S.C. legislators know how to protect their own wallets

March 9, 2018

Investigative Reports

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By RICK BRUNDRETT

In the S.C. General Assembly, lawmakers can’t seem to resist pushing legislation that could benefit their businesses’ bottom lines.

The practice has been perfectly legal for more than a quarter century – and they wrote the ethics laws.

Consider this: On the same day last week, at least three House bills were filed that pose potential conflicts of interest for some of the bills’ co-sponsors.

One of the bills, co-sponsored by a House member who is a pharmacist and pharmacy owner, would generally require pharmacy benefit managers, which contract with pharmacies to provide certain services on behalf of health insurers, to reimburse pharmacies “within seven business days of payment by a payor.”

The other bill, co-sponsored by 20 lawyer-legislators, would generally prohibit mortgages or deeds from being officially recorded by a clerk of court or register of deeds unless the documents list contact information of the “preparer of the instrument” or “an attorney licensed to practice in South Carolina assisting with the closing of the instrument.”

State ethics law bans public officials from using their positions 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.”

But the law that legislators passed in 1991 also contains a huge loophole: Under a section commonly referred to as the “large-class exception,” lawmakers can sponsor bills that benefit their businesses if the legislation also would help other similar businesses equally.

For Rep. Kit Spires, R-Lexington and pharmacy owner who co-sponsored the bill regulating pharmacy benefit managers, introducing pharmacy-related legislation has been a habit since his first year as a House member in 2007. The Nerve revealed in 2013 that of 22 general bills sponsored by Spires, nearly a third were pharmacy-related, though he denied any conflict of interest.

“These are not personal bills of mine. … It benefits all pharmacists and not just me,” Spires said then about his pharmacy-related bills, adding, “I respond to the needs of people in my district and other pharmacists in the area.”

Besides Spires, Reps. Mac Toole, R-Lexington, and Steven Long, R-Spartanburg, who are not pharmacists, also are sponsors of the House bill filed last week dealing with pharmacy benefit managers.

In addition, Spires and Toole are among 34 co-sponsors of a similar House bill introduced on the same day, which, among other things, would prevent a pharmacist or pharmacy from being “penalized” by a pharmacy benefit manager for “selling an available alternative drug.”

The bill dealing with listing contact information of closing attorneys on mortgages or deeds is co-sponsored by 30 House members, including 20 Republican or Democratic lawyer-legislators.

Lawyer-lawmakers or their law firms have made a lot of money representing state or local government agencies. The Nerve in 2012 reported that about 30 attorney-legislators or law firms they worked for collectively received more than $5.3 million in legal fees from state and local government agencies the year before.

And they exert their influence in other ways. The Nerve reported last month that lawyer-lawmakers, who make up 30 percent of the 170-member Legislature, play a large role in the election of state judges.

Brundrett is the news editor of The Nerve. Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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