I'll let the official commentary to Section 5C(2) of the Code of Judicial Conduct do the explaining:
There is legitimate concern about a judge's impartiality when parties whose interests may come before a judge, or the lawyers who represent such parties, are known to have made contributions to the election campaigns of judicial candidates. Section 5C(2) recognizes that in many jurisdictions judicial candidates must raise funds to support their candidacies for election to judicial office. It therefore permits a candidate, other than a candidate for appointment, to establish campaign committees to solicit and accept public support and financial contributions. Though not prohibited, campaign contributions of which a judge has knowledge, made by lawyers or others who appear before the judge, may, by virtue of their size or source, raise questions about a judge's impartiality and be cause for disqualification as provided under Section 3E.Here's Waller's problem in a nutshell: By admittedly looking at the host list, he subjects himself to "legitimate concern" every time someone from that host list has an interest in a case before the Mississippi Supreme Court. The problem is magnified by the inclusion of PACs on that host list. PACs, by their nature, are collections of people who share an interest. Since Waller has decided to accept PAC money, he has expanded the list of "parties" as defined in the above commentary to an almost incalculable number.
Take for instance the fact that the Mississippi Medical PAC appeared as a host on the fundraiser, and that Waller now admittedly knows that group supported financially him in this election. Mississippi Medical PAC is the political action committee for the Mississippi Medical Association, which counts several thousand Mississippi doctors as its members. That means that whenever a medical malpractice case goes before the Mississippi Supreme Court, there will be "legitimate concern" about Waller's impartiality should Waller defeat Banks.
This problem can easily be avoided in two ways: 1) Candidates for judicial office shouldn't look at their donors lists. That's why candidates for judicial office go to such great lengths to create fundraising committees that are independent of the candidate's campaign. 2) Judicial fundraising committees should never accept PAC money. Doing so means that a judge who does see his donor list is open to questions about his impartiality every time a certain type of case, rather than a certain party, comes before the court.
Waller has gone wrong on both accounts, and now calls into "legitimate concern" his judgment in every case that comes before him that can affect nearly every industry in the state, from healthcare to manufacturing to trucking to real estate. This is awful, and I don't know of any way Waller can fix it.