COLUMBIA — The wild times of South Carolina campaign finance could be coming to a close if cohorts of politicians and officials have their way.
But a fight is coming, with libertarian-leaning state lawmakers defending the new era of dark money in state politics as a matter of free speech.
“I’ve just had a lot of concerns because that just goes to the power of incumbency,” GOP state Sen. Lee Bright, R-Spartanburg, said of lawmakers attempting to again regulate the spending.
Since a 2010 federal court ruling, anonymous groups in South Carolina have been able to raise and spend unlimited amounts of money from undisclosed sources to attempt to swing elections.
The public is left to theorize who is funding the secretive forces and what their agendas are.
“It’s loose as a goose, so to speak, as to who’s out supporting whom,” Senate Judiciary Chairman Larry Martin said during a hearing on ethics reform last week.
Long-serving officials, including Charleston Mayor Joe Riley and more recently Martin and state Sen. Wes Hayes, have been among the high-profile targets of the secret money. In each of those campaigns, the outside cash didn’t work, with all the incumbents winning re-election.
Hayes, a Rock Hill Republican and former chairman of the Senate Ethics Committee, said a group identifying itself as Conservative GOP PAC spent an estimated $100,000 on “negative” mailers targeting him last fall. The group also was among those to go after Martin, a Pickens Republican.
Hayes said the only address the group listed was a post office box in Columbia. The PAC is not registered with the S.C. Secretary of State’s Office.
“We don’t know who they are, who’s donating ... we’ll never know,” Hayes said.
The 2010 court ruling essentially knee-capped the state law that had previously required political action committees and other groups to follow limits on campaign donations.
No longer did the groups have to report their spending and donors to the State Ethics Commission. A federal judge ruled that the state’s definition of a “committee” was overly broad.
Hayes, Martin and others also were targeted by ads purchased by Liber-TEA, a group registered in September to Will Folks, a controversial blogger-provocateur and former spokesman for Gov. Mark Sanford.
In TV ads, Liber-TEA accused Martin of exploiting the state’s legislative pension system and criticized his taxpayer-funded travel expenses.
Martin estimated that Liber-TEA spent more than $100,000 on ads opposing him.
Because of the court ruling, next to nothing is known about who is backing the group. “All we know about the Will Folks thing is that he claimed credit for it,” Martin said.
Folks said the law doesn’t require him to reveal his backers, and it is disingenuous for Martin to try to claim the high ground on transparency when he participated in a little-known, but lucrative, pension plan lawmakers created for themselves.
Lawmakers draw government pensions that are more than three times their pay.
“These guys take things very personally,” Folks said. “But the bottom line is, if you don’t want to be criticized for milking the system, don’t milk the system.”
To date, the theme that has tied Liber-TEA’s efforts together is the targeting of incumbents portrayed as hypocritical and essentially “Republican in Name Only.”
Martin speculates that Liber-TEA and Conservative GOP PAC are connected.
“I somewhat believe they are all associated with the same folks,” he said.
Folks said the two groups are not connected in any way, and he has no clue who is behind Conservative GOP PAC. Folks said Martin and his colleagues would do better focusing on tax relief and government reform than on trying to muzzle those who don’t agree with them.
“I guarantee this year they will put all of this other stuff on the back burner while they try to crack down on the people who criticize them,” he said. “It’s sad. This state has so many problems, but criticism of its politicians is not one of them.”
The focus on the anonymous spending comes against a backdrop of increasing scrutiny of the state’s campaign and ethics rules.
State lawmakers, along with an outside panel created by Gov. Nikki Haley, are taking up ethics reform in light of a string of ethical dustups over the last year.
The controversies, including ethics charges that were ultimately dismissed against Haley, have led to widespread criticism of the state’s ethics laws and their enforcement, or lack thereof.
The ethics panels are expected to offer up omnibus reform packages after the new legislative session begins in January. What happens with the proposals will be up to the Legislature.
At a meeting of a House ethics reform panel this month, State Ethics Commission attorney Cathy Hazelwood told lawmakers that addressing the committee spending loophole should be No. 1 on the group’s agenda.
In a subsequent interview, Hazelwood said she knows of no other state that, like South Carolina, lacks a definition for a committee.
Of the third-party groups formed before the 2010 ruling, 173 have continued to file disclosure forms with the State Ethics Commission, she said.
Hazelwood said new groups aren’t following suit. “When they call up and find out they don’t need to file, they don’t,” she said.
Hayes and Martin said it will be a challenge for the Legislature to come up with a new committee definition that will hold up in court and not conflict with the 2010 decision.
Last week, a Senate ethics study panel with both men as members signaled that it intends to include such a definition in its version of a reform package.
Martin has another idea: Start to level the playing field between candidates and the unregulated outside groups by raising campaign contribution limits.
“It’s nothing but one big game going out there between the candidates who follow the rules and those who are involved for and against candidates in these third-party groups,” he said.
The last time South Carolina tweaked its contribution caps was in the aftermath of the 1990 “Operation Lost Trust” scandal. Raising the current contribution limit for Statehouse candidates from $1,000 per donor per election has been floated several times since, but never advanced far.
Now, Martin said, it makes sense to raise the per-donor limit to $2,000. “What a campaign costs now and then is totally different,” he said. “We probably won’t address this for another 10 to 15 years.”
Martin, Hayes and others opposing the unregulated groups may hit opposition from a wing of ultra-conservatives such as Bright.
Bright said he would “like for there to be some ways people outside the candidates can be involved without threats of intimidation.”
Sen. Tom Davis, R-Beaufort, said he is likely to be highly skeptical of proposals to again regulate these groups.
“I would be against anything that deters or regulates or mitigates citizens’ involvement in the process,” said Davis, a member of the upper chamber’s “William Wallace Caucus,” alongside Bright.
“I mean the bottom line is if you’re a public official, you have to answer questions raised by anybody or anything. It comes with the territory.”
Glenn Smith contributed to this report. Reach Stephen Largen at 864-641-8172 and follow him on Twitter @stephenlargen.
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