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SC politicians, lobbyists and more owe $2.4M in ethics fines, but many will never pay

The Hampton County Democratic Party owes $37,300 in ethics fines, but the state is probably never going to get the money.

The party, which hasn’t raised any money since 2008, racked up the fines for failing to file six financial disclosure forms between 2009 and 2010.

“We’ve been working on trying to get that stuff resolved,” Hampton County Party Executive Committeeman John Polk said of the fines. “Some of this stuff is ridiculous with the prices and fees they add on...It’s a lot of stuff that can be cleared up with a few phone calls and letters.”

The Hampton County Democratic Party is one of the 337 candidates, political parties and lobbyists who owe the state ethics commission a total of $2.4 million in fines — many of which will likely never be collected.

“The Ethics Commission has limited legal tools to collect from people on the list,” former ethics commission attorney Michael Burchstead said in an email. “Many simply cannot afford to pay the hefty fines. Contacting the filers is also a big issue. I have seen dissolved corporations and dead candidates on that list, but often someone changes their address and despite best efforts the agency is unable to contact them.”

For example, former Richland 1 School Board candidate Torlando Childress owes more to the ethics commission than anyone else — $212,945.28 for a 2009 violation for failing to file a campaign disclosure form. In a separate 2011 case he was sentenced to 18 months in prison for after he pleaded guilty to embezzling $300,000 from a local bank.

His ethics fine is what accountants call “bad debt,” or debt that’s unlikely to be recovered.

Like Childress, more than half of those who owed fines eight years ago still owe the ethics commission money, even though many large fines have been reduced, according to ethics commission data and a 2011 article from The State that included the full list of debtors.

Many of the fines are for failing to file statements of economic interest or campaign finance reports. These forms, required of all candidates and political parties, show who donates to a campaign, how the money is spent and whether candidates have any conflicts of interest.

Last year, the state ethics commission tried to collect on all of the debts it was owed but received only $104,238.39, according to the Department of Revenue, which is charged with collecting debts owed to state agencies.

“We’re trying to collect from everyone using the means given,” said S.C. Ethics Commission Executive Director Meghan Walker.

The Department of Revenue wasn’t able to collect more money because either the debtors didn’t have enough money to pay the fines or the department couldn’t find the debtors, spokeswoman Bonnie Swingle said.

The revenue department collects money owed by garnishing wages, tax returns and levying bank accounts, according to the department’s website.

A few years ago, the commission had an informal meeting with Columbia debt collection attorney Ed Grimsley to discuss the possibility of using a private debt collector. However, ethics committee staff recommended against using private debt collection services, because if the ethics commission switched to a private debt collector, the agency would no longer be able to collect debts through the Department of Revenue, Walker said.

Grimsley told The State it wouldn’t be hard to collect the debts the ethics commission is owed. Once a court rules that a debt is owed, the county sheriff can seize assets, such as a car, to pay the debt, Grimsley said.

“I think the law is pretty clear that they’re due,” Grimsley said. “It’s just like any other effort to collect the debt through a civil court.”

State officials with large and experienced staffs tended to avoid ending up on the list of people who owe ethics fines. More than 80 percent of the outstanding fines are for local government candidates, according to ethics commission data. Around 15 percent of the fines are for lobbyists or the people who employ them (those fines are typically smaller). Only 3 percent of fines were for state-level candidates. Other fines were for local political parties, ethics data show.

“This has been a long-standing problem with local government candidates who run one time,” said John Crangle, a long-time S.C. ethics watchdog.

Sometimes, candidates say they are not aware initially they have to file a form or that they owe money. Richland District 2 Superintendent Baron Davis said he was initially unaware he owed $100 to the ethics commission. After Richland 2 School Board Chair Amelia McKie faced calls to resign for the amount she owes the ethics commission, Davis discovered he failed to file a Statement of Economic Interest and paid the fine without officials needing to contact him, he said at a February school board meeting.

McKie, who owes roughly $52,000 to the ethics commission, owes more than any other currently serving public official in the state, according to ethics data.

Those who owe money to the S.C. Ethics Commission aren’t allowed to take office, S.C. law says. However, the ethics commission has no legal authority to keep an elected official out of office, Walker said.

The ethics commission’s ability to collect on its largest debts, however, may be a moot point. A Feb. 20 U.S. Supreme Court decision in the case Timbs v. Indiana said the constitution’s ban on excessive fines applies to local governments. Crangle and Polk, from the Hampton County Democratic Party, said the more extreme fines owed to the ethics commission are all but certain to be challenged because of the unanimous Supreme Court ruling.

“You can hardly justify $50,000 in fines and penalties for what this school board member has been doing,” Crangle said of Richland 2’s McKie.

Current law says those who fail to file the appropriate forms must pay $10 per report for every day after they’re notified they owe. But after 10 days, that increases to $100 per missing report per day. The commission can also impose a penalty on top of that. Current law caps the maximum fines at $5,000, but until 2011, there was no ceiling to how much one would owe.

But for some, the law still needs a change.

“When you get a $2,000 substantive ethics violation and you get a $5,000 fine for not filing a form, that’s a problem for me,” Burchstead said.

One way to fix this, Burchstead says, would be to have one set of tougher rules for people running for governor, Senate and the House of Representatives and another standard for local government candidates.

“The problems arise because it was a primitive statute,” Burchstead said.

Editor’s note: This story has been updated to reflect that Baron Davis paid a $100 fine but was never listed as a debtor by the S.C. Ethics Commission.

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Lucas Daprile has been covering the University of South Carolina and higher education since March 2018. Before working for The State, he graduated from Ohio University and worked as an investigative reporter at TCPalm in Stuart, FL. There, where he won multiple awards from the Society of Professional Journalists for his political and environmental coverage.