Ending Legal Corruption – A Progress Report

● House bill on self-policing further empowers legislature.
● House income disclosure bills still full of loopholes.
● House FOIA reform bill still allows lawmaker exemption.

The 2016 legislative session has begun with the usual round of speculation, accusations, and factually challenged claims. In her State of the State address, for example, Gov. Nikki Haley left the impression that the House has repeatedly passed strong ethics bills, while the Senate has only blocked them.

The second half is true. The Senate has staunchly refused to pass any significant reform that make corrupt conduct any harder to engage in. The first part is false. Every one of the House’s “ethics reform” bills have fallen somewhere between meaningless to loophole-riddled.

Might that change in 2016? Below are eight areas that will have to be addressed before lawmakers can claim to have accomplished transformative ethics reform.

Restoring judicial independence

Why do we need this reform? Judges are either suspected of, or are in fact, beholden to state lawmakers. South Carolina is the only state in the nation in which lawmakers have unqualified power to unilaterally appoint state judges. The governor plays no part in the process. Legislative leaders and their appointees screen judicial candidates, and the House and Senate members elect them.   

Evidence isn’t hard to find. Consider, for instance, the case of former House Speaker Bobby Harrell, in which a circuit court judge derailed a grand jury investigation into Harrell’s conduct for the slimmest of reasons. Or take the Supreme Court’s wildly perverse decision to toss a slew of State House challengers from their ballots on pedantically technical grounds. Or the Supreme Court’s notorious reluctance to challenge the constitutionality of laws passed by the legislature.

Where does it stand now? A pair of bills now in the Senate would give the governor the power to nominate judges, and the Senate power to confirm – the arrangement envisioned by the American founders. A related bill would give the House advice-and-consent powers as well (an unnecessary provision). A competing bill, meanwhile, would merely change the membership of the Judicial Merit Selection Commission (the legislative body charged with screening judges), but that would still leave the legislature fully in control of judicial elections.

Shortening the legislative session

Why do we need this reform? Nationwide, longer legislative sessions tend to produce higher levels of spending and encourage collusion between lobbyists and lawmakers. South Carolina has one of the longest sessions in the nation, with predictable results.

In 2015, lawmakers spent every dime of revenue they could find, including a substantial late-in-the-session surplus. Indeed, legislative leaders reportedly tried to delay the announcement of the surplus, presumably on the grounds that it undermined their case for a tax increase.

Where does it stand now? The House passed a bill to shorten session by one month, but the bill explicitly allows committee meetings and other legislative work outside the session – virtually defeating the point. A Senate bill would cut session by around 12 weeks. That bill now sits in a Judiciary subcommittee chaired by Sen. Shane Massey.

Making incentives transparent

Why do we need this reform? Lawmakers and other state and local officials routinely dole out tax breaks, special favors, and outright public money to companies they happen to like – which usually happen to be the companies with the best lobbyists. Even though the state’s use of incentives has grown exponentially over the last 30 years, there is no empirical evidence that this practice has resulted in overall economic improvement.

In any case, however, there is no way to verify the overall benefits of incentives in South Carolina, since the whole incentives process is shrouded in secrecy. Public officials are permitted to strike deals with companies in secret, hand over public money and resources in secret, and the results of these “investments” – especially if the results aren’t good – remain confidential in perpetuity.

Where does it stand now? A bill currently in the Senate – legislation based on the Policy Council’s research originally published in 2011 – would go a long way toward ending the secrecy surrounding the state’s incentives process. It would require all taxpayer-backed incentive agreements to be considered as standalone legislation (no more last-minute goodies crammed into unrelated bills). The agreement would also be subject to public input during a mandatory waiting period, and subject to an independent analysis. The bill would furthermore implement a five-year sunset provision on all targeted incentives unless specifically renewed by the General Assembly in a public process. In an effort to create even more accountability, the bill also establishes reporting requirements and mechanisms on the back end of these deals to hold both the state and the businesses accountable. The bill now sits in the Senate Finance Committee.

Complying with the budget law

Why do we need this reform? State law requires the House and Senate appropriations committees to meet in “joint open meetings” at the beginning of each legislative session to debate the governor’s executive budget. Lawmakers routinely ignore this law, and ignore the governor’s budget, too. The law also requires the governor to produce a full spending plan, but that practice wasn’t complied with until Gov. Sanford began producing executive budgets in the early 2000s.

The purpose and benefit of the law is to give the public some idea of what government services their elected representatives consider priorities. By ignoring the law, lawmakers are able to enmesh the entire budget process in a dizzying array of committees and subcommittee, with the result that not even experienced journalists tasked with following the budget have any firm idea of what’s in it until the whole process has nearly run its course. That budgetary secrecy allows lawmakers to slip in highly questionable provisions – multi-million-dollar appropriations to favored agencies, a couple hundred grand to favored nonprofits, and even de facto Medicaid expansion.

Following the law would enable citizens to see what the governor thinks the state should prioritize, and how the legislature thinks those priorities should be changed. In effect, we’d be able to follow the budget as a single, coherent spending plan.

Where does it stand now? Two years ago, the Deputy Speaker of the House, Jay Lucas – now the Speaker – called on House Ways and Means chairman Brian White to begin following the budget law. Days later, Rep. Mike Pitts called the law “antiquated” and introduced a bill to strike it from the code – thus conceding, implicitly, that it is, in fact, state law. The Restructuring Act of 2013 included a provision to strike the budget law, but then that provision was itself deleted. Late in 2014, Rep. Jonathon Hill called on members of his delegation to begin following the law, but so far there has been no effort to do so.

