The Republican Caucus that controls the S.C. House is under increasing scrutiny after the indictment of two of its former leaders on charges they steered caucus money to their businesses.
The leader of the S.C. House Republican Caucus – the House’s Republican majority leader since the mid-1990s – is charged with building consensus among GOP state representatives around a legislative agenda. The majority leader also has controlled the caucus’ finances.
Prosecutors say two former majority leaders – state Reps. Rick Quinn, R-Lexington, and Jim Merrill, R-Berkeley – used that control to steer caucus money to their marketing and campaign businesses.
Current Majority Leader Rep. Gary Simrill, R-York, says he has put in place internal checks and balances to oversee GOP caucus spending.
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But government watchdogs say legislative caucuses – Republican and Democratic, in both the House and Senate – should be required to report all of their finances to the public to prevent lawmakers from abusing their position to enrich themselves.
“Unless the political money can be controlled and regulated much more strictly, you’re going to have continued abuses and going to have indictments from now until doomsday,” said State House watchdog John Crangle with S.C. Progressive Network.
‘Generous interpretation of the law’
The Merrill and Quinn indictments allege the two used the post of House majority leader to direct money to their marketing businesses. Those businesses uniquely enabled the Republicans to profit from legislating, prosecutors allege.
On the one hand, the businesses were retained by businesses and groups with issues before the Legislature – issues the majority leader could use his position to push. On the other hand, the then-majority leaders used their power to steer marketing and campaign business to their firms from the caucus and the GOP representatives they oversaw.
Merrill’s December indictment alleges the Berkeley Republican directed $82,515 from the caucus to his public relations firm while he was GOP majority leader from 2005-08. Meanwhile, groups – including the Charleston visitors bureau – retained Merrill’s firm to ensure they continued to receive state money from the GOP-controlled House.
Quinn’s indictment, issued Tuesday, alleges he failed to disclose contributions and expenditures by the House Republican Caucus’ operating account, allowing the Lexington Republican and his businesses to collect $255,188 from the caucus “without accountability to the public.”
That indictment also alleges firms associated with Quinn were paid $4.6 million by unnamed companies or groups with business before the Legislature, and Quinn “used his public office to influence governmental decisions involving those” groups.
Merrill and Quinn have denied any wrongdoing. Quinn insisted Tuesday his activities already had been reviewed and declared legal by state officials.
“There’s an awful lot of generous interpretation of the law going on at times,” responded Lynn Teague of the League of Women Voters, an advocate for stronger S.C. ethics laws..
The state’s ethics law requires a public official to report money that they, their business or a family member receive from an organization that lobbies the Legislature or a lobbyist, said Teague.
However, she added, “The broad issue of consulting is where an enormous amount of the wiggle room in ethics ... has developed. Very often, we see payments for consulting, and there is no work product at all that’s visible.”
‘Transparency within the caucus’
Simrill says the House GOP Caucus has put in place more oversight to ensure there are not abuses.
For example, Simrill said he enacted a policy requiring two signatures on caucus checks. Now, both the majority leader and assistant majority leader, state Rep. Eddie Tallon, R-Spartanburg, must sign all caucus checks, Simrill said.
Simrill also said he has pushed for the GOP Caucus’ executive committee – not the majority leader – to make major caucus decisions. “I wanted for the majority leader to be more like a CEO position and have a board of directors for accountability.”
The caucus’ executive committee originally was made up of six Republicans: the majority leader, assistant majority leader, caucus finance chair, chief vote-counting whip, the House speaker and speaker pro tempore.
When he became majority leader, Simrill expanded the executive committee, adding five more members – the chairman of the House’s Ways and Means budget-writing panel, the chairman of its Judiciary Committee, two representatives named by the majority leader and another named by the assistant majority leader.
“Internally, what I have done is created accountability and transparency within the caucus,” Simrill said.
‘Public has a right to know’
Simrill’s transparency efforts are “an improvement,” said Teague of the League of Women Voters. “But what we need is full transparency.
“The public has a right to know what the caucuses are up to, where they get their money, where they spend it.”
The House Republican Caucus Committee reports contributions and election donations and expenses made on behalf of Republican candidates.
Currently, The State newspaper is one of several media organizations suing the Republican Caucus for the records it turned over to investigators as part of the ongoing State House corruption probe, including its payments to Rep. Quinn and his businesses.
The State filed suit after caucus attorney Mark Moore denied a Freedom of Information Act request by the paper in April. Moore said he reviewed The State’s request “and the applicable law” and concluded the “requests are not appropriately directed” to the caucus.
While the caucus contends it is a private organization – exempt from the state’s public-records law – Teague and others say it is a public body. “They use a public space and they perform a public function.”
In addition, “disclosure is crucial” to prevent lawmakers from steering caucus money to their businesses, Teague said.
Longtime government observer Crangle said the General Assembly’s caucuses need to be strictly regulated, including banning them and lawmakers from raising campaign money in years when there are no legislative elections.
“Something’s got to be done to stop the caucuses from raising political money,” Crangle said, saying the caucus funds “really are little more than slush funds.”