Wine and dined: How big businesses pamper our lawmakers
A state lawmaker, now running for statewide office, says his former $400,000-a-year job as the chief executive of an organization that lobbies state government had nothing to do with lobbying.
Another lawmaker, paid $46,099 a year as an attendance supervisor in his county’s school districts, negotiated and voted on a bill that would have affected those districts directly.
It’s a tricky two-step, being a S.C. lawmaker.
State lawmakers receive taxpayer-funded salaries as office holders.
Many also work day jobs, earning a living as attorneys, corporate executives or employees of the state and local agencies directly affected by the spending and policy decisions that legislators make at the State House.
When those dual roles – the public official and the private breadwinner – collide, conflicts arise that call into question whose interests the lawmakers are protecting. More questions arise when lawmakers’ decisions affect the employers of their spouses or children.
The potential for conflict is extraordinary.
Recognizing that, legislators decided to require they disclose more about their personal finances, including who employs them when they are working in the private sector. Last year, legislators made those expanded disclosures for the first time.
A State newspaper analysis of lawmakers’ those disclosures found:
▪ In 2016 alone, the 170 members of the state General Assembly said they and their immediate family members were paid more than $8.2 million as legislators or employees of state and local governments, including schools. That sum includes about $5 million in legislative salaries and expense allowances.
▪ Additionally, lawmakers reported they and their families were paid $1 million by special interests that lobby the State House.
▪ The 43 lawyers in the Legislature reported their firms were paid an additional $5.4 million to represent clients in lawsuits against the state or before state commissions or boards. Legislators have a say in who serves on those boards, sometimes electing or confirming their members.
▪ Legislators also were lavished with gifts valued at $279,000 – including Heritage Golf Tournament passes and tickets to college sports games – and reimbursements for trips overseas, around the country and, among other places, to S.C. coastal resort towns for conferences paid for by groups that try to influence their decisions as lawmakers.
Critics: conflict laws too vague
State law bans lawmakers from using their office to make money for themselves, family members, or people or businesses they are associated with.
But, as the ongoing State House corruption probe has proven, those conflict-of-interest laws are too vague and need to toughened, especially since legislating is a part-time job and most lawmakers have other jobs, ethics watchdogs say.
“If we're going to have part-time legislators who run into these sorts of conflicts, we need a tighter definition of when they must recuse themselves and when they must stay out of it (a vote or debate of an issue coming before legislators),” said Lynn Teague of the League of Women Voters, a citizen-led good-government group.
“There is a lot of wiggle room for them to have a major impact on things that affect them and their companies.”
The trouble with the state’s current ethics law, Teague said, is economic interests often are defined narrowly as direct payments from government contracts or grants.
But a lawmaker’s employer can benefit financially from a change in a law, regulation or policy impacting a business or industry’s bottom line. And lawmakers with conflicts should sit out debates in those cases, too, Teague said.
The public payroll
S.C. lawmakers reported receiving about $8.2 million in income in 2016 for themselves and their immediate family from government jobs. That includes about $5 million that legislators were paid in legislative salaries and expenses.
Public schools – K-12 and colleges – also are big employers of state lawmakers and their families.
In 2016, 14 S.C. lawmakers reported they or immediate family members earned income from K-12 public schools or school districts.
Another 19 lawmakers reported they or immediate family members earned income from the state’s public colleges and universities.
▪ The wife of state Rep. Brian White, R-Anderson, was paid a $58,000-a year salary as the director of development at TriCounty Technical College in their hometown. White chairs the powerful House Ways and Means Committee, which helps decide how to spend the state’s $8 billion-a-year general fund, including how much money goes to higher education institutions. Last spring, White also filled in as chair of the higher education budget subcommittee, replacing former state Rep. Jim Merrill, who was indicted on public corruption charges.
▪ State Rep. Jackie Hayes, D-Dillon, was paid close to $98,000 in 2016 as athletics director and head football coach at Dillon High School. Hayes’ wife also was paid close to $99,000 as coordinator of a Dillon 4 School District program.
▪ State Sen. Mike Fanning, D-Fairfield, was paid nearly $75,000 by the Chester County School District to be director of the Olde English Consortium, an education collaborative. The first-term senator is one of the Legislature’s most ardent supporters of public schools.
▪ State Rep. Jerry Govan, D-Orangeburg, earned $46,099 as the attendance supervisor for three Orangeburg County school districts. Govan’s wife also was paid $27,416 for working for Orangeburg Consolidated School District 5.
Govan’s job intersected with his role as a public official last year when, at the end of the last legislative session, he negotiated and voted on a Senate proposal to consolidate school districts in Orangeburg County.
