Harrell-Affiliated PAC Flying Below the Radar

May 27, 2014

Investigative Reports

Print Friendly, PDF & Email

RadarSince 2009, a political action committee with ties to House Speaker Bobby Harrell has donated at least $214,500 mainly to Republican House candidates, plus given more than $320,000 to the House Republican Caucus Committee, which has cut bigger contribution checks to GOP candidates, including Harrell, records show.

But the Palmetto Leadership Council (PLC) for now has quit disclosing its contributions and expenditures to the State Ethics Commission – and the ethics watchdog agency says it doesn’t plan to do anything about it.

The PLC did not file its campaign disclosure report for the first quarter of this year, due by April 10. The Nerve in January 2013 reported that the PLC made contributions to all five Republican members of the 10-member House Ethics Committee, which, based on a May 12 ruling by Circuit Judge Casey Manning, must have priority over the state grand jury to consider ethics violation allegations against Harrell. S.C. Attorney General Alan Wilson has appealed Manning’s ruling to the state Supreme Court; a hearing is set for June 24.

The PLC was raising money as recently as Jan. 21, when it held a fundraiser at the private, upscale Palmetto Club within walking distance of the State House. Harrell was the featured guest at the event, according to a story then in The State newspaper.

And despite not filing a quarterly report, the PLC has donated at least $30,000 in the first three months of this year to the House Republican Caucus Committee, according to committee records filed with the State Ethics Commission.

Asked if the Ethics Commission plans to take any action against the PLC for not filing its most recent quarterly disclosure report, Cathy Hazelwood, the agency’s chief lawyer and deputy director, said in a recent written response to The Nerve, “We will do nothing because of the two federal court cases.”

She also said that like the PLC, political caucuses, including the House Republican Caucus Committee, are now considered “non-candidate” committees by the Ethics Commission and do not have to disclose their contributions or expenditures, given the recent federal court rulings. Individual candidates who receive contributions from those groups, however, still must report those donations, she said.

For the public, what that means is that they likely will no longer have any easy way to track contributions to and expenditures by the now-unregulated groups. And it raises questions about how much influence certain political groups such as the PLC and House Republican Caucus Committee have over the Ethics Commission.

Definition of ‘Committee’

In separate rulings in 2010 and 2012, federal judges said the state ethics law defining a “committee” as an “association, a club, an organization, or group of persons which, to influence the outcome of an elective office, receives contributions or makes expenditures in excess of five hundred dollars in the aggregate during an election cycle” was unconstitutional because it was “overbroad.”

Both rulings noted a “major purpose” test in determining whether a primary goal of a group was to influence the election of a candidate for public office.

The rulings meant that the plaintiffs in the two federal cases – South Carolinians for Responsible Government (SCRG) and South Carolina Citizens for Life (SCCL) – didn’t have to come under the jurisdiction of the State Ethics Commission.

South Carolinians for Responsible Government filed a lawsuit against the Ethics Commission after the agency notified it that it had to register with the state as a “committee” and file disclosure reports. The action came after SCRG in 2006 began airing radio advertisements supporting proposed school-choice legislation under consideration then by the General Assembly.

On its website, SCRG describes itself as a “statewide grassroots nonprofit organization that supports efforts to make government more efficient and accountable.” As for its school-choice positions, the organization says on its site that it is “firmly committed to the belief that every child in South Carolina deserves equal access to a wide range of classrooms – public, charter, magnet, independent and home school – in order to receive the most effective and appropriate instruction possible.”

South Carolina Citizens for Life, Inc., is a “non-profit, single issue, right-to-life organization devoted to restoring legal personhood to the unborn and to protecting innocent human life by eliminating abortion, infanticide and euthanasia from our society,” according to its website.

In advance of the November 2006 general election for a House seat, the SCCL had planned to distribute a direct-mail voter guide providing citizens with the candidates’ positions on various pro-life issues, as well as their political affiliations. The SCCL sued the Ethics Commission after failing to get either an informal or formal advisory opinion from the agency on the legality of the voter guides, according to court papers.

For the time being, in the Ethics Commission’s eyes, the PLC is lumped in the same category as the SCCL and SCRG, though The Nerve pointed out, citing the PLC’s previously filed campaign-disclosure reports, that the group routinely made direct campaign donations to candidates.

