Weak, Confusing Ethics Bill Has One More Shot

● One last chance for this year’s omnibus “ethics” bill
● Self-policing provision makes little actual improvement
● Income disclosure provision contains loopholes, exceptions

The Senate may take one more shot at ethics reform when the legislature returns from break next week. The chamber has already taken one shot at passing a bill this year, and failed. Not only did the Senate fail to pass the bill, however: they also failed to consider a bill that could reasonably be called reform.

Recap

The Senate Judiciary Committee passed S.1 out of committee in January. The committee version of the bill would

  • not achieve truly independent investigation and enforcement of ethics laws.
  • legalize the practice of lawmakers receiving de facto permission from House and Senate ethics committees to engage in ethically doubtful activities.
  • require recusal for only some decisions in which the lawmaker has a personal interest.
  • require the disclosure of some private income, but with wide loopholes.
  • loosen the requirements on public income (the House bill also did this).
  • loosen the disclosure requirement on PACs via the “major purpose” loophole.
  • force non-electoral advocacy groups to disclose top donors.

The self-policing provision was massively amended when it reached the Senate floor. The amended version would have created a joint legislative ethics commission to investigate ethics complaints against lawmakers and their staff. The joint commission would have been comprised of two senators, two House members, and five non-legislative members (three appointed by the governor with advice and consent of the General Assembly, and two appointed by the attorney general).

The original committee version hadn’t eliminated self-policing either, but the amended version didn’t even pretend to reform the current system. In any case, that forced a majority of senators to vote against the bill, ultimately killing the measure.

Shortly thereafter, though, the House passed its omnibus “reform” bill – H. 3722. With the Senate bill dead, Sen. Larry Martin (R-Pickens) – chairman of the Judiciary Committee – held a full committee meeting on the House bill, entirely skipping the subcommittee process, which allows for public testimony. The Judiciary Committee took H. 3722, gutted it, and inserted a version similar to what the committee had recommended on S.1. Members passed the bill out of committee favorably, and it now is sitting on the calendar waiting for consideration – which brings us to the present.

This bill in its current form has several major problems. Its supporters claim it ends the practice of legislative self-policing and that it brings more transparency to potential conflicts of interest; it does not. One provision, moreover, would open the state to a federal court challenge by regulating South Carolinians’ freedom of speech.

Little change on self-policing

Would this bill put legislators under the State Ethics Commission? Sure, but not without giving the legislature greater control over the Commission – which defeats the point.

The senate version of H. 3722 would reconstitute the Ethics Commission to eight members, with four members appointed by the governor (only two of whom may be from the same party as the governor), two members appointed by the Senate (one from the majority caucus and one from the minority caucus), and two appointed by the House (one from the majority caucus and one from the minority caucus). All of these appointments must be done with the advice and consent of the General Assembly.

At first this may seem reasonable, given that the current commissioners serve upon the advice and consent of the General Assembly. However, this bill would allow the legislature to make four appointments to the commission without the oversight they exercise over the gubernatorial appointments – meaning that not only will they advise and consent on four of the appointments, but they will also make four additional appointments to the commission without any check at all.

Similar to S.1, this bill would limit the documents that can be released after a finding of probable cause. The complaint itself, a response by the subject of the complaint, and the notice of hearing – these are the only documents the public would have access to even after the committee finds probable cause. It also limits documents subject to disclosure after the final order is issued to the order itself and all exhibits introduced at the hearing.

Further ensuring that the bill won’t involve serious reform, several provisions allow the legislative ethics committees to review the commission’s findings as it pertains to complaints against lawmakers; and it allows those committees to overrule the Ethics Commission regardless of whether the Commission has found probable cause. This would allow the complaint to be dismissed and all related documents to remain confidential. That sounds like a lot of things – “independent investigation and enforcement” isn’t one of them.

Income disclosure: one step forward, two steps back

Not only would the bill preserve the status quo, it actually makes current law worse. The bill does require a higher level of private income disclosure, but it removes disclosure requirements on government income.

Currently elected officials are required to report the money they earn from government contracts in their statement of economic interests, or SEI, including the amounts earned. Just as S.1 would have done, this version of H.3722 would free officials from even that modest provision by requiring only the disclosure of direct payments to the business or individual who holds the contract. So, for instance, if a lawmaker makes large amounts of money by winning cases before the (state) Workers’ Compensation Commission, he would only have to disclose that his firm earns the money, not that he does.

The bill would provide an exemption for reporting private income, too. In addition to exemptions for income from court orders and brokerage accounts, the bill specifically exempts income received from consulting with lobbyist principles as long as they are paid at fair market value (see 8-13-1120)(11).

So while this may be the last at “ethics reform” for the foreseeable future, senators have made no more of an attempt to actually reform the current system as they previously had.

There is currently an objection on the bill, making it unlikely the Senate will take it up unless the body votes to set the bill for Special Order. This would require a two-thirds vote of the members present and voting. If Special Order status is agreed to, the bill will become a priority for the Senate.

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