The bill, approved by lawmakers but vetoed by the governor, outlined a process for consolidation and gave state lawmakers from Orangeburg some oversight of a transition committee that would oversee the merger.
Govan said he got involved in the debate on the consolidation bill because similar proposals, which have come up before, often lacked input from the local school districts.
Govan said he did not see his involvement in the school district consolidation bill as a conflict of interest because his job serves multiple school districts, not just one, and the legislation gave him no authority to make decisions that would impact his job.
“I don't serve in a capacity that puts me, in any form or fashion, in any type of decision-making realm in terms of personnel,” Govan said.
“Just about everything that we do in this state impacts individuals from one capacity to another,” he added. “As long as one is not directly profiting from whatever has occurred, then it's not considered a conflict of interest.”
Ties to special interests
State lawmakers also reported being paid about $1 million by special interests that lobby state government. Some of that money was paid to lawmakers working as consultants for those special interests.
▪ State Sen. Darrell Jackson, D-Richland, reported his consulting firm, Sunrise Enterprise, was paid $42,000 by the S.C. Ports Authority and $36,000 by Palmetto Health. Both also have paid lobbyists at the State House.
▪ State Rep. Russell Ott, D-Calhoun, said the S.C. Farm Bureau paid his consulting firm $75,000 in 2016. Ott was a Farm Bureau lobbyist before he became a legislator. He resigned that lobbying gig during his House campaign and formed a consulting group so he could be paid to run the the bureau’s youth-farming operation, he has said. Ott’s father, former state Rep. Harry Ott, is president of the Farm Bureau.
▪ Another powerful lawmaker reported that his law firm and business both made money from entities that lobby lawmakers.
State Rep. Murrell Smith, R-Sumter, is an attorney who handles mostly insurance defense and medical malpractice cases. He reported his law firm was paid $115,679 by special interests that lobby the Legislature for legal work, including Allstate Insurance, BlueCross BlueShield and the City of Sumter, among others.
Smith also owns a medical equipment company that supplies wheel chairs, bedside toilets, respiratory equipment and other products to patients. The company, Reliable Medical Equipment, was paid at least $616,449 by BlueCross BlueShield, Palmetto Health-Tuomey hospital and the state health plan, according to Smith’s financial disclosures.
Some of that money came from Medicaid, which is administered by the state Health and Human Services agency, whose budget Smith oversees in the House.
However, Smith said he has never had a conversation with anyone at Health and Human Services about Medicaid reimbursement rates for the medical equipment that his company supplies. Those rates are set by the agency itself, he said.
Smith said he also refrained from discussing or voting on a part of Health and Human Services’ budget that included a line item for durable medical equipment, even though he said he did not have to.
The line item for the equipment did not direct money to his business, which is one of many that provides such equipment. As a result, Smith said he fell under the so-called large-class exemption to having a conflict of interest, “which says there is no conflict of interest if it affects the class as a whole and not you (alone).”
▪ State Rep. Todd Atwater, R-Lexington, reported receiving personal income from his former job as president and chief executive officer of the S.C. Medical Association. The group lobbies on behalf of doctors, and also offers insurance and practice management services. Atwater was paid a $400,000-a-year salary in that role in 2015, The State previously has reported. Atwater left the job in 2016.
Atwater, who now is running for the GOP nomination for S.C. attorney general, expects questions to arise on the campaign trail about the work that he did and did not do for the Medical Association, he said last month, announcing his candidacy. However, Atwater says he was not involved in the association’s lobbying activities, instead focusing on its health insurance arm.
“I had nothing to do with advocacy. I made sure I was out of the room whenever that (lobbying issues) came on,” he said, adding state ethics officials said he was acting within the law.
Atwater said he tried to avoid even the appearance of a conflict of interest.
“If it looked like it might affect doctors, I stayed away from it, not because it was illegal or improper, but because I didn't want this to ever be a question in my serving at the Legislature or (as) the attorney general.”
Big bonuses for lawyers
Attorney-legislators, who make up about a quarter of the General Assembly, reported their firms collected $5.4 million in legal fees for representing clients before state agencies and boards.
Most of that money came from representing clients in workers compensation cases.
For example, state Rep. Tommy Pope, R-York, the No. 2 officer in House leadership, reported that his law firm was paid $708,333 in workers compensation fees.
And Pope is not alone.
More than three dozen other lawyers in the Legislature reported their law firms were paid $4.7 million to represent clients suing the state or before state agencies and boards.
That raises questions because legislators hold immense power over the state’s judiciary, electing state judges, from local magistrates to the Supreme Court. That power, held by only one other state legislature in the country, has led to too-close-for-comfort conflicts before.
