By RON AIKEN
Non-disclosure raises questions about purpose of required disclosure forms
Sen. Hugh Leatherman (R-Florence), his wife, Jean, and associated LLCs own more than $2 million of real estate in Florence County, but you won’t find those holdings anywhere on Leatherman’s official Statement of Economic Interest form required by law.
In theory, SEIs identify potential conflicts of interest by showing where an elected official or senior government employee receives money and disclose any business or financial interests that may benefit from the officeholder’s position.
In reality, SEIs are little more than a list of gifts and state benefits, with the personal interest disclosure section worded so vaguely and filled-out so poorly by respondents that they stand as perhaps the least-policed financial documents in state government because in South Carolina, the policing entity for the form’s accuracy isn’t the state Ethics Commission but legislators themselves.
Leatherman’s most recent SEI lists three business interests he has, interests which, according to SEI guidelines, “either the filer or a member of the filer’s immediate family held/controlled” and “which constitute a value of $100,000 or more.”
According to S.C. Secretary of State business filings, Leatherman is listed as the agent of record for Leacon, Inc. (established in 1991 and in good standing currently with a mailing address of Leatherman’s Florence home) and Hugh Leatherman, LLC (est. 2006, in good standing, same address).
Only one of those entities appears on Leatherman’s SEI: Leacon, which according to online records is a licensed general contractor with only one project recorded via buildzoom.com – $6,000 worth of remodeling work in 2006 at 576 Elizabeth Lane West in Charleston for a home owned by one Kathleen Sottile, who bought the 2,147 square foot, four bedroom-home in the Moreland subdivision from relatives in 1997 for $1 (it’s valued at $339,000 today).
Property tax records reviewed by The Nerve show Leacon’s 2015 tax burden to be just $6.09 for a parcel of property on Whitehall Shores Road in Florence zoned “farm vacant”; $47.95 for furniture and fixtures valued at $140; and $6.50 for a “residential vacant” property at 429 Woodland Dr. in Florence.
If Leacon is doing anything, it isn’t much.
Meanwhile the missing business from the SEI – the eponymous Hugh Leatherman, LLC – is much more active. That entity owns four pieces of residential property worth nearly half a million dollars in Florence: 912 Sherwood Dr. (three bedrooms, two baths, 1,635 sq. ft. valued at $63,000); 1516 Woods Rd. (four bedrooms, two baths, 1,746 square feet, $91,000); a parcel on Thomas Road with a carport and shop classified residential vacant valued at $42,000; and a $100,000 three-bedroom, two bath home with 1,981 square feet at 1101 Wannemaker Ave.
Leatherman also owns a condo in Wild Dunes on the Isle of Palms for which the most recent comparable sales data available shows a price of $635,000 in 2010, according to the Charleston County Auditor. Records from the auditor’s office show Leatherman paid $175,000 for the unit in 1985. He later conveyed 1/13th of the ownership in that property to his son-in-law and serving DOT Commissioner, John Hardee, for $19,500 in 1989 as well as similar ownership percentages to daughters Lynn and Karen. Other ownership interests in the property were subsequently assigned to Max and Tracy Eggleston, Barbara Jane Warner, Sigurd and Jane Hermansen, Jewell Eggleston, Margaret Scott Hadden, Alvin E. and Carol Levesque and J.K. and Lilian B. Wilder.
Hugh Leatherman’s daughter Amy is on the deed of a home at 575 Elizabeth Lane West in Charleston that he sold to her from his Hugh Leatherman LLC business for $370,000 in 2011. Hugh Leatherman LLC purchased that property in 2006 – the same year Leacon was directly across the street at 576 Elizabeth Lane West performing remodeling work – for $335,000.
While not quite an empire, the holdings aren’t insignificant, either, especially when you factor in that Leatherman’s wife, Jean, is a real estate agent with ERA realty whose name is not just on the deed of the Leatherman’s home at 1817 Pineland Ave. ($600,011) but also on the 27,000 square-foot commercial building at 2180 W. Evans St. that houses her business valued at $599,337 and three more residential properties valued at $310,704 for a combined total of $1.51 million.
