Predisposition for Corruption
To stroll through the State House grounds in Columbia, S.C., is to behold by many accounts a memorial to political failure. There’s a towering statue of “Pitchfork” Ben Tillman, the one-eyed savage racist. There’s a bust of Marion Sims, noted as the father of American gynecology, who performed extensive experimental surgery on slave women without anesthesia before operating on upper-class whites. Then there are statues of former Gov. James Byrnes, a defender of segregation, and of Strom Thurmond the Dixiecrat.
And flying high in the middle of the grounds is a defiant Confederate flag.
Inside the State House it’s no better, observes John Crangle, a retired attorney and lobbyist who has run the state chapter of Common Cause for 25 years and teaches political science at Limestone College.
“John C. Calhoun, one of the biggest disasters that would ever be inflicted on any state — guess what — he’s right in the middle of the lobby,” Crangle says of another statue. “You might almost say that the State House grounds is a Jurassic Park; you have to be some kind of prehistoric monster in order to be memorialized over there.”
These days, while things may have gotten better, there’s still a very long way to go. Fingerprints of long-ago corruptive influences remain imprinted throughout the South Carolina Code of Laws and the state’s 1895 Constitution.
And after more than 100 years under that constitution, South Carolina ranks 45th with a grade of F and a numerical score of 57 from the State Integrity Investigation, a collaborative project of the Center for Public Integrity, Global Integrity and Public Radio International.
The biggest problems that exist are the manipulative fashions by which political parties are financed; antagonism by politicians toward a transparent government; hostility to the press; the corruptive influence of leadership political action committees; widespread institutional secrecy in disclosing assets, and loopholes in the state’s ethics laws large enough to dock a Confederate submarine.
In South Carolina, critics say, politics trumps law, and politicians often rule as lords, as evidenced by documented accounts of clear abuses of power. An undercurrent of fear and political interference bubbles throughout the state’s civil service, one that is shot through with cronyism and patronage.
History has been harsh to the people of South Carolina — an estimated population of 4.7 million, according to the Census Bureau — who did not occupy its ruling class. If things don’t change dramatically, so may its future.
Party financing: ‘The sky is falling … all rules are gone’
During the late 1700s, Federalists dominated only one Southern state, and it was South Carolina. It was the great wealth of Palmetto State elites with strong commercial interests that tied them to the influence and power of those in the North.
These days, there’s still hoarding of outside cash and power by the political ruling class, regardless of how much loathing many in South Carolina might have for Yankee money and influence following the Civil War.
“The sky is falling,” is how State Ethics Commission general counsel Cathy Hazelwood put it during an interview in her Columbia office.
She was talking about the repercussions of a Sept. 13, 2010, ruling by a federal judge in South Carolina. The judge had determined the state’s definition of “committee” to be unconstitutional. What that did was knock down all regulations regarding the limits on contributions to political parties. Now, anyone can donate unlimited amounts to portions of party accounts.
Because parties were considered “committees” in the state’s Ethics Act, declaring the definition of them unconstitutional has meant that in South Carolina, “people are political parties and PACs,” Hazelwood said. The court decision, she declared, means “all rules are gone.”
The result in practical terms is that political groups can now raise and spend unlimited amounts of money without having to disclose its origin.
And they’re doing so. The State newspaper reported that in 2010 the state Republican Party received several donations larger than the previous $3,500 limit and gave $49,500 to Mick Zais, who was elected superintendent of education, and $25,000 to Nikki Haley, the successful gubernatorial candidate.
“The Republican Governors Association also took advantage of the new rules to use a $125,000 donation from cigarette-maker Reynolds American to buy TV ads criticizing Haley’s Democratic opponent, state Sen. Vincent Sheheen of Camden,” the paper reported.
In order to rectify this clear violation of the spirit of the law, legislators would have to rewrite the state ethics laws, something for which the State Ethics Commission has been heavily lobbying, but to no avail.
It doesn’t end there.
While political parties have figured out a way to evade limits via the judicial system, individual candidates have found out how to do the same through corporations.
