Midlands Lawmakers Feasting on Subsistence

October 7, 2010

Investigative Reports

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The NerveRepublican S.C. Sen. Jake Knotts of West Columbia lives less than 10 miles from the State House in downtown Columbia.

Democratic state Rep. Joe Neal’s home in Hopkins is only about 16 miles from the state Capitol.

Yet an analysis by The Nerve of legislative records found that the two veteran Midlands lawmakers were among 26 current or former Richland or Lexington County legislators who received a total of at least $500,000 over a 2.5-year period in “subsistence” payments.

That money is supposed to reimburse lawmakers for hotel stays and meals while on legislative business, whether the General Assembly is in or out of session.

But legislators do not automatically receive subsistence. The system of legislative compensation leaves it to their discretion whether to do so – and if so, how much, up to a maximum of $131 per day.

That amount is set in accordance with Internal Revenue Service guidelines, and subsistence payments are treated as reportable income for lawmakers who live within 50 miles of the State House, according to House Clerk Charles Reid, who said in a written response to The Nerve that the “applicable taxes/withholdings are taken” from those payments.

From Jan. 1, 2008, through July 31 of this year, 202 current or former House and Senate members statewide received a total of at least $3.8 million in subsistence payments, according to The Nerve’s analysis of legislative records provided under the S.C. Freedom of Information Act. The payments represented the third largest category, or about 26 percent, of $14.8 million in total salaries and expenses for lawmakers during the period.

But the total subsistence payments likely were higher, as lodging and meals for House members on non-session days were included in travel expenses for that chamber, based on information Reid provided. Also, the Senate records provided to The Nerve for this year ran through June, while the House information included July.

The Nerve reported on Wednesday that lawmakers’ salaries also include in-district expense payments of up to $12,000 per year. Their base annual salary is $10,400, which means they can take home up to $22,400 a year, not including any subsistence payments.

Like subsistence for legislators residing within 50 miles of the State House, lawmakers’ compensation for in-district expenses also is treated as income under the tax code. In addition, in-district payments are credited toward legislators’ pensions.

Subsistence totals for the Richland and Lexington county legislative delegations often equaled or exceeded the amounts for lawmakers traveling to Columbia from the Upstate, Lowcountry and Pee Dee regions of the state, The Nerve’s analysis found.

The review of lawmakers’ compensation exposed serious weaknesses in the system the Legislature has set up to cover room and board costs related to legislators’ official duties. Those shortcomings leave South Carolina taxpayers on the hook for more money than they otherwise might be.

For one thing, there is no monthly or other cumulative cap on subsistence.

Moreover, the biggest loophole in the system leaves it wide open to abuse.

Rather than submitting hotel and restaurant receipts to receive their actual costs for subsistence, lawmakers fill out vouchers, writing in the amounts as they choose, up to the maximum $131 per day.

So how do taxpayers know if a legislator who claims subsistence actually stays in a hotel and eats out on a session day; instead of, say, eating for free at a reception hosted by a special-interest group and driving home or crashing at a friend’s or relative’s place?

They don’t.

Reid said the subsistence vouchers must be signed by him, a lawmaker’s committee chairman and the House speaker but “there is nothing to verify” regarding what legislators claim.

How’s that for transparency and accountability?

“It is outrageous,” said John Crangle, director of the nonprofit government watchdog organization Common Cause of South Carolina, when contacted by The Nerve last week. “What are they spending this subsistence on? They are not spending it on hotels and meals.

“What they do is camouflage their compensation to the point where people don’t know the full measure of their compensation.”

Among a dozen lawmakers The Nerve interviewed in its investigation of the true cost of S.C. legislators, several said they would have no problem going to a system that reimburses them for their actual subsistence expenses.

But other members of the Legislature defended the status quo.

Crangle argued for an actual expenses system, contending that it would cure any abuse.

In a story published Tuesday in The Nerve, Sen. Mike Rose, R-Dorchester, who had the lowest total salary and expenses among lawmakers who claimed expenses during the 2.5-year period, cited the findings of The Nerve’s probe of lawmakers’ compensation in saying he intends to sponsor a bill requiring all legislative expenses to be posted online.

Rose said he plans to introduce such legislation when the General Assembly returns to session in January.

Republican S.C. Sen. Tom Davis, whom The Nerve contacted because his total compensation and expenses for the 2.5-year period were among the lowest, provided The Nerve with an example of why, and it illustrates how the subsistence voucher system works.

On Sept. 28, Davis drove round trip from his Beaufort County district to Columbia for a legislative committee meeting on K-12 education funding. Afterward, Davis provided The Nerve with vouchers showing what he could have received in compensation, versus what he actually claimed.

The first voucher lists $136 for mileage (272 miles at 50 cents per mile), $131 for subsistence and $35 in per-diem for attending the meeting on a non-session day, for a total of $302.

