S.C. Policy Council Mulls Ethics Complaint against Harrell

January 22, 2013

Investigative Reports

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Bobby HarrellThe South Carolina Policy Council – The Nerve’s parent organization – is considering filing a formal ethics complaint against state House Speaker Bobby Harrell, council President Ashley Landess revealed during a hearing this morning before the S.C. Commission on Ethics Reform.

Speaking before 10 members of the 11-member panel appointed by Gov. Nikki Haley, Landess said if a formal complaint is made, it likely would be submitted to the House Ethics Committee, which has general jurisdiction over ethical complaints made against House members.

But Landess also said that in Harrell’s case, “conflicts exist to the greatest degree possible,” noting that if a complaint were filed against Harrell, he would “authorize any investigator hired to explore a complaint,” and that the Ethics Committee’s findings would be presented to him.

“We see no process for his recusal should he himself be the subject of a complaint,” she said.

Landess said her organization believes the governor-appointed panel is “taking seriously its charge to recommend substantive ethics reform,” pointing out the Policy Council’s eight proposed reforms announced last year. The proposed reforms include, for example, requiring lawmakers to publicly disclose all of their income sources.

“And we hope to make that larger goal one shared across the state,” Landess said. “But we are a long way from there today, and that’s why we’re all here.”

Documents obtained by the Policy Council and The Nerve, which were referred to by Landess during this morning’s hearingraise questions about Harrell’s:

  • Dealings with the state Board of Pharmacy on various matters involving his pharmaceutical business.Those matters had not been previously revealed publicly.
  • Reimbursement of campaign funds for certain expenses connected to the use of his private airplane. Harrell’s campaign reimbursements were first reported by The (Charleston) Post and Courier last year.
  • Appointment of his brother, John Harrell, to the state Judicial Merit Selection Commission, a 10-member panel that nominates judicial candidates for election by the S.C. General Assembly.

“We want assurances that there were no conflicts of interest and that the speaker did not use his position for personal gain,” Landess said during the hearing.

“We have valid concerns that our state’s most powerful politician has set himself above the law,” Landess concluded, “and we are alarmed that our system seems designed to protect him – and all politicians – with far too little regard for the public.”

Harrell, a Charleston Republican who has been the House speaker since 2005 and was elected to the House in 1992, has repeatedly denied publicly that he has done anything wrong in connection with his campaign reimbursements; and he has not been charged with any criminal or administrative violations.

Since The Nerve’s launch three years ago, neither Harrell nor his spokesman, Greg Foster, has responded to The Nerve’s requests for interviews regarding various stories, including the recent controversy involving Harrell’s campaign-fund reimbursements. The Nerve this morning could not immediately reach Harrell or Foster for response to the latest issues raised by Landess.

Business Owner, Not House Speaker?

According to documents obtained by the Policy Council and The Nerve, Harrell asked the state Board of Pharmacy, a division of the S.C. Department of Labor, Licensing and Regulation, in a handwritten note on his official speaker letterhead on May 2, 2006, for “urgent attention to this request” for a “new non-dispensing drug outlet permit.”

Harrell in an October 2010 letter identified himself as the president of a Charleston-based repackaging pharmaceutical company called Palmetto State Pharmaceuticals, which, according to records, also goes by the name of PrimaryRX. The permit sought by Harrell in 2006 would have allowed his company to “administer and store legend drugs,” according to the permit application.

The permit application lists Harrell and David Grimm, identified by a former Board of Pharmacy member in a 2006 email as Harrell’s nephew, as the owners or corporate officers of their business. Records show that Grimm identified himself as the company’s founding partner.

In a 2006 email, then-Board of Pharmacy member Bobby Bradham, who identified himself as a clinical assistant professor at the Medical University of South Carolina’s College of Pharmacy in Charleston, expressed concerns that participating in a conference call with Harrell was not part of the routine permitting process.

“By conversing with Bobby Harrell, we were already making this ‘different’ since he was adamant in his conversation that he wanted this enterprise to be treated the same as any other operation and not any exceptions be made because of ‘who’ he was!” Bradham wrote on May 25, 2006, to Lee Ann Bundrick, who, according to the board’s website, is the board’s administrator.

In a May 23, 2006, email, Bradham said the conference call was scheduled after a State House assistant for Harrell became “very upset” when informed by the Board of Pharmacy’s inspector that Harrell’s company needed a repackaging permit from the U.S. Food and Drug Administration. Bradham indicated in another email several days later to Bundrick that Harrell had received “letters of clearance from (the) FDA and also from the legal staff of the Board of Medicine and our legal counsel at (the) Board of Pharmacy for them to proceed.”

In an Oct. 20, 2010, letter which, according to an email, was sent to hospitals, Harrell pushed to expand his business to hospital emergency rooms, contending that his company offers a “comprehensive point of care pharmaceutical dispensing program which makes it practical, affordable, and profitable for clinics and private practices.”

“Having worked with hundreds of physicians and practices across the country in a variety of clinical settings, it was a natural progression for us to expand our dispensing program to work within a Hospital’s Emergency Room,” Harrell wrote.

He also 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.”

Section 8-13-700 of the S.C. Code of Laws 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.”

