S.C. Supreme Court Justice Releases Financial Records

January 29, 2014

Investigative Reports

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SC Supreme CourtUPDATE: 1/31/14 – Chief Justice Jean Toal this afternoon released a written summary to The Nerve of the amount and sources of income in 2012 for her and her attorney-husband, William Toal, as well as a breakdown of their income-producing assets.

Toal listed 2012 income, which she noted was reported on their tax return filed on Feb. 27, 2013, at $299,613, of which $91,881 was taxable wages. As chief justice, Toal’s annual base salary is $148,350; in her summary she said the rest of her 2012 judicial salary was placed in a deferred-compensation 401K plan. Toal told The Nerve that her husband, a partner in the Columbia-based law firm of Johnson, Toal & Battiste, is retired and did not receive partnership income in 2012.

Toal also reported total pension income that year of $141,664, about $131,000 of which she said was her retirement benefits. The couple also had collective taxable Social Security benefits in 2012 of $49,672.

Toal said neither she nor her husband owns any publicly traded stocks. She said her husband has a 401K and Merrill Lynch account with a total value of about $548,000, and she has a 401K and 457 retirement plan with a total value of approximately $200,000.

Toal also said she is one of five beneficiaries of her mother’s estate and father’s trusts – the primary assets listed as real estate and the family sand-mining business.

“None of these assets have been distributed to me or my four siblings,” she said. “We receive no income from these entities. All income is being used to pay the loan taken by the estate and trusts to pay estate taxes.”

The Nerve earlier this month asked Toal and Justice Costa Pleicones, who is running against Toal for her chief justice seat in Wednesday’s election in the General Assembly, to voluntarily release financial documents they submitted to the state Judicial Merit Selection Commission, which nominates judicial candidates for election. By law, the 10-member commission, which includes six lawmakers, cannot release those forms publicly if the records are not “presented under oath” during public screening hearings.

Pleicones provided The Nerve with a copy of one of two forms required by the commission and released a separate breakdown of his stocks, mutual funds and government securities.Toal did not provide copies of either form to The Nerve, though she provided a written summary of information contained in those forms.

To view the summary provided by Toal, click here.

In 2012, S.C. Supreme Court Justice Costa Pleicones received more than $125,000 in state retirement income in addition to his approximately $140,000 judicial salary for that year, according to financial records he voluntarily released over the weekend to The Nerve.

He said he also received $29,209 in Social Security payments, federal military pension benefits of about $28,000 and approximately $20,000 in joint investment income in 2012.

In addition, Pleicones provided The Nerve with a a detailed breakdown of his stocks, mutual funds and government securities, which as of July 31 had a total listed value of more than $894,000. On top of that, he released records for a separate bond fund that listed a cash balance of nearly $74,000, plus said he contributes to separate 401K and 457 retirement plans.

It’s the first time in recent memory that a sitting S.C. judge has publicly released detailed financial records. The Nerve last week revealed that what judges are required to disclose is largely hidden from the public.

Not knowing the private sources of income and investments for judges and their spouses prevents the public from monitoring potential conflicts of interest. In April of last year, The Nerve’s parent organization – The South Carolina Policy Council – launched “Project Conflict Watch” to encourage state lawmakers and other elected officials to voluntarily disclose their private sources of income.

The Nerve this month asked Chief Justice Jean Toal and Pleicones, who is running against Toal for her seat in next Wednesday’s judicial election in the General Assembly, to voluntarily release normally confidential financial information they provided to the state’s Judicial Merit Selection Commission (JMSC), which nominates judicial candidates for election.

South Carolina and Virginia are the only states in which their legislatures play primary roles in electing judges.

“I’m 100 percent for disclosing any income any judge has and any investment any judge has,” Pleicones, who has been on the Supreme Court since 2000, said when interviewed by The Nerve.

The Nerve initially asked Pleicones to release only the sources of his private income and investments, not amounts, but he said he was willing to release amounts as well, adding, “I think everyone has a right to know.”

Contacted Tuesday, Toal said she didn’t have “any problem” with requiring state judges, including herself, to publicly disclose their private sources of income and assets. But she said she couldn’t immediately release financial records she provided to the JMSC, explaining that given the pending winter storm threatening to shut down the state’s court system, she didn’t have time to contact her accountant to review her family’s financial records, which she noted include various assets belonging to her and her attorney-husband, William Toal.

“Income disclosure is very different from asset disclosure,” said Toal, a member of the Supreme Court since 1988 and chief justice since 2000. “I would have no difficulty with that (releasing information on her assets), but doing it right now is something I can’t waive my magic wand and get it done.”

The Nerve initially left voicemail messages for Pleicones and Toal on Jan. 17 at their Supreme Court offices. Pleicones agreed the same day to The Nerve’s request to voluntarily release records he provided to the JMSC, though he said given his work and campaign schedule for the judicial race, he couldn’t do it immediately.

The Nerve on Jan. 21 left a phone message with Toal’s assistant, informing her that Pleicones had agreed to The Nerve’s request and asking her to let Toal know about The Nerve’s request. Toal returned the call when a Nerve reporter was unavailable, but she could not be reached for comment by publication of The Nerve’s initial story on Jan. 22.

On Saturday, Pleicones released financial records to The Nerve that he said he provided to the JMSC. The Nerve on Monday left another message with Toal’s assistant, informing her that Pleicones had released his records. The Nerve contacted Toal at her office on Tuesday morning after not hearing from her.

