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State House for Sale: SC ethics law a muddled mess

abeam@thestate.comOctober 6, 2013 

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    State House for Sale

    A continuing series in The State

    Today: When S.C. politicians get in trouble, invariably it is over how they spend campaign money.

    Part of the problem? Three groups tell elected officials what is legal and what is illegal.

    Another problem? Those three groups do not always agree. What’s forbidden in the S.C. House, for example, may not be banned in the Senate, which has intentionally vague rules that it says may vary from district to district.

    Another flaw? The ethics system depends on politicians to police each other. “Senators,” for example, “are going to be biased in favor of their own,” says a critic.

State Rep. Grady Brown raised more than $21,000 for his 2012 re-election campaign, spending it on radio advertisements, get-out-the-vote efforts – and season tickets to USC football games.

South Carolina’s ethics law — passed in 1991 after 17 lawmakers were indicted on charges of accepting bribes — says lawmakers only can use campaign money for “ordinary expenses” that are part of a lawmaker’s “duties as a holder of elective office.”

Brown, D-Lee, justified the $730 football purchase by saying the tickets were “to be used by constituents.”

The House Ethics Committee says purchases like that violate the state’s ethics laws, as does the State Ethics Commission. But the Senate Ethics Committee disagrees, saying constituent gifts and charitable donations are “a longstanding function of elected officials, especially members of the Senate of South Carolina.”

While South Carolina has strict rules on who can donate to political campaigns — and how much they can give — state law has little to say about how legislators can spend that money. And what it does say is in dispute.

Three separate entities — the State Ethics Commission and the House and Senate ethics committees — interpret the state’s ethics law, and all have different opinions on what it says about how elected officials can or cannot spend campaign money.

Brown told The State newspaper that he has stopped using his campaign account to buy USC football tickets because “it was an area I wasn’t completely sure on.”

“I never was questioned about it. The more things began to become scrutinized, I just said, ‘Well, I’m not going to do it anymore,’” he said. “People wonder why you do certain things.”

There is good reason for caution.

Last year, Lt. Gov. Ken Ard, R-Florence, resigned and entered a guilty plea to charges that he, in part, misspent campaign money on gifts for his family. In June, state Sen. Robert Ford, D-Charleston, resigned during a Senate Ethics Committee investigation into allegations that he spent campaign money on personal expenses.

House Speaker Bobby Harrell, R-Charleston, also is the subject of an ongoing SLED investigation into why Harrell reimbursed himself hundreds of thousands of dollars from his campaign account – reimbursements Harrell says complied with the law.

The sums involved in legislative campaigning are not small.

S.C. legislators said in their ethics filings that they had spent $12.5 million campaigning during their last elections — a period covering 2009-12 for the Senate and 2011-12 for members of the House — and the first two quarters of 2013. Included in that total was almost $387,000 that legislators said they used to reimburse themselves for expenses and $287,000 that they spent on gifts or gave to charities.

The numbers come from the previous election cycle for the Senate, 2009-12, and the House, 2011-12, in addition to the first two fundraising quarters of 2013.

Critics say South Carolina needs to follow the lead of 26 other states and have one independent ethics commission set the rules for all political candidates. But most lawmakers say that would violate the state’s Constitution. And, they add, they have done a good job of policing themselves, an assessment disputed by others.

Gifts banned? No, yes, yes

How unclear are state ethics laws?

Consider just one question: Can a candidate or lawmaker use campaign money to buy gifts?

The Senate Ethics Committee says yes. State law governing how lawmakers can spend their campaign money “is intentionally broad” so “the determination whether a particular expense is permissible is by design left largely to the discretion of the Member,” the committee has said.

“The spirit of it requires you to make these decisions according to whatever your moral compass is,” said state Sen. Luke Rankin, R-Horry, chairman of the Senate Ethics Committee.

The State Ethics Commission, which governs statewide candidates and local government candidates, disagrees. Using campaign money to buy gifts is illegal, it says.

“The purpose of campaign contributions is solely to assist the candidate getting elected. It’s not to garner goodwill by sending out birthday wishes or buying wedding presents,” said Herb Hayden, executive director of the Ethics Commission. “That’s pretty much been the commission’s position for 25-plus years.”

The House Ethics Committee agrees: Gifts are forbidden.

That committee has attempted to define how state representatives can spend campaign money. In 1996 – four years after the state’s ethics law went into effect – the committee issued a “laundry-list opinion” designed to serve as general guidelines for what candidates for the House and state representatives could and could not spend money on.

