponizing" investment money in "culture wars."

Arkansas is among several Republican-led states that have passed laws ordering public entities, including the treasury, to divest state holdings from financial services providers that account for environmental, social justice and governance (commonly known as ESG) factors in investment strategies.

Act 411 focuses on providers that discriminate against fossil fuel companies, firearm manufacturers, ammunition makers or similar businesses. Critics say the laws end up costing states millions and even billions in the long run.

As treasurer, Pagan said he would enforce Act 411 unless a court strikes it down. However, he warned that the sentiment behind the law could lead to legislation targeting other company policies that "clash with MAGA" attitudes, besides just what Republicans consider "too pro-environment."

He also said people he's met while campaigning haven't heard of Act 411 and their "mouths drop open" when he explains it to them.

"[They say], A. Why are we taking sides in the debate over climate change? And B. If you're going to take a side, why take the wrong side?" Pagan said.

In contrast, Pakko called the ESG law "a big nothingburger" and simply "posturing" from the Legislature in response to the same from corporations. He agreed with Pagan that the treasurer's office should not get involved in social policy.

Pakko said he wants to "bring more openness to the state's books" and compile reports to deliver to the public regularly, which he already does as an economist.

"I would anticipate being a more public-facing official than some treasurers in the past, who basically just run the office and you don't hear very much from them," he said.

Early voting begins Oct. 21, and Election Day is Nov. 5.

Learn more about Arkansas' general election with the Advocate's