WHILE reform groups were fixating over House Speaker Bobby Harrell’s flight records, legislative candidates were competing to propose the toughest ethics reforms and Sen. Jake Knotts was spinning his public reprimand as a “clean audit” of his campaign records, the Senate Ethics Committee last month quietly issued its second-ever such reprimand — and, thanks to a Knotts-inspired reform, its first-ever serious fine.
Ethics reform is the it issue on the campaign trail thanks to the disaster of former Lt. Gov. Ken Ard, a groundbreaking national study that named South Carolina the nation’s sixth most corruptible state, the off-again-on-again-off-again investigation of Gov. Nikki Haley’s efforts as a House member on behalf of her private employers, and now questions about the skimpy details Mr. Harrell gave for $280,000 he reimbursed himself from campaign funds, mostly for flights on his own plane.
Contrary to critics’ protestations, there has so far been nothing to indicate that the governor or the speaker violated the law. That’s because the law is so forgiving.
A forgiving law isn’t precisely the problem in the case of Sen. Kent Williams, but his public reprimand points to another significant shortcoming in our ethics and campaign finance law that isn’t getting much attention. Left uncorrected, it could greatly diminish the value of any new reporting requirements the Legislature passes, leaving them dependent on the honesty of the candidates filing the reports.
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According to the Senate Ethics Committee, Mr. Williams accepted 15 contributions in excess of the legal maximum of $1,000 for this year’s election. It ordered him to return the extra $12,801 and pay a $5,390.05 fine. The Marion County Democrat, who is running unopposed for his third term, did not contest the charges.
Ten of the illegal contributions were straightforward violations that anyone who looked closely at his campaign reports would have noticed, and probably the result of bad record keeping. But in five cases, Mr. Williams reported that he received two $1,000 checks on the same day from the same donors — one for the 2012 race and one to pay down a 2008 campaign debt — but used all the money for his 2012 campaign. The panel called these “deliberate attempts to mislead the public,” noting that to anyone looking at those reports, “it appears” that the donations were legal.
It’s Mr. Williams’ apparent compliance with the law that makes this case so worrisome. The Ethics Committee discovered the ruse because its attorney noticed that the senator wasn’t reporting enough outstanding debt to justify the repayments; he asked for bank records, which showed the payments hadn’t been made.
It was similar serendipity that led to the reprimand against Mr. Knotts for accepting illegally large donations, misreporting the identities of some donors and not reporting others, and not reporting some expenditures. In that case, it was what appeared to be, but wasn’t, excessive interest income that raised the attorney’s suspicions, leading him to ask for the bank records that revealed unrelated violations.
There was nothing on the reports themselves that would have alerted even the committee attorney to the illegal donations. And the Senate committee is the only enforcement agency that so thoroughly reviews all reports. The House Ethics Committee and State Ethics Commission don’t have the staff to do that.
Senate Ethics Chairman Wes Hayes reminded me Thursday that the Knotts investigation had been the catalyst for the Senate rules change that opened ethics investigations to public scrutiny; the House finally followed suit this year. It also prompted the Senate to let the panel impose fines for substantive violations of the law, which it had no authority to do against Knotts.
But neither the Senate nor the House has done anything to address the enforcement problem that the Knotts case brought into such stark relief and the Williams case reminds us of: Enforcement of the ethics law is based largely on the assumption that the reports are accurate.
“You have to kind of take what’s reported as true,” Mr. Hayes said. “We don’t go back and pull the bank records unless somebody complains or we pick up on something that just doesn’t look right. So there may be a lot of stuff that goes undiscovered.”
The obvious fix: Require ethics enforcers to conduct random audits — of the sort that the IRS does on taxpayers to see if they’re claiming bogus deductions or leaving off income — to make sure that all the money that flowed into and out of the campaign account was reported, and to match up names on the reports against bank records. That won’t ensure that we catch everyone who violates the law, but we’ll give everyone a little more incentive to obey it.
A final note: While the Ethics Committee was working on the Williams reprimand, Sen. Knotts was sending out campaign mailers bragging about how he “personally requested an audit of his own campaign expense reports” for which he “Received clean audit.” Which is a strange way of describing an audit that resulted in the Senate Ethics Committee’s first public reprimand ever, and new rules lifting the veil of secrecy from ethics complaints and allowing the panel to impose fines of the sort that Sen. Williams is now paying.
Ms. Scoppe can be reached at email@example.com or at (803) 771-8571.