State House for sale

State House for Sale: Leadership positions pay off in Legislature

jself@thestate.comSeptember 1, 2013 

  • The mother’s milk of politics What role do campaign contributions to legislative leaders play in passing S.C. law? Some thoughts:


    “It’s like a shakedown occurs at every step of the way.”

    John Crangle, director of Common Cause South Carolina


    “It’s a business investment, like every other one. ... They’re doing it because they think that it’s going to help them. Because if they’re only doing things for altruism, there are lots of nonprofits.”

    Sue Berkowitz, director of the S.C. Appleseed Legal Justice Center


    “There are some (donors) who don’t want anything. They (just) want you to answer the phone call and tell them what’s the latest thing going on.”

    House Majority Leader Bruce Bannister, R-Greenville

  • Campaign contributions in S.C. Some of the rules

    •  S.C. law limits the amount of money a candidate can raise from a single source. Candidates for statewide offices can raise $3,500 and all other candidates can raise $1,000 from a single source for each race — primary, runoff, special election or general election — in which they have an opponent. (That means a House or Senate candidate, for example, could raise $3,000 from a single donor in one general election cycle.) Unopposed candidates may raise the limit — $1,000 from a single donor for a legislative candidate — only once.

    •  Candidates are required by law to keep records of the name and address of every contributor, the amount and date of receipt for contributions and the occupation of the contributor. However, while the S.C. Ethics Commission’s campaign contribution-reporting forms include a place to enter a contributor’s occupation, candidates are not required to disclose those occupations. Bottom line? The public cannot know how much donors from a particular interest group — whether lawyers, developers or utility executives — give to an individual candidate.


    The ‘Howard Rich loophole’

    There are legal ways to get around the state’s limit on campaign contributions.

    One way is to give the maximum amount — $1,000 per contested primary, runoff and general election — through several different corporations. That’s possible because state law considers corporations to be the same as people.

    Take the example of Howard Rich, a wealthy real-estate investor. Using multiple limited liability companies with addresses in New York and Pennsylvania, Rich gave members of the S.C. House and Senate $137,000 between October 2008 and November 2012. He also has given to candidates who ran unsuccessfully for the House and Senate.

    Some lawmakers say the loophole gives Rich, known for his support of the private-school choice movement, too much influence in the Legislature.

    Exploiting the loophole “would not take an out-of-state person or corporation that long to figure out,” said House Minority Leader Todd Rutherford, D-Richland.

    But House Majority Leader Bruce Bannister, R-Greenville, said recipients of Rich’s donations “have paid a political price” because “the perception to the public is they’ve sold out to that particular influence.”

    “Once that comes out, it just doesn’t look good,” he said.

  • Rising in the ranks and fundraising Lawmakers who recently rose to leadership roles with the most influence in the State House have seen increases in their campaign contributions. A look at the leaders on the rise:

    Rep. Bruce Bannister, R-Greenville — Attorney; member of the House, 2005-present; December 2012, elected House majority leader

    Sen. John Courson, R-Richland — Senior vice president, Kennan and Suggs (insurance); senator, 1985-present; March 2012, elected Senate president pro tempore

    Sen. Larry Martin, R-Pickens — Human resources executive, Alice Manufacturing (textiles); House, 1979-92; Senate, 1993-present; March 2012, named Senate Judiciary committee chairman

    Rep. Todd Rutherford, D-Richland — Attorney; House,1999-present; January 2013, elected House minority leader

    Sen. Nikki Setzler, D-Lexington — Attorney; Senate, 1977-present; November 2012, elected Senate minority leader

    Rep. Brian White, R-Anderson — Agent, Capstone Insurance Services; House, 2001-present; May 2011, named chairman of the House Ways and Means Committee


    More power, more money
    How the six legislators fared in raising donations
    Lawmaker, post 2008 2009 2010 2011 2012 through mid-2013
    Bannister, House majority leader as of December 2012 $13,855 $32,900 $56,263 $7,350 $29,774 $30,175
    Courson, Senate president pro tempore as of March 2012 $39,270 $33,825 $10,400 $38,655 $235,914 $8,775
    Martin, Senate Judiciary chairman as of March 2012 $86,489 $8,277 $8,738 $34,349 $125,394 $7,705
    Rutherford, House minority leader as of January 2013 $4,900 $3,025 $8,939 $4,150 $6,949 $17,100
    Setzler, Senate minority leader as of November 2012 $144,626 $7,400 $46,850 $41,699 $206,354 $34,750
    White, House Ways and Means chairman as of May 2011 $23,650 $40,375 $29,025 $75,575 $64,250 $35,250

    SOURCE: State Ethics Commission filings

Shortly after he was elected the S.C. Senate’s new president pro tempore in 2012, John Courson saw his campaign re-election coffers explode.