In 2015, for instance, Camden’s Bill Funderburk, the husband of state Rep. Laurie Funderburk, D-Kershaw, was elected an administrative law court judge by the General Assembly. Judge Funderburk was paid a $104,000-a-year salary in that job in 2016, his wife reported.
Rep. Funderburk did not cast a vote in her husband’s election. But the hotly contested race made several lawmakers wince because of the familial relationship.
Rep. Smith of Sumter, one of the Legislature’s 43 attorneys, said the idea that lawmakers get special treatment in the courtroom — because they elect the judges hearing their cases — is false. Judges are bound by their own ethics rules, which require them not to show favoritism, he said.
“There's the perception that legislators get some sort of favoritism among some,” Smith said. “But, in reality in the courtroom, they treat us as any other lawyer.”
Be our guest
The companies, trade organizations, nonprofits and other entities that hire lobbyists to be their eyes, ears and advocates at the State House have other ways of gaining access to lawmakers, too.
For example, they can treat legislators to meals, trips and other perks.
In 2016, legislators reported receiving $279,000 in gifts and reimbursements for trips from special interests.
The gifts included Fitbit activity trackers, decorative palmetto trees, wine, biscuit mix, coffee, fruit baskets, cutting boards, pocket knives, neck ties, scarves and a Catawba Indian peace pipe made of pottery.
During the session, legislators also are treated to so many breakfasts, lunches and dinners that most do not list them individually, saying instead to call the committees they’re members of for a list of functions.
Roughly 60 House members also reported receiving tickets to the RBC Heritage golf tournament, worth about $450 a pair. The lead sponsor of the tournament is Boeing, the aircraft manufacturer that the state lured to North Charleston with taxpayer-funded incentives estimated to be worth about $900 million.
Lawmakers also travel the country and world, and spend time in S.C. resort towns on trips paid for by special interest groups.
▪ The S.C. Beer Wholesalers Association reimbursed 21 senators and representatives roughly $1,000 each for attending its conference at Kiawah Island.
▪ State Rep. Alan Clemmons, R-Horry, reported a gift of travel, lodging and meals valued at $4,637 paid for by the Israel Allies Foundation. The organization hosts meetings around the country and an annual conference in Israel.
Clemmons, a fervent Israel supporter, said he was invited to Israel to participate in the delivery of Lockheed Martin F-35 jets to that country’s air force.
While in Israel, Clemmons also worked with the Israel Allies Foundation and experts to help craft his bill that would ban antisemitism on college campuses, which he introduced last year.
"I see the push against antisemitism as the next round of civil rights in this country," said Clemmons, adding he has been invited to return to Israel in February to speak.
▪ State Sen. Kent Williams, D-Marion, reported a $13,049 trip to Tokyo, Japan, paid for by the North Eastern Strategic Alliance. Nine S.C. counties in the Pee Dee are in the alliance, which traveled to Tokyo and Taiwan for an economic development conference.
Williams said the two-week trip was grueling, not a junket. Each day started early with meetings with high-level officials from various companies, he said.
“There’s no down time, no pleasure or anything like that. It’s strictly business,” Williams said, adding the trip’s purpose was to attract companies to the Pee Dee.
Jamie Self: 803-771-8658, @jamiemself; Avery G. Wilks: 803-771-8362, @averygwilks
Does it pay to be a SC lawmaker?
A look at how members of the S.C. General Assembly make their money and the perks they receive, as reported in their most recent financial disclosures for 2016.
Government income paid to S.C. lawmakers and their families
Fees paid to the law firms of lawyer-legislators for representing clients who are suing the state or have cases before state agencies and commissions
Income to lawmakers and their families from groups that lobby the Legislature on the state budget, regulations and legislation
Value in gifts and reimbursements for speeches and trips that lawmakers disclosed
SOURCE: Analysis of the financial disclosure of 170 members of the General Assembly, filed with the State Ethics Commission
Not all SC lawmakers are transparent
Legislators self-report details about their income, leading to errors and omissions that have landed lawmakers in hot water.
Consider the cases of GOP state Reps. Jim Merrill and Rick Quinn of Berkeley and Lexington counties, respectively.
As part of the most significant State House corruption probe in two decades, the legislators entered guilty pleas to charges related to lobbying illegally on behalf of clients that were paying them or the businesses that they worked for.
Merrill pleaded guilty to misconduct for his repeated failure to report personal income from groups that lobby state government.
Quinn was accused of hiding work that he did for his father’s Richard Quinn & Associates consulting firm, helping that firm make millions. Quinn also was accused of illegally working on and voting for legislation for his father’s clients. Last month, Quinn entered a guilty plea to one misconduct charge.