House Ethics Fines: Punishments Fitting the Crimes?

April 1, 2015

Investigative Reports

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SC House of RepresentativesAs of the end of December, 12 sitting S.C. House members had paid $100 fines imposed by the House Ethics Committee after they took office for late filings of campaign or income-disclosure reports, committee records show.

For similar types of offenses, more than a dozen people who unsuccessfully sought House seats were hit over the past three years with separate $5,100 fines by the committee – several facing multiple $5,100 fines, a review by The Nervefound.

One candidate told The Nerve she was threatened with court action if she didn’t settle her collective $10,200 in fines with the committee, which ultimately decided last week to reduce her total tab to $100.

“I just want my good name restored – it’s what I came up here for,” Laura Sterling of Bluffton told the committee at the end of the hearing in the Blatt Building on the State House grounds.

The committee is made up of 10 sitting House members, two of whom – Reps. Jenny Horne, R-Dorchester, and David Weeks, D-Sumter and the committee’s vice-chairman  – each paid a $100 fine since 2012 for filing violations, according to the committee’s online list.

Other current House members on the list who were fined $100 after taking office for filing violations include Reps. Terry Alexander, D-Florence; Bill Bowers, D-Hampton; Nelson Hardwick, R-Horry; Chris Hart, D-Richland; Phyllis Henderson, R-Greenville; David Mack, D-Charleston; Joe Neal, D-Richland; Joshua Putnam, R-Anderson; Gary Simrill, R-York; and Seth Whipper, D-Charleston. All 10 members paid their fines; Mack and Neal paid multiple fines, the list shows.

Contacted Tuesday by The Nerve, Rep. Kenny Bingham, R-Lexington and the Ethics Committee chairman, denied his committee uses a double standard when imposing fines.

“It’s absolutely untrue,” he said. “We have not reduced any House members’ fines, nor have we charged them any differently.”

Bingham, who took over as committee chairman during the 2013 legislative session, also denied that current House members received special help from his committee to prevent their fines from accumulating, noting, “Anybody gets the same help.”

As of Dec. 31, 116 individuals – mostly unsuccessful House candidates – had collectively received 271 fines totaling $603,090, of which 108 fines were for $5,100 each, totaling $550,880, The Nerve’s review found. One candidate had 13 separate $5,100 fines.

Dan Harvell, chairman of the Anderson County Republican Party, was at last week’s Ethics Committee hearing to appeal fines he said totaled $10,700 for several reporting violations that occurred after an unsuccessful bid for a House seat in 2006. He told The Nerve afterward that the committee decided to reduce his tab to $400.

“It was a totally dormant (campaign) account that hadn’t been touched since 2006,” Harvell said, adding, “I didn’t solicit one contribution from the time that was over until this time.”

Sterling believes the total amount of fines imposed by the committee is much higher than listed, noting the online list shows her as owing $5,100 – half of what she said she was told she owed before last week’s settlement over reporting violations that occurred after the state Supreme Court disqualified her in 2012 as a House candidate.

Under a 2011 amendment to the state ethics law, incumbents or candidates for public office who don’t file required quarterly campaign or annual income-disclosure reports face an initial fine of $100 if the report is not filed within five days after the established deadline. The fine grows to $10 per calendar day for the first 10 days after notice has been given, then $100 per calendar day up to $5,000 for each report that is not filed.

If the required report still isn’t filed after the maximum civil penalty has been levied, the person can face misdemeanor criminal charges punishable by a maximum sentence of 30 days in jail or a $500 fine for a first offense, and a maximum sentence of one year in prison and a $5,000 fine for third and subsequent offenses.

Asked by The Nerve if Ethics Committee staffers have warned those who owe fines that they could face civil court action if the refuse to pay anything, Bingham replied, “Yes, that’s clearly an option,” though he added no one has been taken to court.

He also said his committee has not requested that criminal charges be filed against anyone. But the possibility remains, he said.

“If, at the end of the process, people ignore us or refuse to pay, then we will use numerous means and methods,” he said. “We will collect whatever we feel is fair and reasonable.”

Weak Watchdogs

Under state law, the House Ethics Committee polices sitting House members and candidates for election to House seats for violations of the state Ethics Act. The Senate Ethics Committee has similar jurisdiction over senators and candidates for Senate seats; the State Ethics Commission oversees other state and local elected officials and candidates for those offices.

But neither the State Ethics Commission nor the legislative ethics committees have garnered a reputation in recent years for being tough on elected officials under their respective jurisdictions. The House Ethics Committee, for example, took no action against then-House Speaker Bobby Harrell, R-Charleston, before he resigned from office in October after pleading guilty to criminal ethics charges related to his campaign account. That case stemmed from a public-corruption complaint filed in 2013 with S.C. Attorney General Alan Wilson by the South Carolina Policy Council – The Nerve’s parent organization.

And The Nerve in October revealed that Bingham, co-owner of Cayce-based American Engineering Consultants Inc., had not publicly disclosed contracts his company received from several state agencies, though he contended at the time he wasn’t required to do so under state ethics law.

The Senate Ethics Committee’s only high-profile case it can point to in the past two years was the 2013 hearing for then-Sen. Robert Ford, D-Charleston, who resigned before the hearing was completed and pleaded guilty in January to criminal ethics charges related to his campaign account.

