Harrell offers no details on self-reimbursement of $325,000 from campaign funds
South Carolina House Speaker Bobby Harrell has reimbursed himself more than $325,000 from his campaign war chest since 2008 but has produced no receipts or itemized invoices accounting for the spending, a Post and Courier examination has found.
S.C. House Speaker Bobby Harrell is a licensed pilot who can fly three passengers in his fixed-wing Cirrus SR22, a single-engine propeller plane that was manufactured in 2001, according to the Federal Aviation Administration database.
The model retails new for $449,900, though a fully-loaded plane costs an additional $170,000, according to the manufacturer, which bills the SR22 as “luxury travel at is ratified best.”
Harrell registered his plane under the name Pierpont Air, an LLC whose business address is listed as his State Farm insurance office on Sam Rittenberg Boulevard.
The speaker keeps the plane at Atlantic Aviation, a private airport on South Aviation Road in North Charleston. An Atlantic employee said the short-term rate to keep a single-engine plane such as Harrell's in a hangar is $100 nightly. She said she did not have long-term rates available. Other plane expenses include fuel, maintenance, certification and insurance.
Charleston County property tax records show Harrell's Pierpont Air paid $4,300 in taxes on the plane in 2011, down from more than $5,000 in 2009.
State politicians must maintain such documentation for four years to prove they are using campaign money for political rather than personal spending. Harrell told the newspaper that all his expenses are legitimate. But the State Ethics Commission said that without the required documentation, it is impossible to confirm that Harrell spent the money properly.
SECTION 8-13-1302: Maintenance of records of contributions, contributors, and expenditures.
(A) A candidate, committee, or ballot measure committee must maintain and preserve an account of:
(1) the total amount of contributions accepted by the candidate, committee, or ballot measure committee;
(2) the name and address of each person making a contribution and the amount and date of receipt of each contribution;
(3) the total amount of expenditures made by or on behalf of the candidate, committee, or ballot measure committee;
(4) the name and address of each person to whom an expenditure is made including the date, amount, purpose, and beneficiary of the expenditure;
(5) all receipted bills, canceled checks, or other proof of payment for each expenditure; and
(6) the occupation of each person making a contribution.
(B) The candidate, committee, or ballot measure committee must maintain and preserve all receipted bills and accounts required by this article for four years.
SECTION 8-13-1360: Contribution and expenditure reporting form; contents.
(A) The State Ethics Commission shall develop a contribution and expenditure reporting form which must include:
(1) a designation as a pre-election or quarterly report and, if a pre-election report, the election date;
(2) the candidate's name and address or, in the case of a committee, the name and address of the committee;
(8) the aggregate total of all contributions, loans, and other receipts during the reporting period and the year-to-date total; the amount, date, and a brief description of each expenditure made during the reporting period, the name and address of the entity to which the expenditure was made, and the year-to-date total of expenditures to that entity. Credit card expenses and candidate reimbursements must be itemized so that the purpose and recipient of the expenditure are identified;
(B) A candidate or committee must disclose all information required on the form developed under this section.
State law also requires candidates to itemize their expenditures on disclosure forms filed with the commission. Portions of Harrell's forms lack such itemization. Asked about the matter, Harrell's office said in a statement: “The Speaker is in full compliance with all requirements of the SC Ethics Act.”
Many of the reimbursements cover the speaker's costs for using his private plane for “official legislative trips and politically related travel,” Harrell's office said in an emailed response to the newspaper's questions. The office said flying the four-seat, single-engine Cirrus SR22 costs “as much as $800 or $900” a leg. His office did not respond to written questions asking how the speaker arrived at those figures. Harrell pilots the plane himself.
In addition to attending campaign events and fundraisers for other House members, Harrell said in a statement that he uses the funds for travel related to his legislative duties.
“While South Carolina is known for having a rough and tough political history, I never thought I'd be attacked for saving taxpayers money by using campaign funds instead of state funds to pay for official Legislative expenses,” Harrell said in his statement.
Flight logs filed with the Federal Aviation Administration show Harrell has flown the 30-minute route between Charleston and Columbia more than 110 times since 2008. Other destinations include Augusta during the week of the Masters Golf Tournament in 2009, Miami and Key West, the flight logs show.
Harrell, who was elected to the House in 1992, has repaid himself nearly a quarter-million dollars for travel expenses over the past four years, the newspaper found. On his campaign finance reports, the Charleston Republican provided no descriptions of where he went or the reasons for the trips.
