House Disclosure Statements Reveal Big Incomes

January 5, 2011

Investigative Reports

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The NerveS.C. Rep. Greg Delleney earned nearly $478,000 in legal fees in 2009 representing injured workers before the state Workers’ Compensation Commission, income disclosure records show.

Delleney, a Chester Republican, topped all current or former House members who reported personal income and benefits in 2009, either as direct payments from government agencies, or, as in the case of Delleney, fees approved by public agencies, according to The Nerve’s review of 123 statements of economic interests filed online with the S.C. Ethics Commission.

Combined with other public legal fees and lawmaker expense payments, Delleney’s total reported income and benefits for 2009 was $506,834.

“If you’re going to have a part-time Legislature, you’re going to have people who work for a living, and I make no apologies,” Delleney said when contacted recently by The Nerve.

By law, annual statements of economic interests, due by April 15 to the state Ethics Commission, must include all salaries or wages received in the previous calendar year by the filer and the filer’s immediate family from government agencies, said Cathy Hazelwood, attorney for the commission.  Income received from contracts between the filer’s employer and public agencies also has to be disclosed, she said.

The disclosures are intended to keep lawmakers from engaging in potential conflicts of interest resulting from their employment.

But nothing in the law requires a legislator to report his or her personal income “absent a contract” with a government agency, Hazelwood told The Nerve.

That means the statements don’t reflect a lawmaker’s total earnings or all potential conflicts of interest.

“There are areas of the ethics law that are vague and need to be looked at,” Rep. Roland Smith, R-Aiken and the House Ethics Committee chairman, told The Nerve.

Smith, who has been on the committee since 1992, said he couldn’t recall any recent complaints against House members dealing with their statements of economic interests.

Gov.-elect Nikki Haley last session sponsored a bill (H. 4271) when she was a House member that would have required lawmakers to report all sources of earned income, whether from public or private sources. Her bill, which died in the House Judiciary Committee, also would have banned state and local officials and their immediate families or businesses from entering into contracts with the “state or local jurisdiction of which he is a public official.”

The Lexington County Republican, however, was criticized last year during her gubernatorial campaign for not practicing what she preached: Only after prodding from the media did she disclose $42,500 in consulting fees she earned over a three-year period from Columbia engineering firm Wilbur Smith Associates while she was a lawmaker. Those fees were not reported on her statements of economic interests; although the firm did business with the state, Haley said her work didn’t involve state business.

Haley did report $110,000 in salary from her former job as a fundraiser for the Lexington Medical Center Foundation. Her 2009 statement of economic interests also included $28,773 in salary and expense reimbursements as a lawmaker.

Haley spokesman Rob Godfrey did not respond to recent written and phone messages from The Nerve.

As for his reported $477,964 in legal fees in 2009, Delleney replied: “People say, ‘He made $477,000 off the state.’ No, I did not. I made that off workers’ compensation insurance for my clients. … The Workers’ Compensation Commission is just a quasi-court. The state does not pay workers’ compensation attorney fees.”

Gary Cannon, the commission’s executive director, told The Nerve that lawyer fees must be approved by the commissioner hearing the case. Attorneys who disagree with their awarded fees can appeal to the full commission, he said.

Delleney said he doesn’t believe he has any conflict of interest as a legislator practicing law before the commission, explaining that the governor appoints commission members, and that he doesn’t vote on the commission’s budget.

Delleney wasn’t the only House legislator-lawyer who earned thousands of dollars in 2009 from workers’ compensation cases. Rep. Jay Lucas, R-Darlington and the House speaker pro tempore, earned $106,390 in workers’ compensation fees, while former Rep. Doug Jennings, D-Marlboro, received about $10,400, according to their statements of economic interests.  Jennings also reported earning more than $68,000 in legal fees for representing clients in state parole board hearings.

Neither Jennings nor Lucas responded to recent written and phone messages from The Nerve.

Determining an accurate ranking of lawmakers’ total reported public income often is difficult because of the way it is reported by some legislators. Take Rep. Murrell Smith, R-Sumter, for example.  A partner in a Sumter law firm, Smith reported a total of $252,053 in legal fees in 2009 from various state and local agencies, and another $528,395 in income as part owner of two medical supply firms that received Medicaid payments through the S.C. Department of Health and Human Services.

Those amounts would easily put Smith as the top public earner in The Nerve’s review, assuming that he received those payments.  But Smith told The Nerve that the reported legal and business income is “not coming directly to me.” Instead, he said, those amounts represented the totals paid to his law firm and medical supply businesses.

Smith said he earned “very little” from the fees paid in 2009 to the medical supply businesses, but “with the law firm, I do all right,” though he couldn’t provide specifics.

Of the 123 current or former lawmakers in The Nerve’s study who filed statements of economic interests in 2009, 74, or 60 percent, declared only their legislative compensation, The Nerve’s review found.

The Nerve reported in a series of stories in October that over a 2.5-year period beginning in 2008, the average annual cost of a state lawmaker was about $32,000. That included their annual $10,400 salary, plus another $12,000 for in-district expense payments, along with other expense reimbursements, including mileage and “subsistence” payments for hotels and meals while on legislative business.

Those findings were based on House and Senate compensation records provided to The Nerve under the S.C. Freedom of Information Act.

In The Nerve’s latest review of House members’ statements of economic interests for this story, the average reported legislative salary and benefits for 2009 was about $23,400.

The review also found that about two dozen House members reported income from full- or part-time public jobs, in addition to their legislative salary and benefits. Rep. Jackie Hayes, D-Dillon, topped that list, earning $82,115 in 2009 as Dillon High School’s head football coach and athletic director, according to his statement of economic interests.

A dozen House members reported receiving public retirement benefits, ranging from $21,343 for Roland Smith, a retired rural mail carrier, to $76,406 for retired educator Jimmy Bales, D-Richland.

Several House members, including Reps. David Hiott, R-Pickens, and Tommy Stringer, R-Greenville, filed statements but reported no public income. According to House records reported in The Nerve’s October series, Hiott and Stringer each received about $30,500 in legislative salary and benefits in 2009.

Stringer, a pension consultant, told The Nerve recently that it was his understanding he had to report only “any business you did with a government agency, which I don’t.”

“If I’ve been mistaken, I’ll go back and amend it,” he said. “We want to do what’s required.”

Hiott, who owns a printing company, told The Nerve that he went over his statement of economic interests with a House Ethics Committee staffer before submitting it.

“Evidently, he said it was OK,” Hiott said. “I wasn’t intentionally trying to hide anything.”