NY dollars flow into SC school choice debate

New Yorker gave to S.C. supporters’ House campaigns

gnsmith@thestate.com April 8, 2012 

  • Howard Rich and the school choice fight Lawmakers who received campaign cash from New York school-choice advocate Howard Rich from 2008 to 2011: In the House Bruce Bannister, R-Greenville: $1,000 Liston Barfield, R-Horry: $3,000 House Majority Leader Kenny Bingham, R-Lexington: $5,000 Don Bowen, R-Anderson: $14,000 Bill Chumley, R-Spartanburg: $1,000 Tom Corbin, R-Greenville: $9,000 Kris Crawford, R-Florence: $10,500 Bill Crosby, R-Charleston: $5,000 Greg Delleney, R-Chester: $5,000 Tracy Edge, R-Horry: $9,000 Shannon Erickson, R-Beaufort: $2,500 Dan Hamilton, R-Greenville: $2,000 Nelson Hardwick, R-Horry: $5,000 Jim Harrison, R-Richland: $4,000 Phyllis Henderson, R-Greenville: $10,000 Bill Herbkersman, R-Beaufort: $6,000 Bill Hixon, R-Aiken: $2,000 Chip Huggins, R-Lexington: $2,000 Phillip Lowe, R-Florence: $7,000 Peter McCoy, R-Charleston: $7,000 Jim Merrill, R-Berkeley: $5,000 Dennis Moss, R-Cherokee: $5,000 Chris Murphy, R-Dorchester: $1,000 Wendy Nanney, R-Greenville: $14,000 Andy Patrick, R-Beaufort: $1,000 Mike Pitts, R-Laurens: $5,000 Tommy Pope, R-York: $7,000 Josh Putnam, R-Anderson: $1,000 Rick Quinn, R-Lexington: $9,000 Gary Simrill, R-York: $5,000 Roland Smith, R-Aiken: $5,000 Mike Sottile, R-Charleston: $9,000 Kit Spires, R-Lexington: $2,000 Tommy Stringer, R-Greenville: $5,000 Bill Taylor, R-Aiken: $5,000 Anne Thayer, R-Anderson: $3,000 David Tribble, R-Laurens: $1,000 Brian White, R-Anderson: $500 In the Senate Kevin Bryant, R-Anderson: $5,000 William O’Dell, R-Abbeville: $5,000 Mike Fair, R-Greenville: $3,000 Lee Bright, R-Spartanburg: $41,000 Greg Ryberg, R-Aiken: $2,000 Mike Rose, R-Dorchester: $7,000 Robert Ford, D-Charleston: $18,000, including $14,000 for Ford’s 2010 gubernatorial bid Tom Davis, R-Beaufort: $11,000 Darrell Jackson, D-Richland: $9,000 Senate Majority Leader Harvey Peeler, R-Cherokee: $3,000 Chip Campsen, R-Charleston: $1,000 NOTE: Listed donations do not include thousands of additional dollars donated by Rich’s associates. SOURCE: S.C. campaign disclosure forms
  • Howard Rich on school choice Howard Rich, a millionaire New York real estate investor, has been funding school-choice efforts in South Carolina for years. Libertarian-leaning and low-profile, Rich has been hesitant to speak with the S.C. media. But he did answer some questions last week from The State newspaper about his involvement in the school-choice debate. Q. How will this legislation benefit S.C. families?

    The legislation passed by the S.C. House of Representatives is a framework for giving parents more control over the education of their children. Given the continuing low performance of S.C. public schools, I would think the benefits to more parental involvement would be self-evident. What strikes me as most important about the House legislation is the consensus that Ways and Means Chairman Brian White was able to forge. Is this the legislation I would have written? No. Is this an acceptable framework that has been developed to meet South Carolina conditions, created by South Carolinians with the support of a wide array of groups and individuals? Yes, I think it is. That in itself is a benefit. It is a coming together of all interested parties to begin to address a serious and ongoing problem.

    Q. Much has been made about donations from your LLCs and associates to S.C. lawmakers who favor school-choice legislation. Can you talk about why you chose South Carolina as a place to support such candidates?

    I make donations to candidates in many states. As in my response to your first question, South Carolina trails almost all states in a bunch of categories so there’s a great need for choice and significant potential upside.

    Q. I take it you still own no property here in South Carolina and, thus, do not directly benefit from the passage of any school-choice legislation. Is that still accurate?

    It is still the case that I do not own any property in South Carolina or have anything to gain personally from passage of school choice legislation. I support efforts like this because I believe in freedom of choice and a parent’s right to have a say in the education of their children. Nothing more.

