Why Pascoe’s SC corruption probe matters

This is not your father’s State House corruption investigation.

Almost three decades after Operation Lost Trust nailed 17 S.C. lawmakers – most of them small-timers – in a vote-buying scandal, a new probe is shedding light on the State House’s complex power structure, this time targeting some of its biggest players.

The investigation, which already toppled the S.C. House speaker, has begun to pull back the curtain on the messy intersection of politics and business and state government.

At that juncture, powerful lawmakers running unopposed in gerrymandered districts raise tens of thousands of dollars, stockpiling campaign war chests so flush that even the Legislature’s Boy Scouts would be tempted, ethics watchdogs say.

Those legislators in turn hire political consulting firms, some of which also advise companies and state agencies with business before the Legislature. Those consultants advise – and bill – both a stable of lawmakers and a stable of business clients that want something from those lawmakers.

And, of course, some businesses go directly to the source, hiring influential lawmakers on retainer as consultants.

“The public is learning that it’s complicated,” said Lynn Teague, vice president of the S.C. League of Women Voters. “Every ethics issue, every single one boils down to: Are (elected officials) acting in the best interests of the citizens?

“What we are learning is that these complex networks are often why they don’t.”

Picking up steam

The probe, years in the making, has secured a guilty plea from a former House speaker and led to the indictment of two other powerful Republican lawmakers.

It recently implicated an influential GOP consulting firm – Richard Quinn & Associates – with ties to some of the Palmetto State’s GOP elite.

The investigation sprouted from September 2012 media reports questioning then-GOP House Speaker Bobby Harrell’s reimbursements to himself from his campaign account for personal expenses, including the use of his private plane.

After months of legal wrangling, S.C. Attorney General Alan Wilson – a Quinn client – removed himself from the probe, citing possible conflicts of interest. Quinn’s firm was mentioned in a 2013 SLED report on the State House investigation, The State newspaper reported.

After 1st Circuit Solicitor David Pascoe was appointed to the probe, Harrell pleaded guilty in October 2014, agreeing to a plea deal that required him to tell investigators of other lawmakers’ criminal activity.

The probe surfaced again last year when the state Supreme Court overruled Republican Wilson’s attempt to fire Pascoe, a Democrat.

It ramped up last December with the indictment of state Rep. Jim Merrill. The now-suspended Berkeley Republican was accused of using his office to pocket more than $1 million, and working as a de facto lobbyist for businesses that hired him through his public relations company, Geechee Communications.

Last month, state Sen. John Courson, R-Richland, was indicted and charged with funneling campaign money to himself for personal use through the Columbia-based Richard Quinn & Associates.

A firestorm of speculation has followed, stoked by newspaper reports of investigators seizing boxes of that firm’s documents and looking into its ties to the several S.C. businesses and institutions.

Investigators have not charged Quinn, who would not comment for this story. Quinn, Courson and Merrill all have denied any wrongdoing.

‘Eve’s apple’

While the probe’s scope and direction remain unclear, ethics watchdogs say it already is exposing the system’s flaws.

One of those, some contend, is that powerful legislators in gerrymandered districts raise tens – sometimes hundreds – of thousands of dollars for their re-election campaigns, despite having no opponents.

“They end up in uncontested districts with no opposition, but tons of unused campaign money,” said John Crangle, a longtime S.C. government watchdog. “That becomes Eve’s apple for them. It’s begging them to find a way to put it in their pockets.”

For example, Harrell, the former House speaker, was re-elected 10 times to the House without a Republican ever running against him. He faced general election challengers just twice, cruising to victory in 2000 and 2012.

Still, the Charleston Republican raised nearly $394,000 for the 2008 election, more than $217,200 for the 2010 election, and more than $555,200 for the 2012 election.

Prosecutors said he spent the money, too – some of it to pay costs related to his personal airplane and to reimburse himself for plane trips he never took.

Courson, since 1988, has never faced a primary challenger and has crushed each of his five general election opponents. Still, the Richland Republican raised more than $863,000 over the past three election cycles.

Prosecutors allege Courson abused that money, paying the Quinn firm large amounts of money from his campaign account, then receiving kickbacks for his personal use.