More recently, in a Feb. 24 email to Octavia Williams-Blake, who is the director of employee and occupational health at McLeod Regional Medical Center in Florence, according to the center’s website, Grimm said Harrell in 2007 met with Sharon Dantzler, identified as the state licensing department’s chief deputy general counsel; and after “multiple conversations,” Dantzler “provided a response to our company in a letter clarifying LLR’s position.”

As Speaker of the House, Harrell has the authority to make most committee assignments, including appointing members to the House Ways and Means Committee, which writes the first legislative draft of the annual budget for state agencies, including LLR.

Have Plane, Will Travel

The controversy over Harrell’s use of his private plane started when The Post and Courier reported on Sept. 24 that Harrell had offered no details to the Charleston newspaper regarding more than $325,000 that he had reimbursed himself from his campaign account since 2008. Citing an email response from Harrell, the newspaper reported that many of the reimbursements he made to himself covered the cost of flying his private plane to political or legislative events.

The same story also noted that Herb Hayden, the State Ethics Commission executive director, declined to answer further questions from a Post and Courier reporter after the commission received a call from the speaker’s office “regarding its involvement with the story.” As with LLR, the House Ways and Means Committee makes annual funding recommendations for the Ethics Commission.

On Sept. 26, the Associated Press reported that Harrell returned about $23,000 to his campaign account after informing the Ethics Commission in a letter that he didn’t have records supporting that expense amount. Harrell at the time said he believed all of those expenses were legitimate and later said those records were lost in an office move.

State law (Section 8-13-1302) requires that candidates for public office “maintain and preserve all receipted bills and amounts” required under the law for four years.

In an Oct. 17 story, The Post and Courier reported that according to newly released figures by Harrell’s office, Harrell reimbursed himself nearly $105,000 during the period for insurance costs, property taxes, depreciation and loan-interest expenses related to the use of his single-engine Cirrus SR22.

State law (Section 8-13-1348) allows campaign funds to be used to cover “reasonable and necessary travel expenses,” and that those funds cannot be “converted to personal use.” Another law (Section 8-13-1360) requires candidates to itemize campaign-fund reimbursements “so that the purpose and recipient of the expenditure are identified.”

The Nerve on Oct. 26 reported that in 2008, Harrell took at least nine weekly round trips with his private plane between Charleston and Columbia when the Legislature was in session and also received car-mileage reimbursements for, according to The Nerve’s calculations, 21 weekly round trips.

House Journal records show that the chamber was in session 23 weeks that year – seven fewer weeks than the combined total of Harrell’s weekly car and plane trips for the period, leaving questions about his flying and driving patterns during that session.

Harrell or his spokesman, Foster, did not respond in October to requests by The Nerve for comment on the discrepancies.

Brotherly Love

As for Harrell appointing his brother, a Charleston attorney, to the state Judicial Merit Selection Commission, the House speaker by law appoints five members of the 10-member panel, with the remaining appointments split between the Senate president pro tempore and the Senate Judiciary Committee chairman.

Neither the relatively new Senate president pro tempore, John Courson, R-Richland, nor Judiciary Committee Chairman Larry Martin, R-Pickens, have appointed any relatives to the commission, though Martin appointed himself as a member.

State law (Section 8-13-750) says that no “public official, public member, or public employee may cause the employment, appointment, promotion, transfer, or advancement of a family member to a state or local office or position in which the public official, public member or public employee supervises or manages.”

The same law bans public officials from participating in “an action relating to the discipline” of their relatives. A separate law (Section 2-19-10) says non-legislative members of the Judicial Merit Selection Commission members are “subject to a right of removal at any time by the person appointing him.”

By law, six of the 10 members must be lawmakers; Harrell’s brother is one of the four non-legislators.

“Anyone challenging this speaker could well end up in front of a judge who is on the bench because the speaker’s brother sits on the panel that chose him or her,” Landess said during this morning’s hearing, adding, “Judicial independence is necessary, not just to check corruption, but to control tyranny and preserve democracy.”

Under state law, lawmakers can elect only those judicial candidates nominated by the screening commission. The Nerve reported in September that South Carolina is one of only two states (Tennessee being the other) in which legislative leaders control the makeup of the panel that nominates judicial candidates.

The Policy Council in its eight-point reform agenda released in May recommended that the governor appoint judges with advice and consent of the state Senate. South Carolina and Virginia are the only states in which their legislatures play primary roles in electing judges.

Conflicts of Interest?

During this morning’s hearing, Landess said the makeup of 10-member House Ethics Committee violates state law. The Nerve reported last week that state law (Section 8-13-510) limits the size of the committee to six members, though the House at an organizational session last month increased it to 10 through a rule change.

The Ethics Committee cannot by law investigate any criminal matters involving House members, though the state grand jury, a division of the S.C. Attorney General’s Office, has jurisdiction in public-corruption cases, defined by law as “any unlawful activity, under color of or in connection with any public office or employment,” as The Nerve reported in October.

The Nerve last week  raised the question of whether there are conflicts of interest on the Ethics Committee, reporting that all five Republican members collectively received $13,000 in donations since the 2008 election cycle from a political-action committee affiliated with Harrell, known as the Palmetto Leadership Council.

The Commission on Ethics Reform did not take any action this morning on Landess’ recommendations. The commission has a Monday deadline to issue its report.

How far the commission will go in recommending statewide change remains to be seen.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.