Commission Recommends Major Ethics Reforms, Though Gaps Remain

January 29, 2013

Investigative Reports

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Press Conference Ethics ReformThe S.C. Commission on Ethics Reform has proposed sweeping reforms to state ethics laws, which include requiring state legislators and other public officials to report their private sources of income.

If enacted, “South Carolina will move from being one of the worst states on government ethics, to one of the best states,” Gov. Nikki Haley, who appointed the 11-member commission, said in a prepared statement to the report, which was released Monday at a State House press conference.

But although the proposed changes are aimed, among other things, at strengthening the State Ethics Commission and supporting the creation of a Public Integrity Unit in the S.C. Attorney General’s Office, they also would allow the House and Senate Ethics committees to remain in place.

In effect, the 170-member S.C. General Assembly could continue to discipline itself through the committees for”disorderly behavior” as currently allowed under the S.C. Constitution, though the committees would not be allowed to investigate more serious matters, which would come, for the first time, under the jurisdiction of the State Ethics Commission.

“Specifically, our state Constitution provides only that ‘each house may … punish its members for disorderly behavior, and, with the concurrence of two-thirds, expel a member, but not a second time for the same cause,'” the report states. Neither the constitution nor the commission’s report, though, defines “disorderly behavior.”

The S.C. Policy Council, the parent organization of The Nerve, last year recommended in its eight-point reform agenda that the legislative ethics committees be abolished; and that the State Ethics Commission, which polices the conduct of other public officials, have jurisdiction over lawmakers.

During Monday’s press conference, Henry McMaster, a former state attorney general and co-chairman of the Commission on Ethics Reform, said the House and Senate Ethics committees have the authority to discipline or expel legislators. The 33-page report uses the phrase “internal behavior” to describe the policing function of these committees, though it doesn’t give specifics.

However, he also said that under the proposed changes, the State Ethics Commission would have the ability to refer its most serious cases against lawmakers to the proposed multi-agency Public Integrity Unit for further investigation – and potentially criminal charges. The commission received oral and written testimony from several people in government and the private sector supporting an independent ethics body “to examine potential violations by members of the General Assembly.”

The commission’s report outlines 23 recommended changes to ethics laws for public officials.They include:

  • Disclosing all private sources of income, and identifying all “fiduciary” positions, or positions of trust, held, whether compensated or uncompensated. Legislators also would have to report their professional fees to themselves or their firms for handling judicial cases where a state agency is an opposing party. The Nerve has previously reported about the lack of identification of lawmakers’ private income sources.
  • Lengthening the period of recusal to two years from one year when a legislator can represent a client for a fee before a state agency or board when that lawmaker voted to appoint, recommend or confirm someone to that state agency or board.
  • Levying stiffer fines for ethics violations.
  • Banning leadership political action committees, or PACs. The Nerve first reported earlier this month that all five Republican members of the newly expanded House Ethics Committee have received campaign contributions from a PAC affiliated with House Speaker Bobby Harrell, known as the Palmetto Leadership Council.
  • Raising the annual registration fee for lobbyists from the current $100. McMaster said the higher lobbying fees would help offset costs for more personnel at the State Ethics Commission, which would be allowed to investigate any legislator. The Ethics Commission currently doesn’t have that authority.
  • Expanding the definition of “lobbyists” and “lobbyists’ principals” to including lobbying at the local-government levels, not just at the state level.
  • Strengthening public-corruption cases by allowing solicitors and the attorney general to seek state mail- and wire-fraud charges in those cases.
  • Increasing the reward to $25,000 from $2,000 for state employees who successfully pursue claims of government waste, fraud or abuse under the state Whistleblower Act. The Nerve has previously reported about weaknesses in the current law.
  • Shortening the required response time to state Freedom of Information Act requests, decreasing any accompanying costs, and eliminating the exemption for lawmakers to comply with the FOIA. “All levels of government should be subject to the same statutory requirements regarding open records. Otherwise the public trust suffers,” the report states. The Nerve since its founding three years ago has repeatedly pointed out the legislative loophole in the FOIA.
  • Requiring any entity receiving public funds to be subject to FOIA requests, not just government agencies.

During Monday’s press conference, McMaster was asked by a reporter if he believed any lawmakers were personally enriching themselves, but he didn’t provide a direct answer.

“That’s not our purpose,” McMaster replied.

In a hearing last week before the Commission on Ethics Reform, Ashley Landess, president of the South Carolina Policy Council, raised concerns about whether Harrell, R-Charleston, used his House speaker’s position to benefit his business and himself in other personal matters. Landess said the Policy Council is considering filing a formal ethics complaint against Harrell with the House Ethics Committee.

Documents obtained by the Policy Council and The Nerve, which were referred to by Landess during last week’s hearingraise questions about Harrell’s:

  • Dealings with the state Board of Pharmacy on various matters involving his pharmaceutical business. Those matters had not been previously revealed publicly.
  • Reimbursement of campaign funds for certain expenses connected to the use of his private airplane. Harrell’s campaign reimbursements were first reported by The (Charleston) Post and Courier last year.
  • Appointment of his brother, John Harrell, to the state Judicial Merit Selection Commission, a 10-member panel that nominates judicial candidates for election by the S.C. General Assembly.

None of the issues involving Harrell was specifically mentioned during Monday’s press conference. Harrell has repeatedly denied he has done anything wrong, and he has not been charged with any criminal or administrative violations.

Contacted after Monday’s press conference, Senate Judiciary Committee Chairman Larry Martin, R-Pickens, told The Nerve he will ensure that the recommendations by the Commission on Ethics Reform are given serious consideration.

“I think every one of the recommendations deserves to be vetted in committee and by the Senate,” he said.

In a prepared statement released with the report, Martin said, “I am appreciative of their hard work and encouraged that their recommendation will help us pass the most far-reaching and important ethics reform in our state’s history.”

Rep. Murrell Smith, R-Sumter, who leads a House Republican panel studying ethics reform, told The Nerve on Monday, “I would imagine we will move quickly to draft legislation.”

In a prepared statement released with the report, Smith said, “Members of the House look forward to working with the governor and the commission on strengthening our state ethics laws to make them the strongest in the country and giving the people of South Carolina the kind of accountable, transparent government they want and deserve.”

Haley also said in her prepared remarks on the report: “Now it is up to members of the General Assembly to move the ball forward. If this bipartisan commission could do its exceptional work in less than two months, the General Assembly should be able to do its work in less than four months. I look forward to working with the commission and the General Assembly in the days and weeks ahead. We now have a golden opportunity to make comprehensive and meaningful ethics reform the law of our state. It’s time to seize that opportunity.”

Former state Attorney General Travis Medlock and commission co-chairman said the biggest issue for lawmakers will be public disclosure of private income.

“When it comes to telling the public what they earn and where they get it, that’s going to be the crux of the debate,” Medlock said. “It’s going to take some courageous legislators who are committed, who are idealistic and who don’t mind making a few people mad.”

Olson can be reached at (803) 254-4411 or curt@thenerve.org. Follow him on Twitter @thenerve_curt and @olson_curt.