The Nerve also reported about correspondence last year between a citizen and Senate Ethics Committee Chairman Luke Rankin, R-Horry, in which Rankin warned the citizen, who had informed Rankin about potential ethics violations involving another senator, that he could be prosecuted by the attorney general for revealing confidential information outside the committee.

As for the State Ethics Commission, Herb Hayden, the commission’s longtime director, told The Nerve in 2013 in response to a state Freedom of Information Act request that a letter then-commission lawyer Cathy Hazelwood wrote to Gov. Nikki Haley had been destroyed. Hazelwood in the letter directed Haley’s campaign to reimburse the state for the cost of a taxpayer-funded security detail for Haley, a Republican, during a trip she took in 2013 to a North Carolina resort for a fundraiser by a foundation supporting GOP N.C. Gov. Pat McCrory.

Hayden, who overruled Hazelwood, claimed the letter was not a public record because it was never sent to Haley. But after The Nerve revealed in December 2013 that it had obtained a copy of the letter and that the letter had been sent by Hazelwood to an attorney for Haley, the not-for-profit South Carolina Public Interest Foundation filed a lawsuit against Hayden and the commission, claiming they had violated the FOIA. In a settlement of the suit last October, a judge ruled that Hayden falsely told The Nerve that the letter had been destroyed, though Hayden contended in the consent order that the “falsehood” was “not intentional.”

The Nerve in 2013 reported that the Ethics Commission cut a deal with Haley – after more than a year of secret negotiations  – in which she agreed to pay a $3,500 fine based on a reduced list of campaign-reporting violations while governor.

Haley, who was first elected governor in 2010, was fined $100 in April 2012 for a late campaign report when she was a House member, according to the House Ethics Committee’s online list. The fine was paid, the list shows. The committee in 2012 twice cleared her of more serious alleged ethics violations when she was a House member.

Two other recently departed House members – Eric Bikas, R-Pickens, and Tracy Edge, R-Horry – owe thousands in ethics fines, according to the online list. The Nerve previously reported about their cases.

‘Not One of You’

Sterling, who was among some 250 candidates kicked off primary election ballots statewide in 2012 after a state Supreme Court ruling, doesn’t believe the House Ethics Committee had treated her fairly up until last week when it reduced fines against her to $100 from a total of $10,200.

Her alleged violations, according to committee members who spoke at last week’s meeting, was failing to file a quarterly campaign report and submitting another one late after she was removed from the GOP primary election ballot in 2012 for the House seat now occupied by Rep. Weston Newton, R-Beaufort.

Sterling, who made her first run for public office, told The Nerve she had collected only about $500 in campaign contributions before the election and nothing afterward. She said she closed her campaign bank account but failed to immediately shut down her online campaign reporting account with the State Ethics Commission.

“I was not a candidate; I was never a candidate,” Sterling said at last week’s hearing, referring to the 2012 Supreme Court ruling that invalidated newcomer candidates who didn’t file certain paperwork, which wasn’t required of incumbents.

Sterling told The Nerve that Ethics Committee attorney Jane Shuler informed her before last week’s hearing that she “could make an offer to settle this fine, or they would file a (civil) judgment.”

“She (Shuler) told me her job was to follow up on all these unpaid ethics fines,” Sterling recalled. “I told her I didn’t have an appeal.”

Sterling said in early 2013, she met with Bingham and another staff attorney in a House office to discuss her case, noting she thought at the time her total fine was about $5,000, though neither Bingham nor the attorney “could tell me then what my fines were.”

“I was sitting in a chair, and he was standing over me,” Sterling recalled. “He said, ‘We’re not here to hurt you, Miss Sterling,’ and I almost cried because it was hurtful.”

Sterling also remembered Bingham telling her then, “If you become a House member, you’re one of us,” to which she said she replied, “I’m not one of you.”

At last week’s hearing, Bingham said when he took over as the Ethics Committee chairman in December 2012, there were a “large number” of House candidates with outstanding fines, noting the committee’s task was to “let’s clean it up, one way or the other.”

Bingham told Sterling at the hearing that during their 2013 meeting, he informed her the committee had “not taken a position … in terms of assessing or reducing fines,” adding, “So we had to work through that process, and it took a long time.”

Bingham told The Nerve that because state law doesn’t specifically allow the committee to reduce fines, his office sought out “inside and outside counsel,” who advised staff that “nothing prevents you from doing that (reducing fines).”

Still, Bingham said under state law, candidates who have open campaign accounts must file campaign-disclosure reports until those accounts are closed; otherwise, he said, “you could be collecting or spending it (campaign funds) nefariously.”

He acknowledged, though, that “someone who collects $100,000 in a campaign account is clearly different from someone who collects $50.”

“I can’t un-write the law, but I can be reasonable,” Bingham said.

Sterling contends that Bingham’s office wasn’t reasonable with her for two years, providing The Nerve with a copy of a Feb. 19, 2013, “public reprimand” issued to her by the committee – and signed by Bingham – for a late filing of her July 2012 campaign-disclosure report, informing her that she owed a $5,000 fine.

She said although she is relieved her total $10,200 fine was reduced last week to $100, she worries the committee’s online records won’t accurately reflect that her case is closed.

“What about my name showing up on those lists that I’m a bad debtor?” she said. “It seems like it’s a deliberate attempt to damage my good name.”

South Carolina Policy Council research intern Danny Morris contributed to this story. Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.

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