Legal Loophole Could Benefit Harrell in Ethics Case

April 28, 2014

Investigative Reports

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Get Out Of Jail Free TicketIt’s no secret S.C. lawmakers have written – and continue to craft – loopholes in state law that allow them to skate on ethics charges.

The Nerve last week was made aware of another such loophole that could help S.C. House Speaker Bobby Harrell should Circuit Judge Casey Manning decide to transfer his case from the state grand jury, which decides whether to issue indictments in criminal public corruption cases, to the House Ethics Committee, which can impose only civil sanctions for ethics violations by House members and candidates.

That longstanding loophole, found in Section 8-13-540 (1) (b) of the S.C. Code of Laws, reads, “No complaint shall be accepted (by the House or Senate Ethics committees) which is filed later than four years after the alleged violation occurred.”

What that means is those committees can’t consider ethics violations more than four years old.

On top of that, the committees can’t accept complaints against candidates within 50 days of an election (Section 8-13-530 (4) of the S.C. Code of Laws), which would further delay any action by the House Ethics Committee should Harrell’s case be transferred to it.

In contrast, S.C. criminal laws generally have no statute of limitations.

The South Carolina Policy Council – the parent organization of The Nerve – in February 2013 filed a public-corruption complaint against Harrell with S.C. Attorney General Alan Wilson, who referred it to the State Law Enforcement Division. After a 10-month investigation, SLED submitted its report to Wilson, who announced in January that the case had been referred to the state grand jury for further investigation.

Harrell, R-Charleston, who has elected to the House in 1992 and became the House speaker in 2005, has repeatedly denied he has done anything wrong, and he has not been charged with any crimes.

In a Feb. 14, 2013, letter to Wilson that accompanied the complaint, Ashley Landess, the Policy Council president, wrote that the “apparent ethics violations, if proven, could be plausibly seen as a pattern of public corruption that would be out of the jurisdiction of the House Ethics Committee to investigate.”

Although the House and Senate Ethics committees have the legal authority to investigate lawmakers for ethics violations, any alleged criminal violations of state ethics laws must be referred to the state attorney general (Section 8-13-540 (3) (d) of the S.C. Code of Laws).

But if Manning rules that the House Ethics Committee has “exclusive” jurisdiction over his case, as Harrell’s attorneys reportedly have requested, and thus can consider only civil sanctions, the committee would be barred from even considering many of the allegations in the Policy Council’s complaint under the four-year statute of limitations, including:

  • At least two years – 2008 and 2009 – and likely most of 2010 in which Harrell spent tens of thousands of dollars in campaign funds to cover or reimburse himself for the costs of legislative and political trips. A review by The Nerve of Harrell’s campaign-expenditure forms filed with the State Ethics Commission found that more than $175,000 of the total $234,171 that Harrell spent or reimbursed himself for trips from 2008 through 2012 likely would be excluded for review by the House Ethics Committee under the statute of limitations. State law allows campaign funds to be used for “reasonable and necessary travel expenses,” and that those funds can’t be used to “defray personal expenses which are unrelated to the campaign or the office if the candidate is an officeholder.” The (Charleston) Post and Courier in 2012 reported, citing information provided by Harrell, that much of Harrell’s campaign-account reimbursements were for the use of his private plane for legislative and political trips, and that campaign funds were used for to cover property taxes, loan interest payments, insurance and depreciation on his plane. The Nerve in January reported that Harrell’s campaign forms listed no travel reimbursements to himself in 2013.
  • Harrell’s alleged failure to maintain records documenting his campaign expenditures, as required by state law. Under the statute of limitations, the House Ethics Committee would be barred from considering that matter for 2008 and 2009 and likely most of 2010. After initial media reports in 2012 about his private-plane use, Harrell said he reimbursed about $23,000 to his campaign account, saying he had lost records documenting those expenses in an office move in 2011, according to an Associated Press story.
  • An Oct. 20, 2010, letter from Harrell, then president of a Charleston-based repackaging pharmaceutical company called Palmetto State Pharmaceuticals, to hospitals statewide asking them to allow him to expand his business to hospital emergency rooms. He pointed out in the first sentence of his letter that he was “writing you today not in the capacity as Speaker of the House of South Carolina, but as a business owner,” as The Nerve reported in January 2013. State law bans public officials from using their office to “obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.” The Nervein January of this year reported, citing Secretary of State records, that Palmetto State Pharmaceuticals was dissolved on Dec. 3.