By year’s end, Courson had raised $235,914, six times the Richland Republican’s highest previous fund-raising total for a year.

Asked whether his rise to the Senate’s agenda-setting leadership role contributed to that six-fold increase, Courson demurred. Instead, Courson said he was able to collect so much more in donations because he faced a Democratic general election challenger — who Courson beat handily, 59-38.

“Nobody is knocking on my door as we speak to give me a campaign contribution,” Courson said. But, he added, “The people that are engaged in government ... understand the fact that I am the leader of the Senate, and they’re deferential to me.”

Courson isn’t alone in receiving that deference.

Climbing the leadership ladder in the S.C. General Assembly pays fund-raising dividends for powerful lawmakers, according to campaign finance reports filed with the S.C. Ethics Commission.

The State analyzed campaign finance reports filed from 2008, the earliest full year on file with the state, until mid-2013 for 14 members of the Senate and House who recently were elevated to new leadership positions.

That review found contributions increased substantially — up to more than 500 percent — for six members elevated to powerful leadership roles in the committees that oversee state spending and laws, and the Legislature’s political caucuses. (Most of the remaining new leaders — who oversee less powerful rules, ethics and invitations committees — saw their contributions stay roughly the same or, in some cases, drop.)

The new leaders of the House Republican and Democratic caucuses, for example, saw significant fund-raising spikes after rising to new posts.

The average monthly campaign contributions that House Majority Leader Bruce Bannister, R-Greenville, and House Minority Leader Todd Rutherford, D-Richland, took in grew by 103 percent and 322 percent, respectively, after the two took their new posts in December 2012 and January of this year, respectively.

Bannister and Rutherford aren’t alone.

State Sens. Larry Martin, R-Pickens, and Nikki Setzler, D-Lexington, saw their 2012 fundraising totals top 2008 — their last election year — by more than 40 percent. The 2012 increases coincided with Martin’s rise to chairman of the powerful Senate Judiciary Committee in March of that year and the months leading up to Setzler’s much-expected elevation to Senate minority leader in late 2012.

Legislators often downplay the relationship between campaign contributions and what goes on at the State House. The limits that state law places on campaign contributions damp down the influence of money on the political process, some say.

Critics counter the connection between money, leadership and the legislative process is undeniable — donors do not give without, at the very least, expecting to have an audience with lawmakers.

Money buys access, if not support, said Sue Berkowitz, executive director of the S.C. Appleseed Legal Justice Center, a group that lobbies lawmakers on behalf of the state’s poor and low-income residents but is barred, as a nonprofit, from giving campaign contributions.

Leaders of key committees and caucuses — who decide what legislation is considered by the General Assembly — are beneficiaries of groups vying to control legislation through their donations, political observers say.

“It incredibly enhances a person’s fundraising ability to be in any leadership position,” former state Sen. Phil Leventis of Sumter, a 16-term Democrat who did not seek re-election in 2012, said of the interest groups trying to influence legislation.

The process also puts pressure on donors, said John Crangle, director of Common Cause South Carolina.

Throughout the legislative session, numerous fundraising invitations go out, sometimes in lockstep with bills moving through committee or ready to hit the House or Senate floor, Crangle said.

“It’s like a shakedown occurs at every step of the way,” Crangle said. “Special-interest groups feel they have to (contribute).”

Seniority rules

New Senate leader Courson explains his fund-raising prowess differently.

Courson said he has the ability to raise money statewide from a network of donors that he has cultivated since campaigning for Ronald Reagan and Strom Thurmond.

In fact, Courson said he was disappointed that network only yielded $235,914 for his 2012 campaign against well-funded Democratic challenger Robert Rikard. Courson said he thought he should have raised more from the business community.

