Law, Lobbying Firms Pay for Conference

July 29, 2010

Investigative Reports

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The NerveS.C. House Clerk Charles Reid, who is one of the highest-paid state government employees, and other House staff members have dedicated an unknown amount of their work time to coordinating fundraising and planning for an upcoming legislative conference in Charleston that includes a party at the home of House Speaker Bobby Harrell.

The event, the 64th annual meeting of the Southern Legislative Conference, is a bipartisan, five-day gathering scheduled to begin Saturday and end Wednesday. It features policy sessions on a range of issues, from economic development to energy and the environment.

The conference, chaired by Harrell, is being bankrolled by high-dollar donations from corporations, law firms and other big-league players who deal regularly with the S.C. General Assembly.

The financial supporters of the conference also include utilities and many lobbying groups, according to a Columbia lobbyist who spoke with The Nerve only on the condition of anonymity. “They all make huge contributions to help put this on,” the lobbyist says.

The individual did not want to be named for fear of retribution from legislative leadership.

The lobbyist described the event as “a good place to hang out with legislators” and said it has “all sorts of policy stuff.”

The Nerve has obtained an official House e-mail and related material indicating that Reid and other staff members of the chamber have worked on taxpayer time to help put together the gathering.

But how much time, and how many dimes, is unclear.

Officials associated with the event, at both the state and conference levels, declined to return phone calls or answer e-mailed questions from The Nerve.

The Southern Legislative Conference, based in Atlanta, is part of a nationwide network of four regional groups organized under the Council of State Governments, a nonprofit state government advocacy organization.

The Council of State Governments is headquartered in Lexington, Ky., and also maintains an office in Washington, D.C.

States, including South Carolina, pay population-based dues for membership in the Council of State Governments.

“It varies by state,” says Michael McCabe, director of one of the regional groups, the Midwestern Legislative Conference in Lombard, Ill.

Efforts by The Nerve to determine how much South Carolina’s dues are and who has contributed to the Charleston event, and in what amounts, were met with a lack of cooperation from both state and Southern Legislative Conference officials.

Reid did not supply facts The Nerve sought in a S.C. Freedom of Information Act request regarding who donated to the conference; how much they gave; which state employees have spent work time on the event; and how much time and in what capacity.

Technically, Reid, who has been a member of the South Carolina Bar since 1993, complied with the law because he responded in writing within 15 business days. But he did not provide the information sought.

Regarding conference donors, Reid said “the Southern Legislative Conference (SLC) is a 501(c)(3) and separate from the South Carolina House of Representatives. Although the flier requests that donations be sent to Charles Reid (to then be forwarded to SLC) the House has not maintained a record of the check donations.

“In reality many of the donors have mailed their checks directly to SLC. Thus, SLC has maintained the records of contributors/contributions for the conference. Mrs. Colleen Cousineau is the executive director for SLC and you can contact her directly …”

Concerning state employees logging time on the conference, Reid said “the House has no information or documents pertinent to this request.”

The Nerve obtained a copy of an e-mail from an employee in Harrell’s office, sent from an official House e-mail address during business hours. The e-mail was sent to unknown recipients.

The salutation in the e-mail: “Dear SLC Palmetto Donors.”
Those are the ones who donated $25,000 or more. The e-mail begins and ends with a thank you, tells them what their contributions entitle them to and provides details about registering for the conference.

In the recently ended legislative session, House members took three weeks of furlough to save money amid tight budget times. But House staffers did not take that unpaid furlough.

Fundraising Flier

A conference fundraising flier obtained by The Nerve suggests that Reid himself has overseen contributions to the event.

“All checks should be made payable to the ‘The Council of State Governments’ and forwarded to the attention of Charles F. Reid, Clerk of the House of Representatives, at P.O. Box 11867, Columbia, SC 29211,” the flier says. “All funds will be deposited in a special account managed by the Council of State Governments and the South Carolina Host State Committee.”

The estimated economic impact of the conference is more than $3.5 million “for South Carolina,” and the number of expected attendees approaches 2,000 from 15 Southern states, according to a news release posted Wednesday on the S.C. Statehouse Blog.

The release says “no state general funds were appropriated in the budget to host” the event; rather, “significant private sector donations were utilized.”

The statement goes on to quote Harrell saying it was important to “independently raise the funds needed to host this event. I want to thank the many generous members of our business community for all they have done to ensure that South Carolina, and all that our state has to offer, is properly and positively displayed during this conference.”

Although the news release says no state general fund dollars were appropriated to host the event, officials didn’t specify whether other public dollars were used for the conference.

The lack of information from state and conference officials also leaves other key questions unanswered:

  • Is it appropriate for state employees to dedicate work time to the conference?
  • Who donated to the event and how much did they give?
  • How much does the state pay to belong to the Council of State Governments, and what is the value of that membership to taxpayers?

The 2009 meeting of the Southern Legislative Conference took place in Winston-Salem, N.C., and generated controversy in South Carolina.Seven people – four S.C. legislators, a lobbyist for the South Carolina Association of Realtors and two employees of the Charleston Area Convention and Visitors Bureau – flew to the conference on a state-owned airplane, according to an Aug. 20, 2009, report in the Hilton Head Island Packet.

The flight cost about $3,800, the Island Packet story says.