“The General Assembly has to re-define committee,” Hazelwood told The Nerve. “Until they do that, there is no definition for committee, and the PLC doesn’t have to do anything, major-purpose or not.”

“Because there are no committees,” Hazelwood continued, “there are no rules regarding how it spends its money … beyond not making excessive campaign contributions,” though she noted, “It was our position when non-candidate committees existed that we had jurisdiction over all of them.”

“The court decisions provide parameters for what the new definition should (be), but without a definition we can’t do anything,” Hazelwood said in a follow-up response, adding, “I’m not arguing that it (PLC) shouldn’t file once there is a committee definition since its stated purpose was to elect like-minded candidates.”

The General Assembly is considering ethics reform legislation that includes redefining committees, though it is unclear whether overall differences between the House and Senate versions of the bill (H. 3945) can be resolved this year. Both versions define committee as a group, including legislative caucuses and “non-candidate” committees, which has the “major purpose” of supporting or defeating one or more candidates for elective office.

Hazelwood told The Nerve that no one from PLC contacted the Ethics Commission about discontinuing filing its quarterly campaign-disclosure reports, and that her agency hasn’t contacted – nor does it plan to contact – the organization.

Efforts by The Nerve to reach PLC officials were unsuccessful. There is no listed street address – only a post office box number – in the organization’s prior campaign-disclosure reports, and its most recently listed phone number is disconnected.

Harrell Connections

As has been his longstanding practice with The Nerve, Harrell, who was elected to the House in 1992 and become the House speaker in 2005, did not respond to recent written and phone messages seeking comment. His spokesman, Greg Foster, recently said that Harrell does not control the PLC, though he raises money for the organization and is featured in its promotional literature, according to a story in The State newspaper.

Before the PLC website was discontinued in January 2013, Harrell was featured on the site’s home page with his picture and a written message that read in part: “The Palmetto Leadership Council is dedicated to a positive, bipartisan effort to find workable solutions to the major problems we face. We are building a unique coalition between leaders in the private sector and those of us engaged in public service.”

“Sadly, in government today, there is too much bickering and too little statesmanship,” Harrell also said in his message. “More than ever, we need elected officials who put service above self and public interest above politics.”

The Nerve’s review of the PLC’s campaign-disclosure reports covering 2009 through last year found that the organization donated a total of $75,000 in 2011 and 2012 to the State Legislative Leaders Foundation, which organizes the annual National Speakers Conference, a gathering of state House speakers from across the country. Harrell has been actively involved with the event, including hosting it in 2011 in Charleston, as The Nerve reported then.

Harrell’s brother, John Harrell, a Charleston attorney, also has been connected to the Palmetto Leadership Council. A screen shot of PLC’s website from February 2005 identified John Harrell as the PLC chairman.

“The Council is an enthusiastic group of business and political leaders who are committed to helping South Carolina become more productive and competitive in the knowledge-based economy,” John Harrell said in a message on the site.

Bobby Harrell appointed his brother to the state Judicial Merit Selection Commission, a 10-member legislatively controlled committee that nominates judicial candidates for election by the General Assembly. Under state law, Harrell controls half of the appointments to the commission.

In a complaint submitted in February 2013 to attorney general Wilson, the South Carolina Policy Council – the parent organization of The Nerve – alleged that Harrell’s appointment of his brother violated a state law banning elected officials from being in the position to discipline relatives in appointed public positions.

John Harrell did not respond to recent written and phone messages from The Nerve seeking comment.

How much the Harrell brothers’ involvement with the PLC has bolstered the organization’s bottom line is unknown. The Nerve’s review of PLC’s campaign-disclosure reports from 2009 through 2013 found that the organization took in more than $1.3 million in revenues – mainly individual donations of $3,500 from companies or their PACs, including Boeing and BMW, as well as statewide business groups.

During that period, the PLC made at least 202 contributions totaling $214,500 – mostly individual $1,000 donations to incumbent Republican House members. It also donated another collective $332,750 during the period to Republican organizations; the main beneficiary was the House Republican Caucus Committee, which received $290,750, records show.

From 2010 through 2012, the caucus committee made at least 82 donations in mainly $5,000 amounts, totaling $397,000, to GOP House candidates, including $5,000 to Bobby Harrell in September 2012, according to records. For the first three months of this year, the committee made at least 62 donations in $1,000 amounts to House candidates, though Harrell was not among that group, 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.