Lawmaker Campaign Accounts Used for Club Dues

January 26, 2015

Investigative Reports

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Private ClubOn two dozen occasions since 2013, S.C. Sen. Billy O’Dell spent campaign funds on dues to two swank private clubs – the Palmetto Club and Capital City Club – located within walking distance of the State House, his campaign reports show.

The Abbeville County Republican and Senate General Committee chairman also has spent campaign money over the past two years to pay dues to the Abbeville Opera House, Anderson Area Chamber of Commerce, Greenwood Area Chamber of Commerce, Honea Path Civitan Club, S.C. Republican Party and National Rifle Association, according to the quarterly campaign reports filed with the State Ethics Commission.

The total tab came to $5,676, though in many cases with the Palmetto and Capital City club entries, O’Dell also lumped in the cost of lunches with unnamed constituents. Individual entries ranged from $76 to $806.

O’Dell, who was first elected to the Senate in 1988, isn’t the only legislative leader spending campaign funds on memberships to various organizations.

A review by The Nerve of campaign reports found that of the collective 28 committee chairpersons in the House and Senate, at least 21 spent campaign funds on labeled dues or membership fees in their most recent election cycles (2014 election for House members, 2016 election cycle for senators). The top five spenders, according to campaign reports, during the period were as follows:

  • O’Dell:  $5,676;
  • Rep. Bill Sandifer, R-Oconee and House Labor, Commerce and Industry Committee chairman:  $2,771;
  • Sen. Wes Hayes, R-York and Senate Banking and Insurance Committee chairman:  $2,336;
  • Rep. Jimmy Bales, D-Richland and House Invitations and Memorial Resolutions Committee chairman:  $2,052; and
  • Senate President Pro Tempore Hugh Leatherman, R-Florence and Senate Finance Committee chairman:  $1,789.

The total amount spent by the 21 committee chairpersons during the most recent election cycles for listed dues or membership fees came to at least $21,808, The Nerve’s review found.

In terms of the total number of groups receiving campaign-financed dues, Hayes, the former longtime Senate Ethics Committee chairman, led all committee chairpersons with 22 organizations including, for example, the Arts Council of York County, Historic Rock Hill, Rock Hill Elks Club, Rock Hill Kiwanis Club, Good Folks of York County, Culture and Heritage Museums of York County, Greater York Chamber of Commerce, York County Republican Women, Northwestern High School Choral Boosters, Catawba Riverkeeper Foundation, Mothers Against Drunk Drivers, Sierra Club, National Ford Land Trust and Friends of the Conservatory at Winthrop University, his campaign reports show.

Ethics Opinions Trump Law?

Under state law, the House and Senate police themselves for ethics violations through their respective ethics committees, though government watchdogs, including the South Carolina Policy Council – The Nerve’s parent organization – have called for an end to self-policing.

The use of campaign funds for memberships in partisan and non-partisan groups is allowed by both chambers with few restrictions, according to formal advisory opinions issued by the ethics committees,The Nerve’s review found. The Policy Council and others contend that campaign funds should be used only for narrowly defined campaign purposes.

And it is questionable whether the advisory opinions dealing with organization dues comply fully with state ethics law (Section 8-13-1348 of the S.C. Code of Laws), which bans public officials from using campaign funds to “defray personal expenses which are unrelated to the campaign or the office if the candidate is an officeholder.”

Hayes, Leatherman and O’Dell did not return phone or written messages Friday from The Nerve seeking comment on their use of campaign funds for memberships. Leatherman, 83, who was first elected to the Senate in 1980, has spent campaign funds since 2013 for memberships in the Greater Florence Chamber of Commerce and two other organizations – Florence County Progress, the private-sector arm of the Florence County Economic Development Partnership, according to its website; and Young Professionals of Florence, according to his campaign reports.

The Nerve last February revealed that over the prior six years, Leatherman had spent more than $600,000 from his campaign account, though he had faced no opposition in either the 2008 or 2012 elections. The expenditures over the period included more than $90,000 in Christmas ornaments and gifts for unnamed constituents, $17,500 to a school foundation whose governing board included his wife, and more than $16,500 for meals for unnamed recipients at the Palmetto, Capital City and former Summit clubs.

