Meredith McGehee is policy director at the Campaign Legal Center, a Washington, D.C.-based nonprofit opposed to the influence of big money on local and national politics. She said it’s not realistic to ban part-time legislators from doing business with their state and local governments, especially in small states where the number of businesses in any particular field could be very small.
South Carolina is one of 40 states whose legislators serve part time to varying degrees. Legislators in 24 of those states, including South Carolina, say they spend about 70 percent of the equivalent of a full-time job making policy, campaigning or working with constituents, according to the National Conference of State Legislatures.
California, which has a full-time legislature, is among the few states that have fairly strict limits on outside work by its lawmakers. The majority of states don’t.
Such states need to erect safeguards, impose some restrictions and require a fair, open and transparent bidding and hiring process, McGehee said. Otherwise the deals will have “a fishy odor … there’s opportunity for all kinds of mischief,” she said.
Mark Quiner directs the Center for Ethics in Government for the National Conference of State Legislatures and tracks ethics laws across all 50 states. He said his organization provides no gold standard model for ethics laws because the needs of each state are so varied. “Each state has to decide what’s appropriate,” he said.
Since legislatures act as their own “judge, juries and hangman,” they have to learn how to walk through the bumpy field of policing ethics, Quiner said. In general, he suggests they take a “front page” approach to deciding what’s ethical and what’s not. He tells them to ask themselves: “Would you be comfortable if your local newspaper ran a front page story on you?”
South Carolina’s lawmakers made national headlines in the summer of 1990 when the FBI nailed more than two dozen legislators, lobbyists and others in “Operation Lost Trust,” which was characterized at the time as the largest legislative public corruption prosecution in U.S. history.
In those pre-“Lost Trust” days, some influential state legislators received huge retainers or consulting fees from businesses or organizations and performed no real work, said John Crangle, director of Common Cause in South Carolina. They were, in effect, lobbyists with the power to make laws and spend state money, he said.
Reforms have since been enacted. But Republican Rep. Jim Merrill of Charleston said the only way to completely wipe out potential ethical conflicts in South Carolina is to reduce the length of the Legislature’s six-month sessions or make the job full time. Under the current set-up, “there’s no time for people to make a living,” he said.
Merrill doesn’t make money doing business with the state. But he does make money off other state lawmakers.
He runs the mass mailing business Geechee Communications and has received more than $215,000 since 2008 from other state lawmakers who paid his firm campaign dollars to send mailings to voters to gather their support, raise money or keep them informed.
Merrill said his expenses significantly cut into his actual earnings. He wouldn’t reveal what that profit was, but said the industry average is 15 percent to 18 percent. And, he said, “I guarantee you, if there was any profit, it was well below that.”
Some of the money Merrill received came in 2008 while he served as House majority leader. He left that leadership post shortly after elections in November 2008. He sees nothing improper about accepting business from fellow House members while serving as one of their leaders. In his view, the post carried very little power.
Crangle doesn’t agree. The majority leader is an “influential figure” who serves as the right hand of the powerful House speaker to mobilize votes and keep legislators on board with the party leadership’s legislative goals, he said.
”Anytime a legislator has more power, it creates a greater opportunity for conflicts-of-interest,” Crangle said.
The unknown is a bigger problem
For Crangle, the main way to effectively limit conflicts of interest and ethical violations in a part-time legislature is to impose stringent transparency rules. They should, at a minimum, require competitive bidding for all state and local government business and full disclosure of lawmakers’ income sources.
Currently, legislators do not have to report income unless it comes from state or local governmental agencies, or from businesses or groups that officially lobby or have contracts with government. If a lawmaker gets income from a business or organization that does not lobby the state or have government contracts, neither the source of the income nor the income has to be reported.
And that is a huge problem, Crangle said, because the public has no knowledge that such lawmakers might be voting on matters that might impact their income and the business or organization that pays them.
Consider Senate President Pro Tem Hugh Leatherman, who for years did not disclose that he owned stock in Florence Concrete Products, which has earned about $8.5 million from state contracts since July 2009, mostly from the state Department of Transportation, according to records from the State Comptroller General’s Office.
Leatherman, a founder and former president of the company, did not declare that he was a minority stockholder until 2013, when the websites FITSNews and The Nerve raised questions about his stake in Florence Concrete. Leatherman, a Republican, has still not revealed how much, if any, income he derives from that stock or the size of his ownership interest beyond being a minority shareholder. He did not return calls for comment.