The lawmakers on it were Reps. Bill Herbkersman and Shannon Erickson, both R-Beaufort; James Merrill, R-Berkeley; and Anne Hutto, D-Charleston.

Have any legislators booked a state plane to attend this year’s conference?

“I spoke with our pilot that does flight scheduling and we do not have any flights scheduled at this time from July 31st through August 4th,” Hugh Tuttle, chief pilot for the S.C. Aeronautics Commission, said in an e-mail to The Nerve.

The event schedule features three national figures with Palmetto State roots: Federal Reserve Board Chairman Ben Bernanke, who grew up Dillon; U.S. Sen. Lindsey Graham, R-S.C.; and Democratic U.S. House Majority Whip James Clyburn of Columbia.

The South Carolina delegation also will feature some recognizable names in state government, as well as a bevy of lobbyists and lawyers who work the State House.

Lawyers and Lobbyists

“I’ll be attending,” says former Columbia Mayor Bob Coble, a registered lobbyist and attorney. “It’s a very prominent event. I think it’s a real plus for Speaker Harrell and those who got it to South Carolina.”

Coble is a member of the Nexsen Pruet law firm’s economic development team.

Many companies retain Nexsen Pruet, headquartered across the street from the state Capitol, in an effort to obtain special tax breaks and other incentives from the Legislature.

Courtesy of state taxpayers, legislators routinely oblige, championing the freebies as fuel for job creation in what critics decry as politically driven economic development.

With sessions such as “promoting the creative economy,” “alternative fuel technologies” and “economic incentives and state tax systems,” economic development figures prominently among issues on tap at the Charleston conference.

South Carolina presenters at the event include Shannon Baxter-Clemmons, director of the S.C. Hydrogen and Fuel Cell Alliance; William Gillespie, the state’s chief economist; and Doug Woodward, an economics professor at the University of South Carolina in Columbia.

The conference will feature environmental topics, too, such as “saving America’s wetlands” and, in the aftermath of the BP oil spill calamity, “the characteristics and fate of oil in the deep Gulf of Mexico.”

Coble says the conference needs sponsors like any event. “I’m sure there’s a cost involved that the firm would cover.”

Does he know what that cost was? “I don’t, but I’m sure it’s substantial.”

Was Coble pressed to financially contribute to it, in a sort of quid pro quo fashion?

“Absolutely not; honored to go to it,” he says, adding that he has been to almost every Nexsen Pruet meeting about the conference. “And we’re delighted to be a sponsor.”

Dwight Drake, a well-known lobbyist and a partner in the politically connected Nelson Mullins law firm, which also is based within walking distance of the State House, says he’s 50-50 as to whether he will attend the conference.

“I’ve participated in them before,” Drake says.

Responding to questions, he says, “I have not been pressured to contribute, nor to go.”

Drake says he isn’t sure whether Nelson Mullins gave money to the conference because he has not been involved in it. But, he says, “The likelihood is that the firm would be supportive of something like this.”

The fundraising flier offers five levels of financial support and describes what donors will receive for their money:

  • “Sandlapper ($2,500 to $4,999): Name badges with appropriate ribbons designating donation levels.”
  • “Cypress ($5,000 to $9,999): Recognition in the final conference brochure signifying their level of participation.”
  • “Magnolia ($10,000 to $14,999): “One invitation (including a guest) to a special reception with the (Southern Legislative Conference) Executive Committee for each $5,000 donated.”
  • “Silver Crescent ($15,000 to $24,999): One complimentary registration for the conference for each $2,500 donated.”
  • “Palmetto ($25,000 and above): All Palmetto contributors donating $25,000 or  more shall receive an invitation (including one guest) to a special event recognizing their significant contribution with Speaker Harrell, his wife Cathy, and other conference leaders at the Harrell Family Home at 28 South Battery, across from White Point Gardens at the Battery.”

The Host State Committee consists of Harrell, Reid and a diverse group of 12 House members – seven Republicans and five Democrats – from all regions of the state, according to a state government website for the conference.The homepage of the site says it is “produced and maintained by Legislative Printing, Information and Technology Systems in conjunction with the South Carolina Host Committee.”

A “Contact Us” button on the homepage takes visitors to information for getting in touch with Karen LaRoche in Reid’s office.

Neither Reid, whose yearly pay is listed at nearly $145,000 in the state salary database, nor House communications director Greg Foster responded to phone messages and e-mailed questions from The Nerve.

Foster, who is Harrell’s spokesman, earns almost $70,000.

The salary database lists 34 House staffers who earn more than $50,000, including an executive assistant to Reid.

Earlier this week, people answering the phones in Reid’s, the assistant’s and LaRoche’s offices said they all had gone to Charleston for the conference.

As for the membership dues South Carolina pays to the Council of State Governments, Mary Branham, a spokeswoman for the organization, referred questions to Southern Legislative Conference director Cousineau, who did not return three phone messages.

The state budget for the current fiscal year, and the state’s 2009-10 spending plan, contain provisos for Council of State Governments dues. But the provisos do not list the amounts.

“You’re not going to see it in the Appropriations Act itself,” says Les Boles, director of the Office of State Budget. Instead, the figures are rolled into the Legislature’s operating funding, Boles says.

Reach Ward at (803) 254-4411 or eric@scpolicycouncil.com.