    Q. Do you think the bill can pass the S.C. Senate?

    You ask if the school choice bill passed by the House of Representatives can pass the S.C. Senate — I don’t know. Of course, I hope the bill passes out of the Senate, but I am not a lobbyist and certainly don’t have a crystal ball. If it does it will be a huge opportunity for a lot of middle and low-income families. That would be great.

More than half of the S.C. state representatives who voted in favor of a school choice bill that passed the House have received campaign donations from New York businessman and school-choice advocate Howard Rich and his affiliated companies.

Rich has made campaign contributions to 38 of the 65 House members – 58 percent – who voted for the bill, which passed 65-49.

Collectively, those representatives, all Republicans, received $188,000 in campaign cash from Rich and his limited liability corporations, or LLCs, from 2008 to 2011. That dollar figure does not include dozens of contributions totaling thousands of additional dollars made by Howard Rich associates who also favor school choice.

And more donations from Rich could be on the way.

All House members and state senators are up for re-election this year and are raising campaign cash now. Lawmakers must report new donations next week to the State Ethics Commission.

The House-passed proposal now heads to the state Senate, where it faces an uphill battle. Any one senator effectively can block consideration of a proposal, but school-choice opponents likely will not have to resort to filibustering to kill the idea. While the Senate is controlled by Republicans, the body’s ruling majority actually is a loose confederation of Democrats, most of whom who oppose the House-passed school choice bill, and moderate Republicans, many representing areas with good public school districts that they are determined to protect.

Also, Rich has directed little of his financial clout toward the Senate thus far.

Rich has given to only 11 of the Senate’s 46 members, and one of those recipients said late last week that he will oppose the House proposal.

In the House, two members, state Reps. Wendell Gilliard, D-Charleston, and Curtis Brantley, D-Jasper, accepted donations from Rich but voted against the school choice bill, which aims to give tax deductions to parents who send their students to private schools or who home-school their students.

The remaining 47 House members who opposed the bill – all but five of them Democrats – did not receive donations from Rich.

Critics of the school-choice legislation point to Rich’s donations and the late March House vote as proof that outside influence continues to shape education policy in the Palmetto State.

“It’s very sad that a large amount of money has come in from out of state to pressure legislators into doing something that most South Carolinians are against,” said Molly Spearman, director of the S.C. Association of School Administrators, which opposes the bill. “(This bill) erodes the support for public education in South Carolina.”

But lawmakers who voted for the legislation say it only makes sense that they would get donations from contributors, including Rich, who agree with their school-choice stance.

“What can he possibly gain from this? Other than he understands that education is important and requires out-of-the-box thinking? He gets no financial benefit from this,” said state Rep. Bill Herbkersman, R-Beaufort, who received $6,000 in Rich donations in 2010 and 2011.

Herbkersman, who says he has talked to Rich on the phone a few times but never met the New Yorker, added: “You can send as much (state) money as you want to any school. But if you don’t have a full parking lot on parent-teacher night, it’s going to be a failing school.”

He added, “This bill gives parents and students, who are really interested in an education ... a choice. The status quo is not working. It’s time to try something else.”

The Mystery Man

Libertarian-leaning and low-profile, Rich has been hesitant to speak with the S.C. media about his school-choice advocacy.

His multiyear S.C. effort for school choice has sparked controversy, inspiring a now-defunct blog that tracked his S.C. campaign donations and a 2008 statewide tour by one prominent Democrat, Phil Noble, who called on candidates to return his donations.

Accused of taking tainted money, some candidates returned Rich-affiliated money, including state Rep. Deborah Long, R-Lancaster, who sent back $12,000 received from Rich’s associates.

Bill opponents also charge Rich and other school-choice proponents with nasty campaign attacks on GOP lawmakers who did not support past school-choice bills. During last month’s House debate, state Rep. Boyd Brown, D-Fairfield, said voting in favor of the bill was approving of those tactics.

“What you’re saying with this bill is that this is the way to get things done,” Brown said on the House floor. “When it comes to school choice, that’s what it took to get this passed. All it took was legally being on the take from Howard Rich. Instead of voting on the interests of Howard Rich, you need to vote in the interests of your constituents.”

In his email to The State newspaper, Rich defended his right to fund candidates and said he does not “own any property in South Carolina or have anything to gain personally from passage of school choice legislation.”

He said he supports “efforts like this because I believe in freedom of choice and a parent’s right to have a say in the education of their children. Nothing more.”

Rich also has backed other conservative causes in other states, including term limits and limited-government initiatives. “I make donations to candidates in many states,” Rich wrote. “Given the continuing low performance of S.C. public schools, I would think the benefits to more parental involvement would be self-evident.”