The second voucher – the one Davis turned in – lists only the $136 for mileage, a difference of $166.

Thus, Davis voluntarily saved South Carolina taxpayers $166 for that one meeting alone.

“I don’t take subsistence and per-diem” when not in session, Davis told The Nerve, “and that’s my decision to do that.”

Davis said lawmakers should lead by example. And while subsistence might not consume a big chunk of the overall state budget, he said, legislators should nonetheless be the standard bearers for handling public money, especially in a recessionary era when many state agencies are experiencing budget cuts and laying off employees.

Expense reports for Senator Tom Davis
http://d1.scribdassets.com/ScribdViewer.swf

Expense reports from Sen. Tom Davis
http://d1.scribdassets.com/ScribdViewer.swf

Midlands lawmakers contacted last week by The Nerve defended their subsistence payments.

“I have not given it a whole lot of thought, but as I reflect on it,” said Neal, who received $22,280 in payments over the 2.5-year period, “the (legislative) salary here is not what you would call exorbitant. In South Carolina, most of us have families we have to support as well. It is a sacrifice to be here.”

Neal said he doesn’t stay in hotels while on legislative business in Columbia. Republican Sen. John Courson of Richland County, chairman of the Senate Education Committee, joked that if he did that, “I wouldn’t have been married for 36 years.”

Courson, who received $23,711 in subsistence payments during the 2.5-year period, told The Nerve that he doesn’t claim the payments when the Legislature is not in session, and that he also has never accepted mileage reimbursements in his 26 years as a state lawmaker. Courson said he considers subsistence payments “part of the income package total,” adding that most lawmakers living outside the Columbia area “see it as a component of the legislative pay package.”

While the Legislature is in session, “many of the (out-of-town) legislators go home at night or spend the night with friends (in the Columbia area),” Courson said.

Knotts’ subsistence payments for the period came to $26,462, the highest among Midlands senators and the 6th highest among the 55 current or former senators who served during the two-and-a-half-year timeframe, according to The Nerve’s analysis.

Knotts’ $26,462 in total subsistence nudged out amounts paid to Republican Sen. Mike Fair of Greenville ($26,069) and Democratic Sen. Robert Ford of Charleston ($25,545), and was only about $4,000 less than the total received by the top recipient of subsistence, Senate Finance Committee Chairman Hugh Leatherman, R-Florence ($30,130).

Knotts wasn’t the only Midlands lawmaker receiving relatively large subsistence amounts. Democrat Darrell Jackson of Hopkins, for example, was paid $24,104 over the 2.5-year period, which was slightly more than the amount paid to Sen. Daniel Verdin, R-Laurens ($23,983).

Knotts and Jackson did not return written or phone messages left for them last week by The Nerve.

On the House side, Republican Jim Harrison and Democrats Jimmy Bales and Leon Howard, all of Richland County; and Republicans Kenny Bingham and Kit Spires of Lexington County tied with 10 other non-Richland and Lexington members as having the highest subsistence payments ($22,542) during the period.

Bingham, the House majority leader, told The Nerve last week that “every dollar we receive is taxable income,” including subsistence payments. He said his total salary is no secret, noting that all forms of legislative compensation must be reported on statements of economic interests, which are posted on the S.C. Ethics Commission website.

In 2009, for example, Bingham reported a base salary of $10,400, in-district expenses of $12,000, and “per-diem” expenses of $7,794, for a total income of $30,194, according to his statement of economic interests form for that year.

“It’s pretty ridiculous to have a salary of $10,400 for the amount of work people put into the job,” said Bingham, owner of American Engineering Consultants Inc.

Bingham said that although he doesn’t stay in hotels while the Legislature is in session, the subsistence payments go toward covering a variety of other legislative expenses. Asked about state law requiring counties to fund local legislative delegation offices, he replied, “I never use that. I have to use my personal staff to deal with the phone calls, the e-mails.”

Reps. Joe McEachern, D-Richland, and Joan Brady, R-Richland, said they do sometimes stay in hotels on session days.

To be an effective lawmaker, McEachern said, one must spend a lot of time learning the legislative process, staying informed of State House happenings and getting to know committee and subcommittee chairmen.

Those requirements make it necessary to remain close to the Capitol, he said. “Let me tell you – you need to stay around the State House while you’re in session,” said McEachern, who rang up $14,000 in subsistence during the 2.5-year period.

Asked when she stays downtown overnight, Brady replied, “Like when we’re there until 2 o’clock in the morning” in session.

Brady, whose subsistence over the 2.5 years totaled nearly $21,900, said lawmakers’ salaries are “very low,” and their compensation should be looked at in its entirety.

Brady’s last point is precisely what The Nerve’s investigation into the true cost of state lawmakers reveals. The review shows that the system of legislative compensation is susceptible to abuse because it lacks transparency and accountability.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Reach Ward at (803) 254-4411 or eric@thenerve.org.