Campaign disclosure reports not always accurate

Campaign finance documents show that four College of Charleston board members donated to Lt. Gov. Glenn McConnell’s campaign last year as he began to seek the job of president of the college, but the information was not accurate. (Photo/File)
Campaign finance documents show that four College of Charleston board members donated to Lt. Gov. Glenn McConnell’s campaign last year as he began to seek the job of president of the college, but the information was not accurate. (Photo/File)

Flaw in procedure suggests false conflict of interest for CofC board

By Ashley Barker
abarker@scbiznews.com
Published April 22, 2014

When Cherry Daniel donated $1,000 to Glenn McConnell’s political campaign six years ago, she was trying to help him get re-elected to the S.C. Senate.

A S.C. Ethics Commission campaign disclosure form indicates that Daniel, a College of Charleston board member, also donated $1,000 in September 2013, just before McConnell started making a bid to be the college’s next president.

But the second donation never actually happened, and neither did several others that were disclosed.

Campaign disclosure forms incorrectly show that four board members, including Chairman Greg Padgett, gave money to McConnell’s war chest last year.

“That figure is old, like six years old. I donated that when I was asked to go to a fundraiser when he was running for re-election to the Senate,” Daniel said. “This was a one-time thing five or six years ago, not something that happened last year.”

When a S.C. candidate transfers funds from one account to another — even if a donation was made years before — the money shows up on campaign records with the date on which it moved from the account, not the date the contributor initially wrote the check.

The law leaves a trail of unreliable documentation that, in the case of the College of Charleston, made board members appear to have a conflict of interest where none existed.

Former Columbia Mayor Bob Coble, now chairman of the S.C. public policy group for law firm Nexsen Pruet, filled out many campaign disclosure forms while serving as mayor from 1990 to 2010. The forms are overseen, made available and published online by the Ethics Commission each quarter.

More than $400000 on the line“The website is very confusing,” Coble said. “I’m sure, and I hope, they are going to improve it.”

He said the system should distinguish between previously donated money being transferred to a new account and new campaign contributions.

“Anytime there is not clarity — and if a reporter is having trouble with clarity, the average citizen who is not as familiar will too — I certainly would think that ought to be a feature in the computer system that they might want to consider,” Coble said. “I could see how adding a transfer designation would be something that’s helpful.”

When McConnell became South Carolina’s lieutenant governor overnight in 2012 after the sitting lieutenant governor was indicted for violating campaign finance laws, campaign contributions from more than 700 people and businesses were trapped in the account of McConnell’s former senate office.

Some of the donations, which reached hundreds of thousands of dollars, were made a decade ago. By law, McConnell no longer had access to the cash since it was given to his senate races and not for the lieutenant governor’s office.

Statute Weakness
There is no way to discern, by looking at the report, between a new contribution and a transferred contribution that was made months or years prior.

“Technically, they are donations. They do have that appearance, but there ought to be some kind of different disclosure form. It’s all done on the same disclosure format,” said Richard Quinn, McConnell’s campaign consultant.

McConnell and other lawmakers who have transferred funds because of an office change follow statutes that mix transferred contributions with new contributions, resulting in duplicate reporting of the same money.

“The ethics commission had to explain to me how to do that (report transferred contributions). It’s a meticulous process. The whole system is a hard system to operate,” McConnell said. “The average person wouldn’t know it’s transferred contributions.”

That’s precisely what the campaign disclosure law was intended to do — allow the public to follow the flow of money to South Carolina political campaigns.

Cathy Hazelwood, deputy director and general counsel for the Ethics Commission, said transfers still have to be listed as contributions because they are contributions to the new office.

“There’s no designation in 8-13-1352 that says the report must distinguish between them,” Hazelwood said, referencing the campaign practices law and penalties section in the S.C. Code of Laws. “This kind of thing happens so seldom. In a year’s time, you might have two transfers like that.”

Transfers most often occur when a member of the House or Senate runs for a statewide race.

“If it were something that was incredibly useful, then maybe it would have been built into the system,” Hazelwood said. “If it’s not in the statute, there’s no designation to do it.”

Contribution Confusion
At least four of McConnell’s contributors would have found the designation useful.

The State newspaper reported in November that Daniel, Padgett and fellow CofC board members John Busch and Daniel Ravenel — who was recently removed from the board — contributed a combined $4,250 to McConnell’s lieutenant governor campaign through September. The report cited S.C. Ethics Commission records.

As it turns out, no board members gave money to McConnell in 2013.

All four said the donations they made to McConnell were many years old. They signed the transfer documentation in September, but didn’t realize that their agreement would result in public records showing they were giving money to a job candidate.

Busch, who is reported as contributing $250 on Sept. 15, 2013, said he only made a donation about four or five years ago when McConnell was a senator, when he didn’t even know the politician.

“Someone else asked me to donate. I donate occasionally, more randomly than anything,” Busch said. “It would be nice if the Ethics Commission would more accurately reflect when a donation was made. It seems like there’s something broken with our whole reporting system.”

Padgett was listed on the site for the most contributions by board members. The commission report says Padgett donated $500 on Sept. 13 and another $1,500 a week later on Sept. 21, 2013.

“I don’t remember writing any checks in 2013. That doesn’t sound accurate,” he said. “As a senator, I certainly did donate money to him. I don’t let my personal actions support my decisions as a board member, though.”

Ravenel said he’s given to McConnell’s campaign many times, and has known the future college president and his family for more than 40 years. Ethics Commission reports show he gave $1,000 on Sept. 21, 2013.

“I don’t think I’ve given in the last year or two, but I’ve been a regular contributor to his campaign for the Senate. I think it’s very misleading,” Ravenel said. “There is a flaw in a system that reports something that didn’t happen.”

Hunting Down Donors
When McConnell assumed the office of lieutenant governor in 2012 after former Lt. Gov. Ken Ard was indicted for breaking campaign finance laws, McConnell’s campaign consultant, Richard Quinn, assigned staff members to begin the arduous task of tracking down each of the former senator’s 700 contributors.

The S.C. Ethics Commission told Quinn’s office that signed permission forms from the contributors would be required to transfer funds from one account to another. He was given limited authorization to use campaign money to pay staff, postal fees and telephone fees to call and send letters to the contributors.

“It was a huge task and a long process,” Quinn said. The staff found that some contributors had since died and many had moved away from their listed address.

Around 350 donors eventually authorized their contributions to be transferred, and none of the ones who were successfully contacted turned down the request, Quinn said.

“We stopped trying to track them down the day that McConnell said he wouldn’t seek re-election,” Quinn said. He made that announcement on Jan. 6.

As the permission forms were returned to Quinn’s office, staff members forwarded them to McConnell, who, like other lawmakers, files his disclosure forms with the Ethics Commission each quarter.

On Oct. 7, 2013, McConnell’s quarterly report included $255,561.58 in contributions. Those contributions included the authorized transfers that Quinn’s staff gathered.

The College of Charleston board of trustees picked McConnell as the school’s next president on March 22.

Reach Ashley Barker at 843-849-3144 or @AshleyNBarker.

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