Among other things, the memo banned using campaign money to:

• Buy gifts, flowers, etc., for constituent’s weddings, high school and college graduations

• Buy gifts or pay bonuses to legislative office staff

• Pay fines and penalties received as a result of holding a legislative post

• Buy flags for individuals

• Make contributions to charitable organizations, including churches

But that “laundry-list opinion” was not an official advisory opinion. And several of the guidelines have been changed.

In 1995, the House Ethics Committee started cracking down on campaign expenses after an opponent complained Rep. Brown was using campaign money to buy fruit baskets for people. That’s improper, the committee decided. But Brown objected and fought back.

In 1997, the committee reversed itself. It said lawmakers could buy fruit baskets for constituents but only if the fruit basket displayed the politician’s name.

That way, the fruit basket was an advertisement, not a gift, the Ethics Committee said.

Today, Brown continues to spend $1,600 every Christmas to buy fruit baskets as gifts for people in his district who, he said, are in need, including the elderly and the poor.

“Anytime you do something to help people out, you do it for the good it does and not for the good it does politically,” Brown said.

But would Brown continue to buy fruit baskets if he were not a politician? “I doubt if I would,” he responded, adding he donates to his church, which uses donations for charitable purposes.

Other House ethics guidelines can be confusing.

In 1995, the House committee said lawmakers could not use campaign money to buy Christmas gifts for the custodial staff in the House office building because they were state employees. In 2006, the ethics panel issued a memo saying “it is possible that the Committee would reconsider its decision.” Since then, lawmakers routinely have used campaign money to buy Christmas gifts for the custodial staff.

•  In 1992, the House Ethics Committee ruled lawmakers could use campaign money to buy flags for individuals. But the 1996 “laundry-list opinion” says lawmakers can’t do that. Some lawmakers do nonetheless. For example, state ethics filings show Rep. Ralph Norman, R-York, used campaign money to buy a Confederate flag for a constituent’s grandson to add to his flag collection.

Permitted in one district, banned in another?

Meanwhile, the Senate Ethics Committee always has allowed senators to use campaign money to buy gifts and make donations to charities in their district.

The Senate uses the “but for” test when determining if an expense is appropriate. “But for my position in the Legislature, would I have this expense?” If the answer is “no,” then, generally, the expense is OK.

In an advisory opinion issued June 3, 1997, the Senate Ethics Committee said lawmakers could give campaign money to “churches, schools, colleges, universities, communities, families in dire situations, political parties, (and) protecting historical landmarks,” arguing those types of expenses are “a longstanding function of elected officials, especially Members of the Senate of South Carolina.”

“The Public of this state expects, and in many cases demands, that Members participate in various functions that benefit the aforementioned groups,” said the opinion, signed by the Ethics Committee.

That opinion has allowed state Sen. Hugh Leatherman, R-Florence, chairman of the Senate Finance Committee, to spend nearly a quarter of his $419,000 in campaign money on gifts and donations since 2009. Included in those purchases were nearly $40,000 worth of hand-painted decorative ornaments from Ne’Qwa Art in Texas described on ethics filings as “constituent gifts” and “Christmas ornaments.”

Since 2009, state Sen. John Matthews, D-Orangeburg, has spent 42 percent of his $68,000 in campaign-fund expenses on gifts and donations, including $7,285 for “banquet tickets” for various events, $1,345 for birthday gifts for 24 constituents and $750 for graduation gifts for 19 constituents.

(Attempts to reach Leatherman and Matthews for comment were unsuccessful.)

The Senate’s largesse dates back to 1993, when the Senate Ethics Committee said it is up to “each individual member, rather than this committee,” to determine what campaign expenses are “ordinarily incurred” as part of holding public office. The opinion, written by then-Ethics Committee chairman Leatherman, goes on to say “what may be an ‘ordinary expense’ in one district or area of the state may not be viewed as an ‘ordinary expense’ in another.”

That geographic disclaimer allowed state Sen. Darrell Jackson, D-Richland, to spend $648 in campaign money for USC season football tickets in 2009 and stay within the rules, as defined by the Senate.

“Williams-Brice (Stadium) is in my district. I’m the only senator (with it) in my district,” said Jackson. “I did view it as an opportunity for me to go and interact with constituents and others.”

But, Jackson added, he has not used campaign money to buy football tickets since 2010, mostly because he does not have time to go to the games because of his duties as a legislator and pastor.

While the Senate Ethics Committee gives senators lots of discretion when it comes to spending campaign money, senators must disclose how they spend campaign money.