In South Carolina, corporations and individuals can donate directly to political candidates, but they are subject to limits. That’s $1,000 for a local House or Senate race and $3,500 for statewide seats.
To get around that, candidates have benefitted from a technique made infamous in the Palmetto State by New York City multi-millionaire Howard Rich. An anti-government, libertarian activist, Rich dumped at least half a million dollars into the various 2008 General Assembly campaigns of candidates who supported his school vouchers agenda in South Carolina.
As a June 2008 story in the Columbia Free Times pointed out, Rich used a laundry list of independent LLCs to splinter up checks to the candidates of his choosing, skirting the spirit of campaign finance laws that attempt bar an individual from donating more than the allowable maximum contribution.
Furthermore, much of Rich’s campaign cash often came during the two-week “blackout period” before an election. Candidates don’t have to publicly disclose contributions during that period.
A fourth estate in the crosshairs
It was a brisk day at lunchtime on Jan. 15, 1903, when South Carolina’s lieutenant governor, James Tillman, happened upon the editor of one of the state’s largest newspapers, N.G. Gonzales, on a street corner near the State House. The two men were known adversaries who’d kept their sparring in large part to the pages of newsprint and within parlor walls.
But on that particular day, Tillman pulled out a German Luger and shot the unarmed journalist in the belly. He died four days later. There were several witnesses, but after a long trial, the politically-connected Tillman was acquitted.
More than a century later there still remains a pervasive antagonism toward the press at the upper reaches of government in South Carolina. Specifically, the state’s Freedom of Information Act is under attack.
There is no agency that enforces the FOI law or monitors the state government’s compliance with it. There is also no appeal process, relegating to the courts any problem a member of the public or press experiences in obtaining public information.
“The option is to file a civil suit or seek to initiate a criminal prosecution,” said University of South Carolina law professor and expert on state FOI law Jay Bender. “There is no administrative appeal procedure.”
Meanwhile, “Certain portions of legislative things are exempt,” from the state’s FOI law, said South Carolina Press Association director Bill Rogers. He added that “the technical term for that is b---s---.”
But even when information isn’t exempt from FOI laws, office holders have been accused of purposefully attempted to hide it. Republican Gov. Nikki Haley’s administration has used a policy of deleting emails, which critics say runs afoul of state law, according to a Nov. 20, 2011, story in The State. Administration officials responded by saying they’re working on a new policy to determine which emails should be retained and how to properly store them.
Reporters and media representatives also believe the current governor and lieutenant governor do much of the public’s business on private email accounts to evade open records laws. It’s what Rogers characterizes as a growing problem of an off-the-books shadow government.
Rogers and the S.C. Press Association have also sued the S.C. Department of Public Safety for withholding police video and incident reports as well as a county coroner for refusing to release public autopsy records because he considers himself a healthcare provider.
“Anyone who uses a coroner as a healthcare provider is in pretty bad shape,” Rogers said.
No asset disclosure
“During the American Civil War, the planter class resisted Confederate taxation,” recalls William Hamilton, a Charleston attorney and a curator of South Carolina historical knowledge. “Wealth seems to be regarded as a purely personal matter in our culture, not to be disclosed, taxed or attached to any sort of obligation except perhaps the tithe.”
In modern days, because of virtually nonexistent asset disclosure laws in South Carolina, lawmakers are more than able to hide their wealth — and who is paying them — even when it would create a clear conflict of interest.
Palmetto State public officials fill out something called a Statement of Economic Interest, but it is not a true asset disclosure, according to State Ethics Commission general counsel Cathy Hazelwood, who added that it requires “absolutely nothing compared to other states.”
An income disclosure law was something Gov. Nikki Haley campaigned for when she ran for the office in 2010, claiming that if the public knew who was paying its lawmakers they would understand why certain policies moved the way they did at the State House.
“However, Haley failed to report in her own ethics filings that she had accepted more than $40,000 in consulting income from an engineering firm with business before the legislature,” reported The Nation magazine in a July 4, 2011, cover story.
