July 23, 2024

The Nerve Archive

Where Government Gets Exposed

House Bill Tightens Ethics, Lobbying Rules

The NerveThe S.C. House passed a bill last week to tighten state ethics and lobbying rules, including a provision to close a loophole that has allowed some good-old-boy back scratching to continue in the Palmetto State.

Rep. Tom Young, R-Aiken, is lead sponsor of the bill, H. 3183.

It has mad support in the House.

In a 107-0 vote, members of the chamber unanimously gave the bill the second of three required readings on Tuesday, then gave it final approval and sent it to the Senate on Wednesday.

The Senate shipped the legislation to that chamber’s Judiciary Committee. Sen. Glenn McConnell, R-Charleston and president pro tempore of the Senate, chairs that committee.

Sen. Wes Hayes, R-York and chairman of the Senate Ethics Committee, is sponsoring a virtually identical companion version of the House bill. The Hayes proposal, S. 670, was introduced on March 8 and likewise assigned to the Judiciary Committee.

The panel has not taken any action on it in the nearly six weeks since then, according to the General Assembly’s website.

State Ethics Commission administrators wrote the legislation and asked Young and Hayes to sponsor it in their respective chambers, commission director Herbert Hayden told The Nerve in a phone interview.

Created in 1975, the Ethics Commission enforces state laws and rules governing ethics, campaign finance practices and lobbying activities. The commission features an administrative staff, which investigates allegations of wrongdoing, and a nine-member panel, which adjudicates the cases.

One of the commission’s main enforcement tools is the much-loathed fine.

The commission exercises jurisdiction over the state’s nine constitutional officers and a handful of high-ranking appointed state officials as well as locally elected representatives.

The commission does not have authority over state lawmakers. Instead, legislators police themselves via separate House and Senate Ethics committees in a long-criticized fox-guarding-the-henhouse arrangement. (But that’s another story, which The Nerve has reported on extensively, including here and here.)

Hayden says the commission is pushing the legislation to address several issues that have arisen over the years as the agency has attempted to carry out its mission.

The bills feature three main provisions, which would:

  • Broaden the definition of family member as it relates to conflicts of interest;
  • Prohibit lobbyists and their employers, so-called “principals,” from engaging in lobbying activity if they owe a fine for failing to file registration and disclosure forms as required; and
  • Cap fines at $5,000, expand the Ethics Commission’s capacity to prosecute noncompliance with reporting requirements, and increase the penalties for it.

Currently under the law, prohibitions against public officials and public employees from using their positions to benefit their relatives economically are limited to “immediate family” members.

That creates a loophole with respect to non-immediate family members, opening the door to financial shenanigans to help in-laws, for example. “For years we’ve had concerns about that,” Hayden says.

The legislation would nix that limitation and broaden the term to cover family members in general, including brothers- and sisters-in-law.

Meanwhile, current law also permits lobbyists and their principals to continue working the State House for nearly a year even if they’ve skated on paying fines for failing to file registration or income disclosure forms as the law mandates.

It should be noted that the filings are not just run-of-the-mill paperwork, either.

Indeed, they are the essence of transparency in the game of influencing the legislative process. Readily available on the Ethics Commission’s website, the forms allow anyone to see who is paying lobbyists; how much they’re paying them; which issues they’re paying them to lobby on; and how the money is spent.

Usually, lobbyists and their principals register before the start of a new legislative session each year in January. Then, by the end of that month, they must file one of their quarterly disclosure reports.

But if they miss that deadline and are fined accordingly, offending lobbyists and principals can continue to operate under their annual registration for the remainder of the calendar year because the commission cannot revoke it.

“It’s just inherent the way the law reads,” Hayden says.

The legislation would reword the law to allow registration to be suspended in the event of unpaid non-filing or late-filing penalties.

A separate measure, a proviso the House passed as part of its proposed 2011-12 budget, would increase, from $100 to $200, a fee that lobbyists and principals must pay to register. The Ethics Commission could retain half of the money the increase generates; the other half would go into the state’s general fund, according to the budget proviso (82.2).

Hayden says the extra money for the commission would replace a small portion of a more than 50 percent cut to the agency’s state funding in recent years. Four years ago, he says, the state appropriated $600,000 to the commission; this year, $250,000.

Lastly, the bills would cap fines at $5,000 and give the Ethics Commission greater authority to go after violators in court – and a bigger stick with which to do so.

The cap would be a higher maximum for lobbyists and principals and a new limit on penalties that recur for other parties.

Presently, fines against lobbyists and principals top out at $500 but there is no limit on fines for candidates and others who fail to submit campaign disclosure forms and statements of economic interest. If someone does not file one of those documents by the deadline, that person is hit with a $10-per-day fine for the first 10 days, then $100 per day after that.

In such circumstances, Hayden says of the $100 daily fine, “I mean it goes forever until the person files the form.”

Several individuals have racked up five- or six-figure fines under this scenario. Click here to see the Ethics Commission’s “debtors” list.

The bills would raise the cap on filing penalties for lobbyists and principals from $500 to $5,000 and set a new limit of the same amount for candidates and others.

In addition, for all parties, if the $5,000 cap is reached and they continue to violate filing requirements, the legislation would allow first and second offenses to that effect to be tried in magistrates’ courts, with possible penalties to include jail time and additional fines.

As it stands, the Ethics Commission must seek prosecution in circuit court through solicitors’ offices, which typically do not have the time, resources or inclination to pursue such matters, Hayden says. “It [the legislation] allows us to prosecute the case.”

Asked why he is sponsoring the House version of the bill, Young says of its provisions, “I thought they all made sense and would make our ethics law better.”

And what does the lawmaker think of its chances in the Senate?

“I don’t know,” Young says. “I’m going to talk to some senators.”

Reach Ward at (803) 254-4411 or eric@thenerve.org

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