Judicial Income Disclosure Largely Hidden from Public

January 22, 2014

Investigative Reports

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SC Supreme CourtIn South Carolina, if you want to know who is paying judges and their spouses, and what they own, you won’t find it easily.

Judges, for example, in the “unified judicial system” who are elected by the General Assembly are exempted from the state ethics law requiring state lawmakers and other elected officials to annually file income-disclosure statements with the State Ethics Commission. For those judges, their forms are required to be filed with the House and Senate Ethics committees, but only during judicial elections. Supreme Court justices serve 10-year terms; Court of Appeals, circuit and family court judges serve six-year terms.

The legislative ethics committees will release judges’ income-disclosure forms only upon request. They’re not posted on the General Assembly’s website, unlike similar forms for other elected officials that are posted online with the State Ethics Commission.

Judges annually file financial disclosure forms with the state Office of Court Administration, located on the State House grounds in Columbia, but those documents require less information compared to the forms filed with State Ethics Commission and are available only upon request.

The state Judicial Merit Selection Commission, which nominates judges for election by the Legislature, receives more detailed financial information, such as judges’ investments, liabilities and businesses with ties to judges that have received state contracts, but only during judicial elections. And by law, the 10-member panel can’t release those documents publicly if the records are not “presented under oath” during public screening hearings.

The Palmetto State isn’t alone when it comes to a lack of transparency in the judiciary.

Nationally, state supreme court judges typically are required to reveal relatively little, if any, financial information publicly, the Washington, D.C.-based Center for Public Integrity, a nonprofit investigative reporting organization, reported in a study released last month. The organization gave 42 states, including South Carolina, a failing grade in income disclosure by supreme court judges.

Not knowing the sources of earned and investment income for judges and their spouses prevents the public from monitoring potential conflicts of interest. Contacted last week by The Nerve, S.C. Supreme Court Justice Costa Pleicones said he would support efforts to make bring more transparency to the state court system.

“I don’t think anyone would balk at that,” said Pleicones, who has been on the high court since 2000.

John Crangle, executive director of the government watchdog organization Common Cause of South Carolina, told The Nerve when contacted this week that more transparency is needed in the state’s judiciary.

“At a minimum, it should be required for them to file the (income-disclosure) forms on an annual basis” with the State Ethics Commission, said Crangle, an attorney.

At The Nerve’s request, Pleicones, who is running against Chief Justice Jean Toal for her seat, said he would be willing to release a redacted version of confidential financial information he submitted to the Judicial Merit Selection Commission for the election. He said given his work and campaign schedule – he was out campaigning Tuesday at the General Assembly – he couldn’t immediately release the forms but promised to do so before next month’s election for the chief justice’s seat.

“I’m certainly going to do this,” Pleicones said, though he added he would redact certain information for security and privacy reasons, such as account numbers.

The Nerve on Friday and Tuesday left phone messages for Toal, who has been on South Carolina’s high court since 1988 and has been chief justice since 2000, though she could not be reached for comment before publication of this story.

The Judicial Merit Selection Commission, which includes six lawmakers and the brother of House Speaker Bobby Harrell, R-Charleston, who appointed his brother to the screening panel, found both Toal and Pleicones qualified for the chief justice seat and nominated both of them for election by the 170-member General Assembly. The election is scheduled for Feb. 5 during a joint session of the Legislature.

Terms for Supreme Court seats are for 10 years, though Pleicones, 69, and Toal, 70, each face mandatory retirement at age 72 under the state retirement system for judges.

South Carolina and Virginia are the only states in which their legislatures play primary roles in electing judges.

Under state law (Section 2-19-50 of the S.C. Code of Laws), all records – including required financial information – submitted to the Judicial Merit Selection Commission must be “kept strictly confidential” unless “presented under oath” at a public screening hearing, and must be “destroyed” after the commission has “reported its findings of fact.”

That information includes such things as public income sources for the judicial candidates and their immediate family members,  businesses with ties to judges that are regulated by the state, immediate family property purchased or leased by public agencies, outstanding stock above certain thresholds owned by the judges and their immediate families, debts of more than $500 owed by the candidates and  immediate families, gifts given to the candidates in connection with their public positions, and a separate net worth statement of the judge’s assets and liabilities.