Throw in, for good measure, the only two properties with deeds just in Hugh’s name – 1320 Edgewood, a three-bedroom home valued at $106,361.37 and 411 Thomas Rd., a three-bedroom home valued at $99,792 – and the Leathermans as a couple hold either in personal deed or LLC 13 pieces of real estate valued at $2,172,826.
To anyone in real estate, $2.1 million in property is significant, constituting a serious interest in the residential and commercial industries that the South Carolina legislature regularly rules on. Apparently that amount is not enough, however, for Leatherman to list on his SEI under “Real or Personal Property Interests,” which only states that “Filer does not have any property items to disclose.”
A message seeking comment from Leatherman was not returned.
OUT OF OUR JURISDICTION
So who files SEIs, anyway?
Elected officials, candidates for office, anyone serving on a state board, commission or council whether salaried or not, chief and deputy agency administrators and the chief administrative officials for each political subdivision including “school districts, libraries, regional planning councils, airport commissions, hospitals, community action agencies, water and sewer districts, and development commissions.”
And who polices them? That’s easy – the S.C. Ethics Commission.
With one exception.
“The House polices the House members, and the Senate polices Senators,” said Ami Franklin of the Ethics Commission. She said her office only records the electronic filing of SEIs from Senators and Representatives; it does not check them or monitor their content in any way.
“That’s out of our jurisdiction,” she said. “I assume the House and Senate do that.”
Whether they do or they don’t, the idea of a public body policing itself runs counter to the basic principles of transparency and public accountability. A review of House advisory opinions from 1992-2015 shows it has never rued on matters pertaining directly to SEI content but only clarified that a member’s personal business may profit from a House Legislative Caucus because a caucus is not a “governmental entity” (advisory opinion 2015-2) and confirmed that SEIs must be filed by April 15 and do not have to include state retirement (advisory opinion 2013-3).
The House Ethics Committee has also issued fines for the late filing of SEIs but not for their accuracy. (In 2013, for example, Rep. Jenny Horne, R-Charleston, paid $100 on April 29 for filing her SEI late.) Three representatives – Kirkman Finlay (R-Richland), Murrell Smith (R-Sumter) and Kenny Bingham (R-Lexington, who chairs the committee), all have gone the extra mile by adding extensive addendums to their 2015 SEIs to include real estate holdings. But they’re alone in the 124-member body.
On the Senate side, as in the House, fines are levied for late filings, but it has done so only for an SEI twice – Sen. Greg Gregory (R-Lancaster) paid $160 for a late report in April 2013 and the late Sen. Clementa Pinckney was fined and paid $250 for a late campaign report and SEI in the same month and year.
“No question, SEIs are really not worth the paper they’re printed on because so much information is not filed by the legislators and there’s no enforcement,” said John Crangle of Common Cause SC, a political watchdog group.
“One of the big questions with the new ethics bill was whether they would require income tax disclosures, and of course their answer was ‘no.’
“There’s no doubt the statute is vague and should be much more specific as to what information is required and what does and doesn’t need to be disclosed, but even if it wasn’t it should still include substantial information. If they were simply completed properly they’d show you just how many conflicts of interest legislators have.”
When no one’s checking, the motivation to disclose is weak, Crangle said. He said it’s even weaker when you’re checking on a political superior.
“Can you imagine a junior senator going after Hugh Leatherman?,” Crangle said. “No way they’re going to attack one of their own, especially one who is as powerful as Leatherman, who in his position as chair of Senate finance and the Senate president pro tem either directs or appoints committee members and in essence governs an inordinate percentage of the business of the state.
“It’s a conflict of interest to investigate conflicts of interest.”
Finally, and not least insignificantly, Sen. Leatherman sits on the very Senate Ethics Committee that would be responsible for investigating his SEIs.