That O.L Thompson and Bobby Harrell are political allies is a no-brainer.
The former is the chairman of the board for Santee Cooper, the massive state-owned utility that is second in the nation in size and third in power generation. The latter is the most powerful man in the state House of Representatives, if not the entire Legislature.
The former is a political appointee who also sits on the S.C. Coordinating Council for Economic Development, an 11-member panel that doles out millions of dollars each year in grants and other incentives ($200 million since 2008, according to a review by The Nerve of S.C. Department of Commerce data) to some of the state’s largest companies.
The latter is the S.C. House speaker and one of the state’s economic development legislative leaders, helping orchestrate the Boeing deal and sponsoring the 2010 Economic Development Competitiveness Act that changed key language that regulates, among other things, what qualifying companies pay in corporate income and property taxes.
In short, the former helps shape how much client companies pay for electricity, the latter how much they and other businesses pay in taxes.
Like many in such positions, their highest-profile occupations aren’t where they make the majority of their money, and that’s where the connections between the two men go beyond the philosophical and into the shadowy world of political back-scratching and campaign-finance loopholes that allow both men to legally pour thousands of dollars into each other’s pockets.
In Thompson’s case, he’s the beneficiary of more than $14,000 in payments from Harrell’s campaign accounts for the rental of an airplane belonging to Thompson’s private construction firm, according to an email response from Thompson to The Nerve Tuesday afternoon. Thompson didn’t say, though, why Harrell, a licensed pilot who reportedly has his own private plane, wanted to rent Thompson’s aircraft.
Thompson’s construction firm is one of 20 businesses registered under his name, according to S.C. Secretary of State files.
In Harrell’s case, Thompson himself or his assorted companies have donated $4,000 to Harrell’s campaign coffers this past election cycle alone.
And that’s likely just the tip of a financial iceberg shielded almost completely by the muddied waters of weak state ethics laws that require public officials to disclose income derived only from government pay or contracts, and a self-policing system in which legislators are allowed to interpret ethics statutes.
Thompson responded briefly in an email Tuesday after multiple unsuccessful attempts over the past week to reach him. The Nerve also left phone and written messages for Harrell through his spokesman, Greg Foster, but received no response.
As has been his longstanding practice with The Nerve, Harrell did not respond Tuesday to a direct phone message seeking comment.
Playing the (Shell) Game
Thompson was installed as Santee Cooper’s chairman (a position that pays $24,000 a year, according to Santee Cooper spokeswoman Mollie Gore) in November 2005 to fill an unexpired seven-year term that began in May 2004, which means his term officially expired in May 2011.
Ever since, Thompson has been serving unofficially while Gov. Nikki Haley decides whether to re-appoint him or choose a new chairman. An email to The Nerve from Haley spokesman Rob Godfrey said that per her longstanding policy, Haley does not comment on appointments until they are finalized.
Procedurally, after a gubernatorial nomination, candidates for Santee Cooper’s board of directors are required to be screened by the state Office of Regulatory Staff’s Public Utilities Review Committee (comprised of House and Senate members and four representatives from the public) and then be confirmed by the full Senate.
So for Thompson, who was appointed under former Gov. Mark Sanford, staying in Haley’s good graces probably is a good idea if he wants to remain the Santee Cooper chairman. Campaign records show he contributed the maximum amount to her campaign in 2010, both in the Republican primary runoff ($500 on June 23, 2010, from O.L. Thompson Construction) and general election ($3,500 personally on Sept. 2, 2010), and already has given $3,500 to her 2014 campaign (Oct. 7, 2001, from O.L Thompson Construction).
And yet, though Thompson gave Haley the maximum donation per cycle, for the most powerful men in the State House – Harrell, R-Charleston, in the House and Hugh Leatherman, R-Florence and the Senate Finance Committee chairman, in the Senate – Thompson went to the well four times for the 2012 election, as circumventing the maximum-allowable amount per election cycle is no barrier legally in South Carolina and elsewhere.
The key is to have multiple corporations or LLCs from which to give, and according to the S.C. Secretary of State’s website, Thompson is the registered agent for 20 companies, all but one of which have addresses at either 3691 Paramount Dr. in North Charleston (a single standalone, two-story brick building with the sign “Thompson Companies” in front) or 124 Medway Road in Goose Creek (a large industrial storage area with a two-story warehouse off North Goose Creek Boulevard).
Businesses registered under his name include: Thompson Equipment Maintenance; Wando Redimix; Adamada, LLC (incorporated in Delaware); OL&T LLC; Thomot, LP; Thompson-ADA Properties; Thompson-Cainhoy Properties; Trucking Holdings, LP; O.L. Thompson Construction Co.; Thompson Trucking Co.; Thompson Group; TST, LLC; Thompson North Charleston Properties; Thompson Northside Drive; Lee Holdings, LLC; MDA, LLC; Wando Concrete, LLC; 124 Medway, LLC; Builders Doors & Hardware; and C.C.P., LLC.
“As long as each business is not a sole proprietorship, then O.L. Thompson can make a max contribution and his three businesses can also,” Cathy Hazelwood, the State Ethics Commission’s chief attorney, toldThe Nerve in an emailed response to questions.