Along with requiring that expenditures be itemized on state filings, South Carolina law says that politicians using campaign funds must “maintain and preserve all receipted bills and accounts … for four years.” The newspaper asked to review all such documents related to Harrell's political travel and other reimbursed expenses. Harrell did not respond to multiple requests from the newspaper over the past month to provide those invoices or any other documents showing how the nearly $326,000 was spent.
Harrell “is not being accountable by any stretch of the imagination let alone the letter of the law,” said Edwin Bender, executive director of the National Institute on Money in State Politics, an independent group that monitors campaign finance laws. “This is someone who has become brazen because he's so confident of his power.”
Harrell did not address most of the questions the newspaper submitted in writing on Aug. 30. Harrell declined repeated requests to be interviewed.
Harrell's office provided no explanation as to why Harrell reimbursed himself rather than directly paying vendors such as airport fuel services, restaurants or hotels.
Early in the newspaper's examination, the Ethics Commission, an independent state agency, criticized the lack of receipts and itemizations, noting that Harrell's reimbursement practices made for “incomplete disclosure” and “shouldn't be done.”
On Tuesday, however, Commission Executive Director Herbert R. Hayden refused to discuss the issue, saying his agency was not authorized to weigh in. The commission, which has commented freely in the past on ethics matters involving state lawmakers, depends on nearly $323,000 in general funds appropriated by the state Legislature for about half of its annual budget.
On Friday, Harrell spokesman Greg Foster confirmed that the speaker's office contacted the Ethics Commission regarding its involvement with this story.
“Neither the Speaker nor anyone in his office has told the Ethics Commission that they should not talk to anyone,” Foster said in an email.
Enforcement of rules on self-reimbursement and record keeping rests with the House Ethics Committee, a panel of six of Harrell's fellow lawmakers. Campaign contributions to five of them through a political action committee he is affiliated with. Through the PAC, money has been given to more than 130 legislative candidates.
Committee Chairman Roland Smith, who has received at least $2,000 from the PAC, said he “can't comment on anything about the Ethics Committee.”
“I'm not trying to avoid the situation,” the Aiken Republican said. “You know I can't afford to talk about it. I can't talk about it.”
South Carolina law says campaign expenses “must be drawn from the campaign account.”
Cathy Hazelwood, general counsel for the state Ethics Commission, the independent agency that is separate from the Ethics Committee, initially told the paper that the wording “means no reimbursing.”
It “shouldn't be done because you're not accurately disclosing what the campaign is actually buying,” Hazelwood said in an Aug. 30 email to the newspaper.
In the email she offered this example: “A campaign should have a specific expenditure to a staff member and not to the candidate who's paying the staff member.” Anything else “makes for incomplete disclosure,” she wrote. Prior to last week's no-comment directive from executive director Hayden, to whom she reports, Hazelwood also had discussed the issue at length via telephone.
But when the newspaper sought additional information from the Ethics Commission last week, after Hazelwood's interpretation was disputed by a lawyer working for the Legislature, Hayden said in an email: “We are not authorized to comment on matters involving members of the General Assembly.”
Hayden referred the paper to the House Ethics Committee.
Patrick Dennis, a House attorney who has worked with that committee, had asked Hazelwood for her interpretation of the reimbursement law in an Aug. 30 email obtained by The Post and Courier. He sent the note hours after the newspaper submitted its initial inquiries in writing to Harrell's office.
Hazelwood responded to Dennis: “When reimbursements are done to the candidate you don't know who they paid or how much or what for. You just have a bald description of reimbursement to candidate with little or no detail.”
Contacted Wednesday, Dennis disagreed with that interpretation.
“There's absolutely nothing wrong with self-reimbursement as long as the extent being reimbursed is a legitimate campaign-related expense,” Dennis said. “It doesn't matter whether you pay yourself or not as long as you don't lie about it.”
Despite that difference of opinion, Dennis and Hazelwood both agreed that the record-keeping portion of the law is clear.
“You are supposed to be able to substantiate what you report on your disclosure if the committee or the commission asks to do so,” Dennis said.
If a politician can't do that?
“I haven't ever dealt with that situation,” he said. “I'm not prepared to answer that question.”
The newspaper five times over the past month asked whether Harrell's office could provide either itemizations or receipts describing his reimbursed spending, as required by law. Harrell's office said the speaker is in overall compliance with the law.
Bender, of the Montana-based National Institute on Money in State Politics, called Harrell's relationship with both the Ethics Commission and the House Ethics Committee a “fox-and-hen-house classic.”
“He's a very powerful guy, and no one wants to do anything for fear of retribution,” Bender said.