Multiple Forms, Little Transparency

Under court rules, judges annually have to file financial disclosure statements with the state Office of Court Administration, which assists the chief justice in the administration of the state court system. Those forms require judges to list, among other things, “extra-judicial income,” but there are no similar requirements for their spouses, and the forms are available to the public only upon request.

The Nerve’s review found that on the most recently filed forms by the five Supreme Court justices, the only itemized information they provided were gifts of more than $150 for law-related trips paid by various legal groups.

When sitting judges and challengers run for judicial seats filled by the General Assembly, they are required under state law to file financial-disclosure statements with the state House and Senate Ethics committees. But like similar statements filed by lawmakers and other elected officials with the State Ethics Commission, those forms don’t require judicial candidates to report private-income sources for themselves or their spouses.

And like the forms filed with the Office of Court Administration, reports filed with the House and Senate Ethics committees are available only upon request.

The 10-member Judicial Merit Selection Commission, which includes six legislators, requires more detailed financial information from judicial candidates, such as judges’ investments, liabilities and businesses that have received state contracts. But those records are provided only during judicial elections, not annually; and by law, the commission can’t release those forms publicly if the documents are not “presented under oath” during public screening hearings.

The documents filed with the JMSC include an 11-section form and a separate net-worth statement of assets and liabilities. Pleicones provided The Nerve with his 11-section form but not the net-worth statement, though he released a separate, detailed list of his stocks, mutual funds and government securities.

His stock ownership, which he noted was “inherited directly,” includes shares in Bank of America, BB&T and General Electric. He reported to the JMSC that his wife, Donna Pleicones, owns less than a 5 percent interest in a Columbia management company, J.E. Eubanks and Associates, which provides services to, among other clients, the South Carolina Defense Trial Attorneys’ Association. The legal group retains a lobbyist, Jeff Thordahl, though Pleicones said his wife has no business relationship with him.

As for his $125,306 in state retirement income in 2012, which was in addition to $141,939 in judicial salary and taxable office expenses he received that year, Pleicones, whose current base salary is listed at $141,286, said once he “hit 32 years” in the retirement system, he could “retire in place,” noting, “It’s kind of like a TERI (Teacher and Employee Retention Incentive program) for judges.” He added that Toal draws a similar judicial pension.

He didn’t report the amounts of his state and military pensions, or his Social Security income, on his most recently filed financial-disclosure form with the Office of Court Administration, though he noted, “While this is income, I do not believe it constitutes compensation, and I report it from an abundance of caution.”

The Nerve reported last February that the retirement system for judges, which doles out the largest average payouts among the state’s five retirement systems, took in $4 million in federal stimulus funds several years earlier.

Although Toal, whose current base salary is listed in a state salary database at $148,350, has not released her JMSC documents to The Nerve, she said she doesn’t have “nearly the stock portfolio” compared to Pleicones’ investments.

The Nerve reported last week that on her separate statement of economic interests filed with the House and Senate Ethics committees, Toal reported that she is the beneficiary of her mother’s estate and father’s trust along with her siblings, noting the estate and trust collectively own 4 percent to 5 percent of two family businesses – Columbia Silica Sand Inc. and Columbia Aggregates LLC, though she reported to the Office of Court Administration that she received no income from Columbia Silica Sand in 2012.

“None of my siblings invests in any public entities at all,” Toal told The Nerve.

Support for Change

Compared to South Carolina’s judicial financial-disclosure requirements, similar forms for federal judges are “not specific” when it comes to stocks, Toal said. But a review by The Nerve found otherwise; for example, U.S. Supreme Court Chief Justice John Roberts’ disclosure report for 2012, made available by OpenSecrets.org., contains seven pages of detailed investment information.

The forms for federal judges also require, among other things, that judges annually report private sources of income and amounts for themselves, and any private-income sources for their spouses.

Karen Redmond, spokeswoman for the Administrative Office of the United States Courts, told The Nervethat the annual financial-disclosure forms for the nation’s approximately 2,275 federal judges are due May 15.

“Many of the judges have accountants, if they have substantial holdings, to put it together,” Redmond said.

Contacted this week by The Nerve, Columbia attorney Pete Strom, a member of the state Judicial Merit Selection Commission and a former U.S. attorney for South Carolina, said the commission closely examines the financial stability of candidates to make sure they are not “susceptible to a bribe.”

Asked whether those financial records should be made publicly available, Strom, whose wife, Donna Strom, is a family court judge on retired part-time status, replied, “As a citizen and a member of the (South Carolina) Bar, I certainly would support and not oppose the disclosure of private sources of income.”

Sen. Larry Martin, R-Pickens, the commission’s vice-chairman, told The Nerve when contacted this week that he would support a bill – either stand-alone legislation or possibly amending a pending ethics bill (H. 3945) – that would require judges to publicly disclose their private-income sources. The latest version of H. 3945, which passed the House last year but is still being debated in the Senate, would require lawmakers and other elected officials to publicly disclose private-income sources for themselves and their immediate families.

“I wouldn’t have a problem with the same information that applies to us,” Martin said.

For Justice Costa Pleicones’ financial records (The Nerve blacked out his home address and phone number for security reasons), click here.

For Chief Justice Jean Toal’s financial records (The Nerve blacked out her home address and phone number for security reasons), click here.

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