Why the Latest Ethics Bill Would Change Nothing

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By The South Carolina Policy Council on Thursday, February 4, 2016 ·

● Bill includes unaccountable exceptions to private income disclosure

● Actually weakens public income disclosure requirement

● Legislative self-policing rearranged, not abolished

● Allows ethics committees to sign off – in secret – on sketchy practices

The Senate Judiciary Committee has passed another long, complicated ethics bill. The amended bill addresses two principal areas: income disclosure and legislative self-policing. In both areas, the legislation makes significant changes to current law, but they are not the kinds of changes that would make South Carolina lawmakers more accountable to the public.

Income disclosure

What’s needed is plain: Full disclosure of all public and private sources of legislators’ income. What the bill does is something very different.

The amended legislation mandates the disclosure of private sources of income that public officials do not have to disclose under current law. A catch-all clause requires public officials to report on their statements of economic interest “the source of any other income received by the filer.” Sounds okay, but there are exceptions: court orders, interest from bank accounts, and mutual funds or similar investment funds.

Why the exceptions? These types of income, particularly court orders and investment funds, are not somehow exempt from conflicted motives.

The bill’s requirements on public income sources are worse. Existing law requires public officials to disclose any compensation they receive from an individual or business that contracts with a government entity with which the public official is employed. The amendment would change this provision to require the official to report only the amount of the contract between the business and government entity.

Politicians should have to disclose any economic benefit they receive from their relationships with government. Simply reporting the contract makes it unclear if they are personally benefiting from the arrangement.

The amendment would also weaken reporting requirements for income received from lobbyists. Current law (8-3-1130) requires public officials to report any purchases over $200 made by a lobbyist to the official, the official’s immediate family, or an individual or business with which the official is associated. So, for example, if a lawmaker owns a hardware store and a lobbyist purchased more than $200 in goods at that store, the lawmaker is required to disclose that amount.

The new version of H.3184 would exempt such income from disclosure if the lobbyist pays “fair market value.” Why, in an ethics reform bill purporting to require greater disclosure, are lawmakers deleting provisions that require income disclosure?

Legislative self-policing

Again, what’s needed on self-policing is plain: Independent investigation and enforcement of corruption and campaign laws. What the amended bill accomplishes is something else.

As with previous ethics bills, the current legislation reconstitutes the State Ethics Commission into an eight-member board with four members appointed by the governor (with the advice and consent of the General Assembly), two members appointed by the Senate, and two members appointed by the House. The new Ethics Commission would conduct initial investigations into ethics complaints made against legislators, but the punishment for these ethics violations would be left in the hands of the General Assembly’s ethics committees, which could choose to dismiss a complaint even if the Commission found probable cause to believe a violation was committed.

In short, the bill would only slightly reshuffle the current arrangement in which lawmakers exercise power over the adjudication of their own ethics violations.
As it stands now, H.3184 wouldn’t even provide independent investigation of ethics complaints, since all of the investigating body’s members would be beholden to legislators. Enforcement would remain entirely under legislators.

The goal, remember, is to make politicians accountable to an independent enforcement agency, just as ordinary citizens are. That will require a rejection of the whole assumption that public officials should have a special part of the law code applying to their misdeeds, and in particular that lawmakers should have special hearings when accused of a crime. The amended legislation doesn’t come anywhere near accomplishing that goal.

Legalizing doubtful practices

Too often, South Carolina lawmakers seem to think “ethics reform” means rewriting the law to conform to current practices, whether the practices are ethically sketchy or not. That’s the case with parts of H.3184.

The amended bill would write into law the ability of legislative ethics committees to issue confidential advisory opinions to legislators. Note the word confidential. The public is not permitted to know about these documents. In practice, they often serve as a greenlight for legislators who may wish to engage in behavior of questionable legality.

For example: The lawmakers may ask the committee whether he can take his family on a trip and pay for it with campaign funds, since the trip bears some vague relevance to “legislative business.” The committee says yes. Later the lawmaker is questioned about the expenses, and he is able to show that he obtained official permission.

That legislative committees can issue these opinions at all is bad enough. That they are confidential is outrageous. Staffers on these legislative committees work for the public, not individual legislators, and the public has a right to know any official interpretations of state law.

H.3184 also fails to address the critical loophole in current law that allows legislators to use campaign funds on expenses “incurred in connection with an individual’s duties as a holder of elective office.” This provision has been stretched to include almost any expense a legislator can conceive of. For example, the House Ethics Committee has ruled you can use campaign funds for legal defense. And the Senate Ethics Committee has ruled campaign funds can be used to make charitable contributions. Multiple legislators have taken advantage of this ruling by spending campaign funds on charities with which their spouse is affiliated.

The bill does add a line prohibiting the use of campaign funds to pay penalties resulting from a criminal prosecution. Beyond that, the legal use of campaign funds is left unchanged. The kinds of expenditures described above would still be permitted under the amended version of H.3184.

If lawmakers are going to reform the state laws governing the conduct of public officials, they ought to make major, transformative changes to the state’s notoriously lax ethics laws. On the evidence of this bill, they’re concerned mainly to keep current law as it is and to legalize current doubtful practices.

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