Courson’s attorney has denied those accusations, blasting the indictment as the byproduct of a “partisan witch hunt” targeting Republicans.

‘The smell test’

One use legislators find for that money is hiring political consultants such as Richard Quinn, a GOP institution since founding his firm in 1978.

Those consultants collect stables of politicians. Quinn, for example, has advised S.C. Gov. Henry McMaster, Attorney General Alan Wilson, Treasurer Curtis Loftis, Superintendent of Education Molly Spearman, U.S. Sen. Lindsey Graham, U.S. Rep. Joe Wilson, and some of the most powerful members of the S.C. Legislature.

But some of those consultants, including Quinn, also advise a stable of private companies, state agencies and other special interests who have business before the Legislature.

Watchdogs say that raises red flags about consultants’ objectivity in advising legislators who are supposed to represent the S.C. public.

“I’m not sure with a lot of folks that passes the smell test, quite frankly,” said former Senate Judiciary Committee chairman Larry Martin, R-Pickens, adding he learned only recently that Quinn’s firm also advises private companies, despite having served in the Legislature for more than 35 years.

SLED investigators have looked into some of Quinn’s business ties, including the S.C. Ports Authority’s roughly $2.9 million in payments to Quinn and related firms over an eight-year period.

Aside from legislators, Quinn’s firm has consulted with:

▪  The Ports Authority, which needed lawmakers’ help – and $300 million from the state – to deepen the Charleston Harbor, but on Wednesday, the Ports Authority voted to sever its Quinn ties, including its $8,100 monthly payments to the firm

▪  The University of South Carolina, which relies on S.C. lawmakers for about 10.5 percent of its $1.5 billion budget, and for approval of building projects and new academic programs

▪  SCANA, a Cayce-based utility that benefited from the Base Load Review Act, passed by the General Assembly in 2006, allowing utilities to charge customers for construction projects before they are finished, a law helped pave the way for a now $13.8 billion project to construct two nuclear reactors in Fairfield County

▪  Palmetto Health hospital system, which spent more than $20,400 lobbying the Legislature last year

Most voters’ understanding of government corruption involves quid pro quo agreements – with special interests and politicians trading favors – or outright bribery, said Teague.

Pascoe’s investigation, she said, shows that more prevalent than bribes or quid pro quo arrangements are underground power networks that could affect some legislators’ “independence of thought and action.”

“Lobbyist behavior is disclosed. Campaign contributions are disclosed,” Teague said. “But this whole network is very subterranean from the public’s point of view. We don’t know who all the clients of this one consulting company might be, and we don’t know how their interests are interlocking.

“That makes it more dangerous because it’s more subterranean, less accountable. It’s a transparency issue,” she said.

Straight to the source

As Pascoe’s probe has shown, companies also can hire lawmakers directly – in addition to contributing thousands to their campaigns and hiring lobbyists.

S.C. legislators are paid $10,400 a year, plus expenses and other benefits, necessitating another source of income for many.

Some lawmakers, including Merrill, the suspended Berkeley Republican, are hired by private companies or public agencies as consultants. In some cases, those outfits need the kind of help lawmakers can provide.

Merrill was hit with a 30-count indictment alleging he accepted money to influence government decisions and sponsor legislation for private interests.

One count charged the former House Majority leader with taking $172,485 from a New Jersey-based bus contractor in exchange for sponsoring a failed 2012 bill “regarding legislation to privatize school buses” in the Palmetto State.

Merrill has vowed to fight the charges, which are pending. No trial date has been set.

Ethics advocates said those relationships are common among legislators.

Special interest groups spent $9.3 million last year lobbying the state’s lawmakers. But Crangle, now with the S.C. Progressive Network, said the practice of hiring legislators as consultants is the most dangerous threat to democracy in South Carolina.

“Businesses can hire them on a retainer, with a wink and a nod, expecting some favor in the State House,” he said. “They’re lobbyists, but they’re not in the lobby. They’re in the Senate chamber. They’re in the House chamber.

“That’s the dominant way that special interests control the Legislature,” Crangle added. “It’s not lobbying. It’s by these special relationships they have with legislators.”

This story was originally published April 1, 2017 at 8:23 AM with the headline "Why Pascoe’s SC corruption probe matters."