Unlike state lawmakers, the governor, other constitutional officers, and other elected officials, judges elected by the Legislature are exempt under state law (Section 8-13-100-13) from annually submitting income-disclosure forms, known as statements of economic interest, to the State Ethics Commission.

Those forms require elected officials to reveal public, though not private, sources of income for themselves and their spouses, along with other information, such as gifts received. South Carolina is the only state that requires officials to disclose only their government income sources, according to a report issued last year by the governor-appointed S.C. Commission on Ethics Reform.

The South Carolina Policy Council – the parent organization of The Nerve – last year launched “Project Conflict Watch” to encourage lawmakers and other elected officials to voluntarily disclose their private income sources.

Judges are required under state law (Section 8-13-910) to submit statements of economic interests to the chairmen of the House and Senate Ethics committees, though it has to be done only when there is an election, not every year as required for lawmakers and other elected officials.

Toal and Pleicones submitted those forms to the Judicial Merit Selection Commission as part of their screening process, but because the commission did not release them as exhibits during their public screening hearings, “we are unable to provide you with the SEIs,” Jane Shuler, the commission’s chief lawyer, said Tuesday in a written response to The Nerve, citing state law.

Shuler said, however, she filed Toal’s and Pleicones’ forms with the House and Senate Ethics committees, as well as with the State Ethics Commission. House Clerk Charles Reid released Toal’s and Pleicones’ forms to The Nerve Tuesday afternoon upon request.

Court rules require judges to annually submit financial-disclosure statements to the state Office of Court Administration – which assists the chief justice in the administration of the state court system – though the only itemized information that Supreme Court justices most recently reported on those forms were gifts of more than $150 for law-related trips paid by various legal groups, a review by The Nerve found.

Those forms are available to the public upon request but are not posted on the Judicial Department’s website. The Nerve last week was provided copies of financial-disclosure statements for 2012 – the most recently available year – for Toal, Pleicones and the other three Supreme Court justices – Donald Beatty, Kaye Hearn and John Kittredge. Toal receives an annual salary of $148,350; the other four justices make $141,286 yearly, according to a state salary database.

On her disclosure statement filed with the Office of Court Administration, Toal reported nine law-related events in 2012 at which she said she gave speeches; the most-expensive listed trip was $911 for a function with the U.S. Military Court of Appeals.

In a separate letter filed with that disclosure form, Toal listed her husband, William Toal, as a partner in the Columbia-based law firm of Johnson, Toal & Battiste, though she said she hasn’t participated in any case involving her husband or his firm. She also revealed that she is secretary and director of Columbia Silica Sand Inc., described by her as a “closely-held corporation that operates the family sand mining business,” though she said she received no compensation from the company in 2012.

On her separate statement of economic interests filed with the House and Senate Ethics committees, Toal reported that she is the beneficiary of her mother’s estate and father’s trust along with her siblings, noting that the estate and trust collectively own “4-5% of the two family businesses” – listed as Columbia Silica Sand and Columbia Aggregates LLC.

Pleicones reported to the Office of Court Administration that he took three law-related trips in 2012 paid by legal groups – $869 for a National Conference of Bar Examiners event in Savannah, $559 for the South Carolina Association for Justice’s annual convention on Hilton Head Island, and $1,705 for the South Carolina Defense Trial Attorneys’ Association’s annual meeting on Kiawah Island.

He also reported that he receives retirement benefits from the state, the U.S. Department of Defense and the Social Security Administration, adding, “While this is income, I do not believe it constitutes compensation, and I report it from an abundance of caution.”

On his statement of economic interests filed with the House and Senate Ethics committees, Pleicones listed his wife as a part-time employee of a management company that represents, among other clients, the South Carolina Defense Trial Attorneys’ Association, which employs a lobbyist. “To my knowledge, she has no relationship with him or authority over him,” Pleicones said about the lobbyist, Jeff Thordahl.

Pleicones told The Nerve that judges he has known over the years have voluntarily removed themselves from cases when potential conflicts of interest existed.

Still, Pleicones acknowledged that more transparency is needed when it comes to income disclosure, noting, “I think it’s probably more important for judges than legislators, to tell you the truth.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.