Gov. Haley Increases Ties to Powerful Law Firm Lobbyists

December 8, 2014

Investigative Reports

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Governor's OfficeFrom January 2013 through May this year, five state-government lobbyists with the prominent Nelson Mullins law firm collectively received more than $1.2 million in income representing mainly large corporations, records show.

But neither Gov. Nikki Haley’s office nor James Burns, who was listed as a partner in the Nelson Mullins firm before Haley last month named him as her new chief of staff, will tell The Nerve whether the firm’s lobbyists will have easier access to the Governor’s Office with Burns’ appointment, or whether Burns will be dealing directly with any of those lobbyists in his new $131,325 taxpayer-funded job.

During the governor’s race in October, Democratic candidate Vincent Sheheen accused Haley of fostering a “pay-to-play” culture in her administration, contending that companies that receive taxpayer-backed incentives to locate or expand in the state shouldn’t be allowed to donate to a governor’s campaign. A bill (S. 134) prefiled last week by Sen. Tom Davis, R-Beaufort and former Gov. Mark Sanford’s chief of staff; and Sen. Chip Campsen, R-Charleston, would ban companies from donating to any political candidate if they receive subsidies or “targeted” incentives.

Haley campaigned in both of her gubernatorial elections on ethics reforms. Burns was appointed in January by Haley to the State Ethics Commission’s governing board, which elected him its chairman after he was confirmed by the Legislature. He also served as legal counsel to Haley’s now-concluded Commission on Ethics Reform, which she created through an executive order in 2012.

As the State Ethics Commission chairman, Burns at a July commission meeting announced – without any commission discussion – a change in media policy that required all public comments to go through Herb Hayden, the commission’s executive director, instead of Cathy Hazelwood, the commission’s chief lawyer and deputy director, who had been the agency’s longtime spokesperson. A media lawyer said then the move violated the State Freedom of Information Act.

Hazelwood last year sent a letter to Haley directing her to reimburse the state for the cost of travel by her and her campaign staff to a fundraising event at a North Carolina resort. Hayden, who later overruled Hazelwood, told The Nerve that the letter had been destroyed, though The Nerve later last year obtained an electronic copy of it. As part of a recent settlement of a lawsuit brought in January under the FOIA by the South Carolina Public Interest Foundation, a Greenville-based government watchdog organization, a judge ruled that Hayden and the commission violated the FOIA by responding to The Nerve with a “falsehood.”

Burns, who served as a U.S. Navy lawyer from 2005-2008 before joining Nelson Mullins, did not respond to recent written and phone messages from The Nerve seeking comment about whether he will have contact with Nelson Mullins lobbyists while in the Governor’s Office. Doug Mayer, Haley’s chief spokesman, also didn’t respond.

Nelson Mullins spokeswoman Jan Easterling in a recent email response to The Nerve said Burns will have “no affiliation with the firm during his service in the Governor’s Office,” though she did not respond to other questions, including whether:

  • Burns will retain his partnership status with the firm during his tenure in the Governor’s Office, or regain it immediately thereafter;
  • Burns will have communication with the firm’s lobbyists while in the Governor’s Office; and
  • How much communication the lobbyists have had with the Governor’s Office since Haley took office in 2011.

Ties to Governor’s Office, Legislature

The Nelson Mullins Riley & Scarborough firm, headquartered in a downtown Columbia high-rise office building within walking distance of the State House, was ranked the 90th-largest law firm in the nation in 2013 by the National Law Journal. The Nelson Mullins website says the firm has more than 500 attorneys and “government relations professionals” in offices throughout the Carolinas, Atlanta, Boston, Florida, Tennessee, West Virginia and Washington, D.C.

Dick Riley, a Democrat who served as South Carolina’s governor from 1979-1987 and as U.S. Secretary of Education from 1993-2001 under President Bill Clinton, is a senior partner at the firm.