“Section 8-3-1314 (of the S.C. Code of Laws) provides that a ‘person’ may not make more than a $1,000 contribution in a local race,” Hazelwood continued. “’Person’ is defined in Section 8-13-1300(25) as an individual, a proprietorship, firm, partnership, joint venture, joint stock company, syndicate, business trust, an estate, a company, committee, an association, a corporation, club, labor organization, or any other organization or group of persons acting in concert.”
For Harrell’s 2012 election campaign, Harrell received $1,000 contributions from O.L. Thompson Construction (Oct. 6, 2011), O.L. Thompson III (Sept. 30, 2011), Thompson Trucking Company (Oct. 6, 2011), and Wando Concrete (Oct. 6, 2011). The same four entities also contributed $1,000 apiece for Leatherman’s 2012 campaign.
“Apparently, Thompson is running conduit contributions similar to what (New York real estate developer and political contributor) Howard Rich does, with 22 or 23 LLCs making contributions but which ultimately are from the same source,” said John Crangle, an attorney and executive director of Common Cause of South Carolina, a political watchdog group that monitors corruption in government. “You’re basically evading campaign contribution limits by using these LLCs as conduits through which to funnel multiple maximum contributions.”
“The problem with that type of thing is there is no theoretical limit as to what you can do,” Crangle continued. “There’s no reason a guy can’t establish five or five hundred or five thousand or a million of them to funnel money through. That’s why it’s so problematic.”
Friends With Benefits
For Thompson, the value of his relationship with Harrell is precise: $14,762.48 since 2008, which is as far back as state law requires records to be kept by political campaigns.
Over that period, Harrell’s political campaign paid O.L. Thompson Construction for at least two trips, using the company’s airplane. While the expenses from 2008 to 2011 are all labeled under the category of “legislative travel,” the 2012 expenditures are specific: One is labeled a “Trip to Myrtle Beach” ($2,092.38), and the other a “Trip to Darlington” ($1,730). Both were paid on the same date: July 2, 2012.
The other travel expenses paid to Thompson’s construction firm were as follows: $4,292.60 on July 24, 2008; $2,302.50 on July 15, 2010; and two in 2011 – $2,420 on May 24 and $1,925 on June 20.
“These payments were received for the cost of airplane travel by Mr. Harrell,” Thompson wrote The Nerve in his emailed response Tuesday.
No further information was provided, and multiple requests for interviews and explanations of these charges from Harrell through his spokesperson, Greg Foster, went unanswered for two weeks prior to this story.
State law allows the reimbursement of legitimate campaign-related travel expenses, but Hazelwood said state law also requires that “a mileage log and reimbursement under the IRS guidelines.”
The Nerve’s questions about whether mileage logs were maintained as required by law for those trips were not answered by Harrell’s office.
Last year, the Charleston Post & Courier newspaper similarly was unable to determine what records and receipts were kept when it reported that Harrell had reimbursed himself $325,000 from his own campaign coffers from 2008 to 2012. The Sept. 24, 2012, story noted that “Many of the reimbursements cover the speaker’s costs for using his private plane for ‘official legislative trips and politically related travel,’” citing an emailed response from Harrell’s office.
The Post & Courier‘s findings did not include the additional $14,762.48 he paid to rent Thompson’s plane. The Nerve in October reported on discrepancies between Harrell’s plane and car travel during the 2008 and 2010 legislative sessions, based on a review of flight and House car-mileage records.
Harrell’s reimbursement from his campaign for use of his private plane was among several ethical issues involving the speaker that were cited in a complaint filed last month by the South Carolina Policy Council, The Nerve’s parent organization, with the S.C. Attorney General’s Office, which turned it over to the State Law Enforcement Division.
Harrell has repeatedly denied he has done anything wrong, and he has not been charged with any criminal or administrative violations.
For critics such as Crangle, the entire system is one ripe for corruption – if not already knee-deep in it.
“A lot of those situations are highly incestuous, where these guys are putting money in each other’s pockets,” Crangle said. “There’ plenty of opportunity for payola in these situations. I don’t know what’s been going on beneath the surface, but I think it’s quite possible that if the SLED investigations continue and the feds get involved, people will find shocking all the shenanigans that have been running here for the past 20 years.”
Specifically, Crangle said that the legislative-travel category is one routinely abused by lawmakers.
“It’s another one of the many mysterious expenditures of money for unexplained purposes,” Crangle said. “When you talk about ‘legislative travel,’ what does that mean? What function is being performed? Does it have a legislative purpose, or are they just going golfing? We don’t know and they won’t tell us.”
“The documents that Bobby Harrell filed are so opaque that they’re largely worthless as far as expenditures go,” Crangle continued. “The numbers are given and the dates and payees, but we really don’t know what the expenses were designed to accomplish.
“If SLED really goes after this thing investigatively, I think (Harrell) has a hell of a lot of explaining to do regarding these travel expenditures.”
And he may have to ask some of his friends to help – if, that is, they’re more open with investigators than they are with the public they serve.
Reach Aiken at (803) 200-8809 or ron@thenerve.org. Follow him on Twitter @RonAiken. Follow The Nerve on Facebook and on Twitter @thenervesc.