Light Punishments for Raiding Campaign Accounts

September 15, 2014

Investigative Reports

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Stealing MoneyIn South Carolina, if you steal more than $2,000 from where you work or shop, or from other places, you could face a felony charge and up to 10 years in state prison if the stolen amount was at least $10,000.

But if you’re a politician and spend campaign donations on personal stuff – in effect, stealing from your campaign account – the most serious penalty you’ll likely face on any single charge under the state Ethics Act is a misdemeanor punishable by up to one year in prison and a $5,000 fine – no matter who how much you misspent.

“Those guys have just kind of written themselves out of the criminal code,” said Kenneth Gaines, who teaches criminal law at the University of South Carolina’s School of Law, when contacted Friday by The Nerve.

Suspended S.C. House Speaker Bobby Harrell, R-Charleston, for example, is accused in indictments issued last week by a Richland County grand jury of reimbursing himself $93,958 out of his campaign account to cover expenses for his privately owned airplane, plus paying himself another $70,286 in campaign funds for an administrative assistant at his insurance agency.

Harrell, a licensed pilot, also is accused in indictments of reimbursing himself $3,874 from his campaign account for use of his private plane to fly his family and friends to a high school baseball tournament in Florida, plus paying himself unspecified amounts for four “non-existent” legislative trips on his private plane between Charleston and Columbia.

He also allegedly used campaign funds to pay credit card debt and for “goods and services for his home, family and friends” that were “not for any purposes related” to his campaign or legislative office, according to one of the indictments.

Harrell, the House speaker since 2005 and who was first elected to the House in 1992, has denied publicly breaking any state laws.

State law (Section 8-13-1348 of the S.C. Code of Laws) bans using campaign funds for personal expenses. Six of the nine indictments against Harrell accuse him of that crime.

But that offense is listed under the state Ethics Act, which limits the maximum penalty on the misdemeanor charge to one year in prison and $5,000 fine per count (Section 8-13-1520).

In contrast, if a person were accused of stealing what Harrell allegedly misspent from his campaign account – at least $168,119, according to the indictments – he could face felony counts and maximum 10-year prison sentences per charge under various sections of the state criminal code (Title 16, Chapter 13) dealing with shoplifting, grand larceny, embezzlement of public funds, breach of trust with fraudulent intent, or obtaining money by false pretenses – depending upon the circumstances of the theft.

In 2012, then-Lt. Gov. Ken Ard was indicted by the state grand jury on seven misdemeanor counts under the state Ethics Act, several of which were the same charges the Harrell now faces – false reporting and using campaign funds for personal expenses. Among other things, Ard was charged with misspending more than $7,000 from his campaign account on various personal items, including a flat-screen TV, clothes and a family trip to Washington, D.C.

Ard pleaded guilty to all seven counts and resigned from office the same day. He walked out of a Richland County courtroom a free man after being sentenced to five years’ probation, a $5,000 fine and 300 hours of community service.

Unlike Ard, however, Harrell faces a common law charge of misconduct in office, which carries a maximum 10-year prison sentence. But that charge is not classified as a felony.

Under the S.C. Constitution (Article 3, Section 7), no person convicted of a felony under state or federal law can serve in the 170-member General Assembly, unless he has been pardoned for his crime or filed for office at least 15 years after serving his sentence, including probation or parole time.

The Nerve last year first reported that under a secretly crafted “ethics-reform” House bill (H. 3945), state lawmakers and other public officials would no longer face possible criminal penalties for many violations under the state Ethics Act, which took effect in 1992 after the federal Operation Lost Trust bribery scandal broke.

The no-crime provision was quickly dropped from the bill after public outcry, but that didn’t stop the House this year from again trying to change state law to apparently protect lawmakers, including Harrell, who then was under investigation by the state grand jury, as The Nerve reported. The General Assembly adjourned this year without passing any major ethics reforms.

Contacted Saturday by The Nerve, Miller Shealy, a former state and federal prosecutor who teaches criminal law at the Charleston School of Law, said generally in the U.S., misspending campaign funds is not viewed under state laws “like outright larceny where you have no title to it (the stolen money).”

But unlike state law in South Carolina, federal law clearly defines a felony, Shealy said, noting, “If you can go to jail for more than a year, it’s a felony.” He also said unlike South Carolina law, federal sentencing guidelines tie prison sentences for theft more closely to the stolen amounts; as an example, someone convicted under federal law of stealing $1 million would potentially face a much stiffer sentence compared to a defendant convicted of stealing $10,000.

In comparison, under the S.C. criminal code, whether a defendant faces a maximum five-year or 10-year prison sentence for felony shoplifting, grand larceny, embezzlement of public funds, breach of trust with fraudulent intent, or obtaining money by false pretenses generally depends on whether the stolen amount ranged from more than $2,000 but less than $10,000, or whether it was at least $10,000.

Gaines, of the USC School of Law, questioned why 1st Circuit Solicitor David Pascoe of Orangeburg, who presented Harrell’s case to the Richland County grand jury, apparently didn’t consider initially seeking more serious state charges against Harrell.

“The solicitor had options,” Gaines said. “He could have raised the stakes a heck of a lot more than he did. He took misdemeanors to the grand jury instead of felonies.”

Gaines said the state Ethics Act is weak, adding that lawmakers deliberately crafted it that way to protect themselves.

“You know who writes that stuff,” Gaines said about the law. “You’ve got that fox guarding the chicken house.”

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