David Wilkins, a Republican who was the U.S. ambassador to Canada under President George W. Bush from 2005 -2009 after serving 11 years as the S.C. House speaker, heads the list of the firm’s South Carolina “government relations/lobbying team,” though he is not a registered lobbyist with the state. Wilkins served as chairman of Haley’s gubernatorial transition team when she was first elected governor in 2010; he also is chairman of the board of trustees at Clemson University, where Haley graduated.

The Nelson Mullins website says that “our government relations professionals routinely engage in,” among other things, “direct lobbying of members and staff of the General Assembly, the Governor’s Office and State agencies.”

The firm’s listed lobbyists include Dwight Drake, a Democrat who worked for then-Govs. Riley and John West, and made an unsuccessful bid for governor in 2010; and Harry Cato, a Republican who was in the S.C. House from 1991-2010, including a tenure as the House speaker pro tempore, and joined the firm on a contract basis the month after he left the Legislature.

(In his 2013 and 2014 lobbyist reports filed with the State Ethics Commission, Cato said he owns a 25 percent share of a 2,000-square-foot rental condominium in Myrtle Beach, noting that current House Majority Leader Bruce Bannister, R-Greenville, has a 50 percent interest.)

Burns replaced Haley’s former chief of staff, Ted Pitts, a Republican who served in the S.C. House from 2003 until 2010. Pitts left Haley’s office to take a job with the South Carolina Chamber of Commerce, which paid four lobbyists in 2013 a total of $173,943, records show.

Big Lobbyist Incomes

The Nerve’s review of lobbyist disclosure reports with the State Ethics Commission found that Nelson Mullins lobbyists collectively received at least $1,221,410 in income from mostly major corporate clients they represented in 2013 and this year through May. Burns was not a registered lobbyist when he worked at Nelson Mullins’ Columbia headquarters; the law firm’s website said his legal practice included representing consumer financial service institutions and loan service businesses, though no specific companies were named.

In his income-disclosure statement filed in March with the Ethics Commission, Burns reported that five registered lobbyists – Cato, Drake, Edward Poliakoff, Jennifer Robinson and Kathy Shannon – worked for Nelson Mullins in 2013, representing a total of 17 mostly corporate clients before state government.

He listed their lobbyist income at $200 for each client, though in a written supplement provided by Hayden, the Ethics Commission’s director, to The Nerve, he noted he was unable to enter “in excess of” $200 in his electronic filing, and that the listed amounts were “in excess of the $200 statutory threshold.”

The Nerve’s review of lobbyist disclosure forms filed with Ethics Commission show that the five lobbyists collectively earned last year at least $701,161 in income from their clients, which included major national or South Carolina corporations such as Altria, AT&T, Blue Cross Blue Shield of South Carolina, BMW, Cigna, GE, MillerCoors, State Farm, TIAA-CREF and Wal-Mart.

Drake led the lobbyist group last year with $194,345 in income, followed by Poliakoff, $178,000; Shannon, $168,317; Cato, $133,054; and Robinson, $27,444, The Nerve’s review found.

Through May this year, four of those lobbyists – Cato, Drake, Poliakoff and Shannon – received a total of at least $520,248 in income from mostly corporate clients, including Advance America, Apple, HealthSouth and Humana, records show. Drake again led the group with $183,902 in income, followed by Poliakoff, $118,000; Cato, $112,360; and Shannon, $105,985.

Advance America, Altria, AT&T, Blue Cross Blue Shield, GE, State Farm and Wal-Mart, or related affiliates or political action committees, collectively contributed at least $45,000 to Haley’s gubernatorial campaigns in 2010 and this year, campaign records show.

Besides major corporate clients, Nelson Mullins lobbyists also have represented Richland County and the South Carolina Research Authority (SCRA), a state-created technology and real estate company. In 2013, the five lobbyists received a total of $9,000 in income from SCRA; Richland County paid a total of $34,000 in lobbyist income to Poliakoff in 2013 and through May this year, records show.

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