The Nerve on April 4 confirmed, citing comments by Charleston attorney Gedney Howe, one of Harrell’s lawyers, that Manning is considering transferring Harrell’s case from the state grand jury to the House Ethics Committee. In a story last week in The Post and Courier, Howe said all ethics cases involving House members must go before the House Ethics Committee.

“The ethics committee has the exclusive jurisdiction,” he said. “That’s the only entity with jurisdiction.”

‘Public Corruption a Crime’

Contacted last week by The Nerve, John Crangle, director of the government watchdog organization Common Cause of South Carolina, said the “implications of the Gedney Howe motion are basically unfathomable at this time.”

As for the four-year statute of limitations that would be in effect if Harrell’s case is transferred to the House Ethics Committee, Crangle replied, “If this thing drags out until next year, all the alleged violations in 2010 would be absolutely banned as well.”

Landess said Friday it’s important for the public to understand what could happen if Manning sides with Harrell’s position that his case is non-criminal and belongs solely with the House Ethics Committee.

“Public corruption is a crime that is separate and apart from the ethics committee,” Landess said. “If the attorney general is not allowed to investigate all public corruption, then that has ramifications for every politician.”

To illustrate the problem of limiting the investigation and punishment of ethics violations by state lawmakers to the General Assembly’s ethics committees, Landess said, “If a House member purchased illegal drugs or illegal services with his or her campaign account, might not we have the same technicality?”

Under state law and chamber rules, the House and Senate Ethics committees can issue reprimands to lawmakers, authorize a civil fine of up to $2,000 for each “non-technical” violation of the ethics law, require the forfeiture of gifts, or recommend expulsion of the offending lawmakers by their respective chambers.

Landess has publicly said on more than one occasion, as well as stated in writing last year to Wilson, that the Policy Council complaint against Harrell was not filed with the House Ethics Committee because of multiple inherent conflicts of interest. One of the main problems, she said, is that because the House speaker has ultimate authority over all House employees, the House Ethics Committee staff could not be objective in investigating allegations against Harrell.

How and when Manning will rule in Harrell’s case is anybody’s guess. More than a month has passed since Harrell’s initial hearing before Manning on March 21, but no ruling has been issued, and no related court documents have been released publicly, despite The Nerve’s repeated written requests.

Howe earlier said a hearing will be held before Manning on Wednesday at 10 a.m. in the Richland County Courthouse in Columbia. But no official announcement has been made through the state grand jury clerk’s office, and Wilson spokesman Mark Powell on Friday told The Nerve that his office has received no notification of any hearing.

S.C. Ethics: Then and Now

The Nerve last week contacted three current or former lawmakers who played roles in the initial passage of the current state ethics law, titled “The Ethics, Government Accountability, and Campaign Reform Act of 1991.” The Nerve asked each of them whether lawmakers intended for alleged ethics violations by legislators to be handled solely by the respective chamber ethics committees.

“If I recall correctly, it was our intent that further investigation of a crime would be referred to the proper authority,” said Sam Stilwell, a retired state Court of Appeals judge who earlier was a Republican Senate member of the legislative conference committee that drafted the final version of the 1991 ethics law. “The Legislature has no law enforcement authority … It can’t go into court and prosecute a criminal act.”

Stilwell said ethical violations by lawmakers that don’t rise to the level of a crime are supposed to be handled by the ethics committees under state law, adding, “The truth is that there are a lot of ethical violations that are nowhere near a crime.”

Sen. Wes Hayes, R-York, who was a House member on the 1991 conference committee, told The Nervethat whether ethics violations by lawmakers are handled by the ethics committees or the state Attorney General’s Office is “not an either-or situation – you can do both.”

Although the ethics committees can issue certain sanctions against lawmakers who violate the state ethics law, “they don’t have any ability to sentence someone to jail or hit them with a criminal penalty,” said Hayes, an attorney who formerly was the longtime chairman of the Senate Ethics Committee.

Senate President Pro Tempore John Courson, R-Richland, who served on a Senate select committee on ethics reform in 1991, said Friday he couldn’t remember whether there was discussion then about when ethics violations by lawmakers should be referred to law enforcement authorities. But he said current law allows the state attorney general to investigate alleged criminal ethics violations by legislators, noting the referral last year by the Senate Ethics Committee of then-Sen Robert Ford’s case to Wilson’s office.

“We referred his (Ford’s) information to the attorney general because we felt it warranted it,” said Courson, a longtime ethics committee member.

No criminal charges have been filed against the Charleston Democrat, who resigned his legislative seat in May amid an ethics committee hearing into allegations that he used campaign funds for personal expenses, including such things as car payments, gym memberships, adult superstore gifts and a male- enhancement drug.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.