Contacted Friday by The Nerve, Bales, who was first elected to the House in 1998, said he “really didn’t know” how the $1,000 annual dues he paid last year to the House Democratic Caucus was spent.

“I’ve never really seen the (caucus) budget in 16 years,” he said. “This last year they made some of us give to the Democratic Caucus for candidates in tough races.”

“I hope in this new ethics bill there will be more specifics on what you can give money to,” he added.

Sandifer ‘Complying with the Law’

After leaving a phone message Friday with Sandifer, Trey Harrell, an attorney with the Strom Law Firm in Columbia and son of ex-House Speaker Bobby Harrell, R-Charleston, who resigned from office after pleading guilty on Oct. 23 to misspending campaign funds, contacted The Nerve, saying he had been asked by Sandifer to do so.

Trey Harrell said he was not representing Sandifer, who was first elected to the House in 1994, as an attorney in any particular legal case, but rather that Sandifer had retained the Strom Law Firm for “advice and consulting, and to make sure he’s in line with the ethics law.”

The Nerve’s review of Sandifer’s latest campaign report, filed on Jan. 11, shows that Sandifer paid the law firm $7,500 on Nov. 7 for “Counselling (sic) and Accounting.” Rep. Brian White, R-Anderson and the House Ways and Means Committee chairman, paid the firm $7,500 on Oct. 30 for “Accounting and Consulting Services,” according to his campaign report filed on Jan. 14.

The Nerve on Oct. 6 reported that over the previous three years, Sandifer spent nearly $18,000 in campaign funds on credit card payments for unspecified conference expenses – on top of the approximately $9,500 that the sponsors of 12 mostly in-state coastal conferences collectively spent on him during the period.

On Oct. 8, The Nerve reported that White had contributed more than $20,000 in campaign funds to a technical college foundation where his wife works and a charitable organization where she is a board member.

“They (Sandifer and White) didn’t come to us because law enforcement contacted them,” Trey Harrell told The Nerve. “They came to us because the laws are so gray. We just explain to them their filings, their expenditures, and what our understanding of the law is.”

Harrell said John Alphin, an attorney in the Strom Law Firm, who he noted is experienced in tax issues, has been “doing the majority” of the consulting work. Harrell declined to say whether other state legislators have retained the firm, founded by Pete Strom, a former U.S. attorney for South Carolina and a member of the state judicial screening committee, known as the Judicial Merit Selection Commission.

Asked whether Sandifer’s use of campaign funds for memberships complied with state ethics law, Harrell replied, “100 percent – even before he came to us, he was complying with the law,” citing formal House Ethics Committee advisory opinions.

“It goes to their office because the legislators have to and should join those organizations to better serve their districts,” he said.

Sandifer’s campaign reports list dues paid to the Seneca Koffee Club, Seneca Rotary Club, Greater Oconee Chamber of Commerce, Oconee County Republican Party, House Republican Caucus and American Legislative Exchange Council.

Making Their Own Rules

Under a 1992 House advisory opinion, House members could use campaign funds for membership dues to political groups, though dues paid to other organizations “whose primary purpose is community service oriented rather politically oriented cannot be considered ordinary expenses of office or closely related to a campaign.”

But under a 2002 House opinion, a House member can pay dues to “non-political” organizations with campaign funds if he is asked to join “only because of the member’s status as a Representative,” noting that the lawmaker’s decision is “ultimately subject to review by the House Ethics Committee.”

A 1993 Senate Ethics Committee advisory opinion issued when Leatherman was the committee chairman says a senator can pay dues to a “civic organization” if the lawmaker would “not otherwise be a member of the organization except for her office and receives no personal gain from being a member.”

It is highly unlikely, however, that the Senate and House Ethics committees are actively monitoring whether lawmakers under their jurisdiction have received personal benefits from campaigned-financed club memberships, given the absence of public sanctions in that area in recent years.

Contacted last week by The Nerve, John Crangle, attorney-director of the government watchdog organization Common Cause of South Carolina, questioned the legality of the use of campaign funds for some memberships.

“Once you allow the use of campaign money for expenses that are not strictly related to a campaign, you open the door for campaign abuses,” he said. “The sky’s the limit when you’re saying that you’re in office 24/7.”

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.