Raising $250,000 is a feat, but Courson’s Senate leadership position got him halfway there with little work, said Crangle, the Common Cause director. “(Courson) could have stayed in bed all that time, and he still would have gotten over $150,000 from the special-interest groups” for his re-election.

Courson is raising money more slowly this year than in previous non-election years. But the slight drop, in Courson’s case, means very little, Crangle says. Courson occupies one of the three most powerful leadership positions in the state and will be able to draw financial support whenever he needs it, Crangle said.

Republican legislative leaders aren’t the only ones to benefit from the fundraising clout of power.

Democrat Setzler was assistant to Senate Minority Leader John Land, D-Clarendon, who did not seek re-election in 2012, before being elected the Democrats’ Senate leader.

Setzler’s campaign contributions reflect his rising influence. The Lexington senator raised $206,354 for his 2012 campaign against Republican Deedee Vaughters, backed by Gov. Nikki Haley. That was nearly $62,000 more than Setzler raised for his 2008 race, where he also faced a GOP challenger. (Setzler took more than 60 percent of the vote in both races.)

Setzler is continuing his fundraising momentum this year, raising $34,750 from January through May, increasing his monthly average by nearly 80 percent compared to previous non-election years.

‘Great to have friends’

Following his rise to chairman of the Senate Judiciary Committee, state Sen. Larry Martin posted his third- and fourth-best fundraising months since 2008.

The target of an ad campaign funded by anonymous groups in his November race against petition candidate Rex Rice, Martin ended up raising $125,394 in 2012, 45 percent more than he raised in 2008, when he had a GOP primary challenger.

Thus far this year — an off-year for elections — Martin is averaging $1,284 a month in contributions, about 80 percent more than he raised in similar years. The money is flowing in without his active solicitation, Martin said.

“I refuse to do this continual campaigning,” Martin said. “It can tend to blur the lines between my soliciting campaign contributions and the interactions we might have on the issues” in the Legislature.

Martin’s campaign reports show how being a senior member of the Senate and Judiciary chairman makes it easier to attract contributions.

Lawyers and legal associations gave nearly three times as much money to Martin — at least $14,825 — after he became Judiciary Committee chairman, based on The State’s analysis of records where donors’ occupation could be identified. (While state ethics law requires legislators to maintain contributors’ occupations, they are not required to disclose donors’ jobs and many do not.)

Martin also raised $16,500 from 17 electric co-operatives from around the state. Any legislation affecting those co-ops would flow through Martin’s Judiciary Committee, the Pickens Republican said.

But that was not the reason the co-ops supported him, Martin said. Instead, Charles Dalton, Martin’s longtime Pickens friend and chief executive of Blue Ridge Electric Cooperative, said he rallied his friends to support Martin, who was under attack.

“We had to make sure that we had folks across the state (who) knew what a good person he was and a good job that he’s doing,” Dalton said. “You tend to have friends within your industry. I’ve had friends in the co-op.”

All but one of the co-ops gave the maximum amount permissible — $1,000 per election.

Legislators insist that the low, $1,000 contribution limit curbs the influence of money in S.C. politics. But critics say that donors can sidestep the limit by bundling contributions to deliver larger sums or having an industry focus campaign contributions on targeted legislators.

“One $1,000 contribution might not (have a great impact),” said Berkowitz of the Appleseed Legal Justice Center. “But when a whole industry comes together and you see one company give to a lot of legislators, or one industry spreading contributions around,” the result is different.

“Instead of writing a big check, you become a bundler,” delivering $1,000 checks to legislators from dozens of donors that the bundler has solicited, said Winthrop University political science professor Scott Huffmon said, adding, “It’s great to have friends.”

Bucking the trend

The lawmakers who chair the House and Senate Judiciary committees and the Senate Finance and House Ways and Means committees are the Legislature’s most powerful chairmen. That’s because all bills that change state laws or spend state money go through those four panels, and laws and money interest most interest groups and industries.

And that power can translate into added fundraising clout.

For example, annual contributions to state Rep. Brian White jumped to more than $75,000 in 2011, the same year the Anderson Republican was elected chairman of the House’s Ways and Means Committee. That increase, more than doubling White’s 2010 donations, came despite the fact that the chief state budget writer in the House did not face opposition in 2012.

