Commerce Secretary Mike Preston is using the Arkansas Press Association’s paid-distribution news release service today to extol his department’s distribution of federal virus relief money and to cover his botched handling of the Ready for Business grant program.
It was hard work. he says. Indisputably true.
From federal Small Business Administration Loans to Community Development Block Grants for rural hospitals, Quick Action Bridge Loans for small businesses and most recently, the Ready for Business Grants, complex systems of application and approvals were readied and launched. Every day we sought to answer the question, “How can we help these struggling businesses?” All of this, while at the same time ramping up unemployment benefits of the Department of Workforce Services to get money into the hands of the newly unemployed. This has never been done before at this scale or within this short of a timeframe, and there was no road map showing the potential pitfalls. At the Department of Commerce, we reassigned a large portion of our workforce to aid in the mission change and refocus. We called on the private sector to help beef up the information technology needed to handle the vast loads.
And the pressure on all of our systems continues to this day. All of this done while a significant number of our staff must work from home.
Then he drags in the Arkansas Times, though not by name, for a Trump-style Fake News alibi.
He recounts the April 23 receipt of $1.25 billion in federal money for various uses and the decision a week later to put $15 million in the Ready for Business grant program. He says he can’t remember a program rolled out with such speed.
At 8:30 a.m. on April 29th , the day the Ready for Business program rolled out, an email was sent to almost 200 economic development groups and locally-elected officials across the state encouraging them to watch Governor Hutchinson’s daily press briefing, and join a 3:00 p.m. conference call with me and my staff to provide more information on how they could help get the word out about the program. No details of any kind about the program were shared in that email. Keep in mind, the very essence of what we do in Arkansas economic development is based on the network of public and private partners, and we are the immediate conduit of detailed information to the hundreds of entities in the state focused on bringing and keeping jobs in the state. No details of any kind were transmitted to anyone before Governor Hutchinson announced the launch at his daily briefing at 1:30 p.m. Purported emails published by a local media outlet claiming that advance word got out were simply the invitation to the 3:00 p.m. conference call, and nothing else. The application link on our website went live at 5:00 p.m. No one had the ability to apply in advance or to fill out their applications in advance. As approvals for the program are made over the next week, we will make public the names of the companies receiving funds, and it will be apparent the first applicants are not from lobbyist-connected companies, but small businesses in desperate need of assistance.
The legislature has expressed disappointment with the timing of the rollout. We agree with their criticism. If we had to do this over, we would have delayed the web launch for at least another day to ensure as many people in the state could be informed better and to ensure legislative approval was formally in place. We should have paused to let everyone catch up to our efforts. We’ve learned from this, but it is critical to convey, no favoritism was given in any way to any group.
This is, in short, not the whole story. For a clear understanding of the key details, see the e-mails I uncovered in a Freedom of Information Act request.
- Preston told the legislature there were “no leaks.” But even he admits advance notice was given to a select group of business insiders, starting with an Arkansas State Chamber of Commerce Association lobbyist, that the program was coming. Lobbyists and attorneys were watching when the announcement was made and thus were ready to pounce. They got further special handling in a conference call.
- No “favoritism?” Untrue. Thousands of businesses (and most legislators) had no idea an announcement was coming or, after the fact, that it had been made. Thanks to an 8:30 a.m. notice, e-mailing of precise details at 1:42 p.m., less than a minute after the first words mentioning the grant program were uttered by the governor, and a 3 p.m. conference call, select insiders were ready to pounce at 5 p.m. when the website went up, without notice to the legislature and thousands of others without time, lawyers or lobbyists to follow the governor’s daily coronavirus briefing. The first application came in at 5:04 p.m. Do you think the early notice might have helped?
- A critical fact is omitted from Preston’s defense. The original $15 million was in a first-come-first-served program. It was oversubscribed in minutes before thousands knew of its existence. Being told in advance about the news conference and given a 3.5-hour head start on the details (see the 1:42 p.m. email from AEDC to chamber insiders) was invaluable.
- He tells the truth about one thing: legislators were not happy.
- If there’s no favoritism in the grants that ultimately were made it’s because the program was expanded to $147 million, more than enough to provide money to every single qualified applicant over a multi-day application period. The AEDC has still not complied with FOI requests for recipients.
Preston has at least now admitted the existence of his 8:30 a.m. heads-up on April 29. It is technically true that his agency’s distribution of full details came seconds after Hutchinson began announcing the program, but ask yourself if it is honest to imply that details of the program were announced fairly to all at the same time, particularly given how quickly the money was gone. Remember only select favorites got the details in such a speedy fashion.
Preston is likely to get more questions on this at the Legislative Council tomorrow. He refused to appear before a legislative committee last week. Ready for Business will be one question. Another will be the pandemic unemployment assistance program, late arriving and then further delayed by a security flaw. He didn’t mention that particular problem in the Press Association release. Perhaps that will come next week.
Reading Preston, it’s easy to conclude he believes that if there’s a problem in the administration-public relationship, the problem is us, not him.
I believe we all know this is just the start of a long process of recovery, and it’s going to take our spirit of comradery and trust to lead our state out of this immediate emergency. We will continue to strive for perfection. Because of the data-driven and measured approach we’ve taken with this pandemic, Arkansans are faring better from a physical and fiscal standpoint than others in the country. The decisions we all make together now will shape our recovery for decades to come, and I think we can all be proud of the leadership from Governor Hutchinson and the legislature as they find new ways to partner and prosper. We have no other choice.
It’s that time of the year when Preston comes up for a recommendation for a performance bonus from the Arkansas Economic Development Foundation. Each of the last four years, he’s gotten an added $50,000 at the recommendation of Governor Hutchinson. Based on his account, I like his chances.
UPDATE: At 12:04 p.m. today, the Press Association issued an email asking that the piece by Preston distributed at 9:48 a.m. not be published. I informed the APA it was too late in my case. I will continue to use it here because, knowing of its existence and my belief that it is newsworthy, it could be obtained by an FOI of Preston. So here it remains. Perhaps it bears closer scrutiny for a reason he might have decided to recall it.
UPDATE II: Ashley Wimberley of the Press Association said she’d been told the state wanted to add details to the piece and planned an updated version Thursday. We’ll report on the update here as well.