Making the governor accountable for the executive branch

Why do we need this reform? Many agencies that perform executive functions aren’t actually accountable to the state’s chief executive. They’re accountable to one board or another, and those boards are partially or wholly controlled by legislative leaders – controlled by people, in other words, who aren’t elected statewide, who can’t be held accountable by voters who live outside their small districts, and whose names most South Carolinians have never even heard of. The result: gross inefficiency, political favoritism, and outright corruption.

Consider the debate over road maintenance. Many legislators and interest groups continue to push for a tax increase to fund roads, but they ignore the fact that our transportation authorities waste much of the resources they currently receive – waste enabled and encouraged by an unaccountable governance structure. The Department of Transportation (DOT) is technically an executive agency, but it’s governed by a board controlled by the legislature in general and two legislative leaders in particular. The inability of citizens to take complaints about road funding decisions to one accountable individual (the executive) has enabled DOT and other transportation authorities to prioritize needless expansions over maintenance, and to favor politically influential counties.

Where does it stand now? Both the House and the Senate introduced bills this year that would increase fuel and other related transportation taxes and fees without providing any meaningful reform to transportation governance. There was one bill filed this last session which would put DOT policy in the hands of the Governor appointed DOT Secretary where it belongs, but the bill hasn’t left committee. Meanwhile, the house fuel tax bill has already passed that chamber, and Senators have replaced its language with their chamber’s even larger tax hike proposal.

Ending lawmakers’ power to police themselves

Why do we need this reform? In South Carolina, state lawmakers adjudicate each other’s ethics violations. Obvious ethics and even criminal violations are overlooked, many hearings are kept secret, and lawmakers generally go unpunished except in the most egregious cases of misconduct. In general, lawmakers shouldn’t have a special set of laws and be answerable to their own tribunals. The legislative ethics committees should be abolished, and legislators accused of ethics violations should have to answer to a fully independent authority.

The House Ethics Committee recently got tough on former House Speaker Bobby Harrell, but the more important fact is that the Committee did nothing about Harrell when he was still in charge. Indeed, the legislature’s ethics committees are prone to crack down on either (a) lawmakers who have little power within the legislative system, or (b) public officials who aren’t lawmakers. The fact that lawmakers aren’t yet serious about addressing unethical conduct is sadly evident in the recent attempt to legalize the activity that got Harrell into trouble.

Where does it stand now? Numerous ethics bills were filed this year, but none of them would fully end the practice of legislative self-policing. The text of the most significant of these proposals, which began life as S.1, was later inserted into H.3722 (the House ethics bill) by a Senate Committee after it passed the House. This proposal would allow the State Ethics Commission – which oversees all public officials other than lawmakers – to investigate complaints against lawmakers. It would allow the Commission to investigate complaints, that is, but would leave the power to punish members with lawmakers. The bill would change the makeup of the Commission, moreover, to make half its members appointed by the legislature – thus defeating the whole point of putting an outside authority in charge of lawmakers’ ethics violations.

H.3722 is ready to be taken up again by the Senate upon their January return.

Requiring elected officials to disclose all sources of income

Why do we need this reform? South Carolina is the only state in the nation where elected officials don’t have to disclose anything about how they earn income. The potential for undisclosed conflicts of interest is obvious, and South Carolina lawmakers have taken full advantage of it for decades. (Consider the case, for example, of Hugh Leatherman.)

Where does it stand now? As with legislative self-policing, the most significant bills addressing income disclosure would have either taken South Carolina backwards or, at best, maintained the status quo. Once again, the most significant proposal on this issue was found in the original text of S.1, later written into H.3722. While the bill would require the disclosure of private sources of income (with some exceptions), it would exempt elected officials from disclosing government contracts from which they benefit, unless the contract is in their name or the name of a business they own. Both bills would exempt elected officials from disclosing “consulting” income they receive from companies or industry groups – “consulting” frequently being a fancy term for lobbying.

These loophole-ridden bills are not reform. Government contracts and consulting income are precisely the kinds of information that should be made public as a safeguard against corruption. H.3722 can be taken up again by the Senate in January.

Strengthening the state’s Freedom of Information law

Why do we need this reform? Lawmakers are functionally exempt from the state’s FOIA requirements, meaning they can keep secret all their dealings with lobbyists and special interests. Moreover, state agencies can charge exorbitant rates for fulfilling FOIA requests, effectively discouraging citizens from seeking information.  

Where does it stand now? The most significant attempts to “reform” the state’s FOIA law in 2015 would have made government more opaque, not less. Current law exempts legislators’ “working papers” from FOIA requests. H.3190, pre-filed for 2015, would not only have failed to remove this exemption, but actually extended it to all elected or appointed officials and their staff. H.3190 hasn’t left the House Judiciary Committee, but it can be taken up by the committee anytime in 2016.

2015’s other noteworthy FOIA bill has already passed one chamber and is ready to be taken up by the Senate Judiciary Committee in 2016. H.3191 would create an “Office of FOIA review,” which public bodies could petition to stop “unduly burdensome, overly broad, vague, repetitive, or otherwise improper requests.” In other words, under this proposed law public bodies could petition an arm of the government to bully citizens into keeping quiet. The purpose of FOIA reform should be to increase transparency and accountability, not to protect government bodies from inquiries by taxpayers.

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