But not all newly powerful legislators see a fundraising windfall.

State Rep. Greg Delleney, a Chester Republican and attorney, has received only one contribution from an attorney since becoming chairman of the laws-writing House Judiciary Committee in December.

Delleney said he does not hold fundraisers and seldom asks for campaign contributions — something his peers find strange. “I have lawyers, I have friends of mine, who have said, ‘You haven’t asked me for any money,’” Delleney said.

Delleney said he does not need the money; he has not faced opposition since 2002. “If I have an opponent, I will actively solicit campaign funds.”

Meaning of money

Money flowing to a powerful legislator does not mean that lawmaker is on the take, said former state Sen. David Thomas, a Greenville Republican who lost his re-election bid in 2012 after 14 terms.

Instead, Thomas said, legislative committee chairs are the logical leaders for special-interest groups to go to if they hope to influence legislation. A “special interest isn’t always bad,” he added. “It probably covers the gamut of the population.”

Donations are a way for interest groups to show lawmakers appreciation for treating parties fairly through the legislative process, Thomas said.

A $1,000 contribution is not “some kind of bribe,” he said. “That’s why the numbers (limiting contributions) are kept so low. That’s why you’re having to work real hard, making phone calls and begging and pleading with people (for donations).”

In fact, Thomas said, a lack of campaign contributions could show that committee chairs are not helping special interests.

“Anything less than that pattern would really demonstrate something very interesting,” Thomas said, referring to a chairman not receiving contributions from interests whose bills move through his or her committee. “It might demonstrate that that chairman is not doing his job.”

But Thomas quickly added another possible explanation: A lack of financial support could mean a lawmaker is not a special interest’s “boy” — “You’re not rubber-stamping legislation.”

Working for the caucus

State Reps. Bannister, a Republican, and Rutherford, a Democrat, said their new roles as leaders of their respective parties’ House political caucuses have increased their media exposure and party fundraising responsibilities, leading to more contributions coming their way individually.

The new roles also have increased the flow of those interested in influencing legislation.

“It would be wise for groups to come talk to me, and they do,” said Rutherford, whose caucus job includes assessing the position of House Democrats on proposed legislation and building consensus.

The new positions of power also are making a fund-raising difference for the two caucus leaders.

Through July of this year, for instance, Rutherford has collected more than $17,000 in campaign contributions, topping his annual fund-raising total in any of the five previous years. (Rutherford’s previous high was $8,939 in 2010, when he won 88 percent of the vote in defeating a Green Party challenger.)

Why the increase?

“This year, I have to go to every event. I have to attend when we (House Democrats) do tours. I have to send thank-you letters,” said Rutherford.

House Majority Leader Bannister raised $30,175 in the first six months of this year, slightly more than the $29,774 that the Greenville Republican raised in 2012 to defeat a Green Party challenger. At his current pace, Bannister could raise more money this year, with no election, than the more than $56,000 he raised in 2010, when he faced a Democratic challenger.

Bannister, leader of House Republicans, said donors and interest groups engaged in the legislative process expect to hear from him.

In exchange for support, Bannister said he fills donors in on what is going on in the State House, satiating their interest for news from the governor’s office to the state treasurer and elsewhere in state government.

“There are some who don’t want anything,” Bannister said of donors. “They (just) want you to answer the phone call and tell them what’s the latest thing going on.”

Not for ‘altruism’

Common Cause’s Crangle doesn’t buy that explanation.

Legislators are being coy if they downplay their relationship with donors, acting like “this is a hands-off operation — like a hand from heaven, it just comes down on them,” said Crangle.

That is especially true for legislative leaders, who control what bills advance and have ways to “sabotage” a bill if they want to block it, he said.

Berkowitz of Appleseed Justice says she has seen the impact money can have on legislation.

“Payday lending was the ultimate example of that,” she said. “During the last payday-lending fight, lots of money went to campaign donations and to hire lobbyists who have influence.”

Still, Berkowitz said, “There will be times when legislators will take money and say, ‘No, I can’t vote for you.’ It’s a business investment, like every other one.”

But, she added, the people who give donations are “doing it because they think that it’s going to help them. Because if they’re only doing things for altruism, there are lots of nonprofits (they could give to).”

Reach Self at (803) 771-8658.

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