This was revealed when Haley allowed reporters to view her tax records shortly before the election. But how was it that a state representative could haul in tens of thousands of dollars from a business with interests before the state without anyone knowing unless they viewed her private tax returns? She wasn’t required to disclose her assets on the Statement of Economic Interest form if she didn’t want to — it’s up to public officials and candidates to decide what they want or don’t want to disclose when it comes to who pays them.
A ‘worthless’ whistleblower law
In 2009, prosecutors charged the then-finance director of the South Carolina Department of Social Services with embezzling about $5 million from the agency over four years through a fraudulent check-cashing scheme. Six others pleaded guilty and dozens more have been tied to the crime. The architect of the scam pleaded guilty and is serving a 10-year prison sentence.
The state has seen a barrage of similar embezzlement over the past decade that might have been averted if it had a decent whistleblower act, argues Common Cause’s Crangle.
“Right now the whistleblower law is basically worthless,” he said. “It doesn’t protect the whistleblower from retaliation and it doesn’t provide them with an avenue for redress if they get retaliated against, if they get demoted or fired.”
State Employees Association director Carlton Washington said the current law should be stronger. And according to State Retirees Association president emeritus Sam Griswold, state workers would probably fear retaliation for blowing the whistle as it stands now.
That’s because the law applies only to retaliation against somebody within one year of their blowing the whistle, according to South Carolina law.
“In other words, an employer could wait a year after someone filed a complaint and then fire the employee with no problem,” states a May 10, 2011, story in Free Times.
A toothless ethics commission
As the Charleston Post & Courier put it 20 years after the fact, “Drugs and booze flowed freely among a boastfully corrupt group of South Carolina lawmakers who called themselves ‘the Fat and Ugly Caucus.’ They were known to cut deals in the halls of the Legislature, or after hours in hotel bars where cash and bribes helped push through favors.”
Those politicians were among 17 lawmakers caught in an FBI sting dubbed Operation Lost Trust in 1990. The federal crackdown exposed a pack of corruption at the State House and eventually led to the passage of the State Ethics and Government Reform Act of 1991.
But the entity that enforces that law, the State Ethics Commission, is these days understaffed, underfunded and widely thought to lack teeth. It has no jurisdiction over members of the Legislature when it comes to how they raise and spend their campaign cash once they are elected. Lawmakers are theoretically self-regulated by their respective ethics committees in the House and Senate.
Funding for the State Ethics Commission has been slashed a half-dozen times in the last three years, according to agency attorney Hazelwood. When she started there in 1999 it had a budget of $725,000. Now it takes in less than $284,000 in appropriated funds. The agency is, however, allowed to keep fines and reimbursements when it catches politicians breaking the law, and it also collects fees from lobbyists when they register.
But the ethics agency can only really investigate a politician if someone makes a sworn complaint that cannot be anonymous. When that happens, the SEC has subpoena power, but without it the agency can’t do much more on the self-initiative or investigative front.
What that means is that scores of politicians can raid their campaign coffers for personal use and likely not get caught. The only reason the state’s Republican lieutenant governor ended up in front of a grand jury after he blew roughly $25,000 in campaign cash on things like football tickets, vacations, a Playstation and flat-screen TV, iPads and women’s clothing, was because a political operative tipped off members of the press.
The lieutenant governor, Ken Ard, resigned in early March after the state grand jury indicted him on seven violations of the State Ethics Act. A judge sentenced him to five years probation, a $5,000 fine and 300 hours of community service. In the wake of the Ard situation, the State Ethics Commission says it now audits all statewide candidates’ campaign disclosure forms more carefully, according to agency attorney Hazelwood.
The ethics commission has gotten solid reviews for its recent investigations of serious wrongdoing. In 2009 the agency slapped former Republican Gov. Mark Sanford with the largest ethics fine in state history after he used the state plane to carry on an affair with a woman in Argentina. And in 2011, the agency hit Ard with the second-largest fine for his own ethics woes.
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