In a 2008 video interview by then-state GOP chairman Katon Dawson, Rich said, “If I want to do something that I strongly believe in, like empowering parents – whether it’s in South Carolina or Georgia or California or any place – I should be allowed to do that.”

The long fight

The fight over whether to offer tax breaks to parents who home-school their children or send them to a private school has been a fiery debate in the S.C. Legislature since 2004, featuring regular bouts between the two entrenched sides.

On one side are public school groups and organizations that have argued the state’s public schools are not adequately funded. They say it is unfair to give tax breaks to private school and home-school parents that reduce the state’s income, which could go to finance better public schools. They also say private schools and home-schooling families are unaccountable, not as subject to state scrutiny as public schools are, and possibly offering subpar educations.

On the other side, school-choice advocates say a one-size-fits-all approach to educating students is a misguided idea ensuring that some students will fail. They say tax deductions would make it possible for more parents to consider education alternatives that work better for some students.

Nationally, more than 20 states have enacted some form of school-choice legislation, ranging from vouchers to tax deductions. Last week, for example, Louisiana’s General Assembly expanded its voucher program.

Despite the many school-choice proposals presented over the years, all ultimately failed to pass either the state House or Senate – until last month.

The House’s 65-49 vote on March 28 marked a major triumph for the school-choice movement and could be a sign of changing legislative sentiments.

This year’s proposal is different from previous ones. It grants tax deductions rather than the previously proposed tax credits.

The proposal would:

• Give up to a $4,000-a-year tax deduction for each child enrolled in private schools.

• Give up to a $2,000-a-year deduction for expenses for families who home-school their children.

• Make poor and disabled students eligible for private-school scholarships; those who donate to nonprofits that would provide those scholarships could claim tax credits.

“Is this the legislation I would have written? No,” Rich wrote The State newspaper. “Is this an acceptable framework that has been developed to meet South Carolina conditions, created by South Carolinians with the support of a wide array of groups and individuals? Yes, I think it is.”

Should the bill become law, it would cost the state about $37 million in lost revenue in its first year, 2012-13. That cost would continue – and could increase if more families opt for private or home schools – in future years.

Undue influence?

School-choice advocates say there has been inappropriate influence in the school-choice debate, but not by Rich and his allies. Instead, they point to emails, acquired through the state’s open records law, that show principals and other school officials have encouraged public school teachers to phone lawmakers to express their opposition to school-choice legislation.

“No matter one’s stance on school choice, this practice is fundamentally threatening to democratic institutions,” said Neil Mellen, spokesman for South Carolinians for Responsible Government, a school-choice advocacy group. “It replaces rule of law with political patronage. It makes voters and taxpayers subservient to the government.”

Spearman, of the Association of School Administrators, and other public school advocates say the law is followed in those communications and educators have the right to be informed.

“School personnel are extremely careful in following the letter of the law on that,” Spearman said. “SCRG has harassed school districts on this topic, hoping to keep them from staying informed. We won’t let that happen.”

Firing back, school-choice opponents long have called on the Responsible Government group to reveal who pays for its operations.

Mellen said his group has a range of individual and institutional donors but provided no specifics. He added his group does not receive any money from public sources, as opposed to some of the education groups fighting school-choice legislation whose members are dues-paying school districts.

An uncertain future

The bill next heads to the Senate, where it faces a more difficult path as Democrats and moderate Republicans easily could join forces to block the bill.

Asked if he thought the choice bill could pass the Senate, Rich wrote: “I don’t know. Of course, I hope the bill passes out of the Senate, but I am not a lobbyist and certainly don’t have a crystal ball. If it does, it will be a huge opportunity for a lot of middle and low-income families. That would be great.”

Based on his contributions, Rich’s Senate influence is not strong.

Of 46 state senators, only 11 have received money from Rich, including two Democrats, Sens. Robert Ford, D-Charleston, and Darrell Jackson, D-Richland. Collectively, those 11 senators have received $102,000.

Jackson, a former Richland 1 school board member, said he does not support the legislation that passed the House and doubts it can pass the Senate.

“It’s late in the session. You would need nearly a consensus to get it passed before time runs out,” Jackson said of the legislative session that ends in June. “And this will likely be controversial.”

Jackson said he only has met Rich briefly once, a couple of years ago when the New York millionaire made a rare stop by the State House to meet lawmakers. Jackson added he is not sure why Rich donated $9,000 to his campaign in 2010, but suspects it is because of his advocacy for charter schools, consolidating school districts and other non-traditional approaches to help failing schools.

But, Jackson added, “I’m a longtime supporter of public education. This bill won’t help our kids.”

Reach Smith at (803) 771-8658.

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