Governor’s Ethics Case Sparks Support for Full Income Disclosure by Legislators

September 4, 2012

Investigative Reports

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CashGov. Nikki Haley’s legacy as a state elected official, presently a work in progress, could ultimately include being a catalyst for more sunlight on legislators’ financial conflicts of interest.

It’s safe to say Haley didn’t set out to make that issue part of her record via the circuitous route she has traveled on it.

But the proverbial train might have left the station on this course.

In the 2011-12 session of the General Assembly, which ended in July, at least three bills were introduced to ratchet up recusal and reporting requirements when lawmakers face a financial conflict of interest in the their legislative duties.

All three proposals died on the vine.

Next year could be a different story, however.

Currently, legislators must report only their income from public sources and private employers that have a contract with a public entity. Lawmakers must do so by April 15 on a yearly statement of economic interests.

Those forms fall under the jurisdiction of the House and Senate Ethics committees, which are responsible for policing lawmakers’ compliance with state ethics laws.

Recently, the chairmen of both committees told The Nerve that they are working on ethics reform legislation for 2013 that will include requiring legislators to disclose all of their income sources – public and private.

“I think we need to get full disclosure on all sources of income,” said Senate Ethics Chairman Wes Hayes, R-York.

House Ethics Chairman Roland Smith, R-Aiken, said that will be the main thrust of his bill.

Sen. Larry Martin, R-Pickens and chairman of the Senate Judiciary Committee, which would get the first pass at such legislation in the Senate, told The Nerve last week that he too supports full income disclosure for lawmakers.

And two weeks ago, Haley flew around the state promoting the idea along with four other ethics reform proposals.

All of this follows an ethics case against Haley, in which the House Ethics Committee investigated and tried a sitting governor for the first time.

Republican activist and fundraiser John Rainey of Camden brought the case. It centered on allegations related to Haley’s work for the Lexington Medical Center Foundation and the Wilbur Smith Associates engineering and consulting firm while she was a House member.

Haley was elected to the House in 2004, serving in the chamber until winning the governorship in 2010.

She has uniformly denied Rainey’s charges. In a nutshell, he alleges that Haley used her position in the House for personal gain. The House Ethics Committee in June found Haley not guilty on all counts.

The matter is not quite over, though. The S.C. Supreme Court has agreed to consider whether it can go forward in state court.

But regardless of the outcome in the court system, the case has given much more life to the notion that legislators should reveal the identities of everyone they’re earning money from – so that their constituents can better determine on whose behalf lawmakers might be acting.

It’s not a new idea.

When the latest legislative session began in January 2011, then-Senate President Pro Tempore Glenn McConnell, R-Charleston, introduced a bill to tighten recusal requirements for lawmakers facing conflicts of interest.

The bill, S. 212, would have added specifics to when legislators cannot participate in matters in which they have an economic interest: on the floor of the House and Senate and during committee and subcommittee proceedings.

And if lawmakers with a conflict “participate in any manner” on something related to it, they could not be listed in the legislative journals as abstaining from voting on that issue, according to the bill.

As it stands, some legislators evidently weigh in on certain things before they get to the floor, and then abstain from voting on them at that point.

Six senators co-sponsored McConnell’s bill, but no action was taken on it for the rest of 2011. Then, about a week before McConnell became lieutenant governor in March, the proposal emerged from the Senate Judiciary Committee, which he had long chaired.

But the bill died on the Senate floor when the session ended in June.

Two voice messages each last week to three of the co-sponsors – Sens. Phil Shoopman, R-Greenville; Chip Campsen, R-Charleston; and Harvey Peeler, R-Cherokee and the Senate majority leader – were unreturned.

Although Hayes, the Senate Ethics Committee chairman, did not sign onto the bill, he says he might understand the intent behind it.

“I think that really on a lot of matters, the really tough work and votes comes at the committee and subcommittee levels,” he says. “If that is what they’re trying to do (extend recusals to those levels) I can see the merit in that.”

Another bill, S. 1353 by Republican Sen. Mike Rose of Dorchester County, made it through the Senate but timed out in the house.

That bill would have required people who leave public office to file a “closeout” statement of economic interests within 30 days of exiting their post.

A third measure, S. 161 by Shoopman, was aimed at prohibiting legislators who are state employees, directly or as contractors, from voting on the state budget and other bills that affect their employers.

Shoopman’s bill, which never received any action, also mandated a two-thirds vote at all stages to increase lawmakers’ pay or benefits.

Although none of the three bills passed, the Haley case has sparked new interest in full income disclosure for lawmakers. Whether that translates into action in 2013 remains to be seen.

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