Weaknesses in Ethics Law Revealed in Harrell Case

September 16, 2015

Investigative Reports

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Bobby HarrellIn a Sept. 1 letter to ex-S.C. House Speaker Bobby Harrell, House Ethics Committee Chairman Kenny Bingham informed the arguably once-most-powerful lawmaker that paying attorney fees with campaign funds last year during his ethics investigation was a legal no-no.

Citing a 2013 Ethics Committee advisory opinion, Bingham, R-Lexington, said the committee, which met earlier that day, “found these expenditures were not a permissible use of campaign funds.”

“The Committee voted to send you a letter requesting reimbursement of the three attorney fees, $113,475, to the General Fund within 30 days of the date of this letter,” Bingham wrote. “Please provide staff with documentation regarding this reimbursement in compliance with the Committee’s action.”

As of Tuesday, Harrell, a Charleston Republican who resigned from office in October after pleading guilty to six misdemeanor ethics charges, hadn’t paid any of the $113,475 or contacted the committee about payment, Bingham told The Nerve, though he pointed out that two weeks remain until the deadline imposed by the committee.

Asked what the committee would do if Harrell ignored the panel’s ruling, Bingham said only, “I’m not going to comment on what we’re going to do.”

Generally, there are “many options that are available to the committee” to compel payment of fines imposed by the panel, including court action, Bingham said. When asked, though, if the committee has ever sued a House member or candidate in those cases, he replied, “We haven’t had a situation where a person has had a large fine and we’ve gone that route.”

Harrell or his Charleston attorney, Bart Daniel, didn’t respond Tuesday to phone messages from The Nerve seeking comment. Harrell paid Daniel a total of $70,475 from his campaign account in April and July 2014, and another $43,000 in campaign funds in April 2014 to Charleston attorney Gedney Howe, according to Bingham’s Sept. 1 letter, which noted, citing an email from Daniel, that the attorneys advised Harrell the “attendant legal fees could be paid from those funds.”

In a prepared statement issued after the committee’s Sept. 1 meeting, Harrell, who first elected to the House in 1992 and became House speaker in 2005, said the meeting was held “without any notice to me … and without affording me the opportunity to be heard by the committee,” adding, “This was a clear violation of my due process rights.”

State ethics law (Section 8-13-1348(A) of the S.C. Code of Laws) bans public officials from using campaign funds to “defray personal expenses which are unrelated to the campaign or the office if the candidate is an officeholder nor may these funds be converted to personal use.”

But the ethics law doesn’t specifically address the use of campaign funds for legal expenses, leaving it up to the interpretation of the House and Senate Ethics committees, which police their respective members for ethics violations, and the State Ethics Commission, which has jurisdiction over other elected state and local officials.

And there’s not exactly uniformity among the three panels. Consider this:

*Bingham told The Nerve that Harrell, who was given three years’ probation after pleading guilty to misspending campaign funds related to the use of his private airplane, would have been allowed to use those funds to pay his attorneys during last year’s ethics investigation had he later been acquitted of the criminal charges, or if the charges were dropped. Harrell’s plea and resignation stemmed from a 2013 public-corruption complaint filed by the South Carolina Policy Council – The Nerve’s parent organization – with S.C. Attorney General Alan Wilson.

“This one was before a criminal court alleging he took money out of that nonprofit (campaign committee account) for his personal use or gain,” Bingham said. “It is illogical to argue that you took money from that entity to pay your legal costs (related to the criminal case).”

But the 2013 House Ethics Committee opinion cited by Bingham in his Sept. 1 letter to Harrell didn’t address the use of campaign funds to pay legal expenses in criminal cases. Instead, it dealt with the use of those funds for lawsuits that “likely directly stem from one’s election, one’s campaign.”

(In a related matter, The Nerve in June revealed that Harrell paid $3,517 from his campaign account toward nearly $94,000 in court-ordered restitution. First Circuit Solicitor David Pascoe, the special prosecutor assigned to Harrell’s criminal case, later told The Nerve that Harrell’s plea deal didn’t allow him to do that, though he added there was no evidence Harrell intentionally violated the agreement.)

*In a written statement Tuesday to The Nerve, Lyn Odom, the Senate Ethics Committee’s research director and an attorney, said there is “no Senate Ethics Committee Advisory Opinion that addresses legal fees,” adding, “Rather, such expenditures would be reviewed by the Committee on an individual basis to determine whether they are an appropriate campaign or office-related expense.”

The Nerve reported last year that since 1992, when the current state Ethics Act took effect, there were 13 years in which the Senate Ethics Committee issued no opinions, and that none had been issued by the committee since 2007. The Senate and House Ethics committees have issued written advisory opinions to their respective chambers to guide them when questions arise about state ethics law.

*Asked Tuesday about then-Gov. Mark Sanford’s use of campaign funds for legal expenses related to his ethics investigation by the State Ethics Commission, Herb Hayden, the commission’s executive director, told The Nerve in a written response, “The Commission had no concern with Gov. Sanford’s use (of campaign funds) to pay legal expenses for administrative violations; however, the Commission has never addressed the question regarding legal expenses for a criminal defense.”

The Republican Sanford, now a U.S. congressman, agreed in March 2010 to pay $74,000 in fines to settle ethics charges brought by the commission alleging improper use of campaign money, the purchase of business-class airline tickets in violation of state law, and the improper use of state aircraft. Sanford admitted no wrongdoing in agreeing to pay the fines, and no criminal charges were brought against him.

In his response to The Nerve, Hayden cited a 1993 State Ethics Commission advisory opinion that said a former Richland County Council member could use her excess campaign funds to defend a lawsuit “directly related to her vote” on a county redistricting plan.

“Whether it’s fines, restitution or legal expenses, the expenditure must be related ‘to the campaign or the office,’ or be ‘any ordinary expenses incurred in connection with an individual’s duties as a holder of elective office,’” Hayden said, citing state law.

But the 1993 opinion noted that the “term ‘ordinary and necessary’ is not defined within the Ethics Reform Act.”

“We can’t define every situation (in the law),” Bingham told The Nerve. “You have to have some ethics committee to define what those parameters are. It’s just an impossible thing to list everything.”

Contacted this week by The Nerve, John Crangle, attorney-director of the government watchdog organization Common Cause of South Carolina, questioned whether the House Ethics Committee would have the will, if necessary, to go to court to force Harrell to comply with its Sept. 1 ruling; and whether any amount to be paid, if ordered by a judge, could be collected from the former speaker.

“The idea that the Legislature can police itself is going to be tested in the Bobby Harrell matter,” Crangle said.

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