The committee said “public disclosure of these expenses should provide adequate limitations on unreasonable or inappropriate expenditures.” It added: “In those instances that present a close question, the member would be wise to not make the expenditure.”

Who’s policing who

Critics say lawmakers have no business policing themselves when it comes to campaign spending.

They argue an independent commission — not the Ethics Commission, appointed by the governor, or the House and Senate Ethics committees, made up of lawmakers — should oversee all political candidates, whether running for local government, statewide office or the State House.

“(Independent) commissioners have nothing to gain by use of campaign money, so they tend to make more detached decisions,” said John Crangle, executive director of Common Cause and a lobbyist who was heavily involved in the 1992 Ethics Reform Act. “The commission view is going to be more objective, and senators” — for example — “are going to be more biased in favor of their own.”

Earlier this year, House lawmakers considered a bill that would have created one ethics commission — with no lawmakers on it — to oversee all politicians, a system used in 26 states. But the idea was scrapped because a majority of lawmakers, citing a recent state Supreme Court opinion, thought it would violate the separation-of-powers doctrine in the state’s Constitution.

Instead, lawmakers proposed a joint House-Senate committee to oversee state lawmakers, while the State Ethics Commission would continue to regulate everyone else. The bill stalled in the final weeks of the legislative session. However, lawmakers are scheduled to continue that debate in January.

A special Senate committee, led by Sen. Rankin, is scheduled to meet next week on the ethics bill. Rankin said he is open to the idea of having a joint legislative committee to oversee House and Senate members but downplayed the need for an independent commission to govern lawmakers.

“We police ourselves well,” Rankin said, citing the Senate Ethics Committee’s recent investigation of Sen. Ford, who resigned under pressure from the panel, as an example. But, Rankin added, “Perhaps we can and should police both groups (the House and Senate) collectively.”

Some bans easily evaded

Whether that will happen is unknown.

The ethics bill is politically charged. While both candidates for governor — Republican Gov. Nikki Haley of Lexington and Democratic state Sen. Vincent Sheheen of Camden — advocate for ethics reform, it is possible the bill could be delayed again.

Some changes already have been made.

Last year, the GOP-controlled House overhauled its ethics committee, transforming it from one dominated by Republicans to a bipartisan panel with 10 members, five Democrats and five Republicans. No one on the new committee ever has been on an ethics committee before, and its new chairman, Rep. Kenny Bingham, R-Lexington, said changes could be coming soon.

“By and large, all three (ethics committees) should be the same, in terms of the type behavior you can have, and I’m working to try to fix that,” Bingham said. “I believe ours should be, if not identical (to the Senate), then darn close.”

For example, the House Ethics Committee does not allow lawmakers to use campaign money to pay ethics fines. But the State Ethics Commission does.

Critics say allowing lawmakers to use campaign money to pay ethics fines make violations painless to the politicians who break the law.

For example, the State Ethics Commission fined Haley $3,500 in July for not reporting the addresses of eight donors during her 2010 campaign for governor. Haley paid the fine from her multimillion-dollar campaign account, something she could not have done as a state representative.

Bingham seems to favor the State Ethics Committee rule that allows candidates to pay ethics fines from campaign money.

“Now that you can have fines of up to $5,000 ... and you have no personal resources to do that, we’re going to go back and look at that,” said Bingham, adding he has “already had dialogue started among committee members” about the issue.

But Bingham does not appear ready to change the House ban on buying gifts for constituents or donating to charities.

Still, the Lexington Republican acknowledged, most House members, including himself, easily can get around those bans.

Bingham, for example, says he contributed campaign money to Turner AME Church’s 100th anniversary service. Because the church publicized his donation in its bulletin, Bingham says he considered it a paid advertisement and, as such, permissible under state law.

“What we have generally said is: ‘If you just wrote pretty Baptist church $500 just for their budget with nothing else there, we would say that is not allowed, and we have held to that standard,’ ” Bingham said.

There are no such concerns in the Senate, which permits candidates and senators to use campaign money for gifts.

Three years ago, for example, Carrie Sinkler needed a kidney transplant, so she sent her state senator a letter asking for money.

Sen. Jackson, who pastors a large Baptist church in Columbia, sent Sinkler a letter and $50 from his campaign account.

“I was thrilled. And surprised,” Sinkler said, adding she still has never met Jackson and did not know that his donation came from his campaign account. “That $50, among other donations, was a big help.”

Reach Beam at (803) 386-7038.

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