Harrell's campaign donors should be concerned by the lack of accounting for the nearly $326,000 the speaker reimbursed himself, Bender said.
“People are giving him money to represent them as citizens,” he said, noting the public has no way of knowing how the reimbursements were spent. “When someone is raising in the six figures and running unopposed — they don't have to use that money to campaign.”
Harrell's office said his business affairs as a State Farm insurance agent and his personal travel expenses “are not paid for using campaign funds.” Harrell did not reimburse himself for the trip to Augusta during the Masters or for the trip to Key West, although he did reimburse himself for two trips to Miami for National Speakers Conference Executive Committee meetings, Foster said in an email.
“The Speaker's duties require him to travel more than the average member,” Foster wrote.
The public is right to be skeptical of campaign spending, said Bob Stern, a former administrator of the Council on Governmental Ethics Laws, a national association of ethics officials and experts.
“How are they supposed to enforce the personal use law if they can't see the records?” he asked.
Harrell reimbursed himself for travel about 40 times since 2008 for a total of $231,561, the newspaper's analysis of the records shows.
On nine separate dates, he paid himself $10,000 or more. Three times he paid himself more than $20,000 on a single day for what he reported as travel. Amounts listed on the reports include “travel costs incurred over several months,” according to Harrell's office. The date listed on the campaign finance report indicates when the check was cut, not when the actual travel took place, the office said.
Harrell's Ethics Commission filing, which does not list travel and other expenses individually, conflicts with the state law that says “candidate reimbursements must be itemized so that the purpose and recipient of the expenditure are identified.”
Harrell's office refused to answer the newspaper's questions about the lack of itemization.
Foster said the “role of speaker includes various additional responsibilities that require the speaker to travel and represent the entire House, the House Republican Caucus and the state of South Carolina.” Harrell traveled for federal court proceedings, funerals, meetings involving the National Speakers Conference and more, his office said in its statement.
In his statement, Harrell said: “While state funds should never be used to pay for political expenses, I also make it a point to try and save taxpayers money by using campaign funds to cover costs associated with many of my duties as House speaker.”
In a separate email, Foster added: “For many of these trips, it would have been completely appropriate and justified for him to have used the State Plane. Instead, Speaker Harrell chose to use his own plane and by doing so save taxpayers thousands of dollars.”
In addition to the campaign reimbursements, records show Harrell has taken annual taxpayer-funded stipends, according to statements of economic interest filed each year since 2008. The “in-district” rate for state lawmakers generally is $12,000 a year. Harrell reported receiving $44,999 in taxpayer-paid “salary, per diem, mileage, etc.” on his 2012 income statement filed with the Ethics Commission.
The newspaper reviewed filings submitted by the 21 members of the Charleston County legislative delegation and found that other lawmakers also reimbursed themselves directly from campaign coffers. None of them, however, approached Harrell in the amounts and frequency of self-reimbursements.
Harrell also reimbursed himself for a variety of expenses beyond travel, bringing the total reported reimbursements since 2008 to $325,836, the newspaper's analysis found.
He took more than $7,500 over the past four years to pay for Christmas gifts and flowers for his staff and for fellow lawmakers.
This year, he reimbursed himself more than $58,600 for administrative and clerical staff. His campaign reports offered no additional details. In its statement, Harrell's office said those expenses “were related to Regina Keene, executive assistant and scheduler for the speaker who works out of his Charleston office.”
Harrell's office did not respond to follow-up questions asking why the campaign did not pay Keene directly. In an email, Foster said “all appropriate state and federal payroll taxes are withheld and filed as appropriate.”
Rather than pay a phone and Internet provider directly, Harrell paid himself more than $16,000 since 2008 to cover those and other “communications” and “computer services” costs, his filings show. Instead of paying the U.S. Postal Service, he paid himself more than $1,200 for postage over that time, the reports show. No receipts were provided.
Other lawmakers, including S.C. Reps. Seth Whipper and Jenny Horne, made detailed disclosures that reported direct payments to vendors.
Whipper, D-North Charleston, bought stamps at the Pinehaven Post Office in North Charleston for $84, according to one of his reports. Horne, R-Summerville, reported paying $225 in April to the Post Office on North Gum Street in Summerville.
Horne's fuel charges also were detailed. She reported paying $52.50 to the Shell station on North Main Street in Summerville for gas to travel to a “Caucus Tax Committee meeting,” according to the filing. Other legislators reported gas mileage reimbursement to specific meetings or campaign events.
Driving a car is not practical for the speaker, his spokesman said.
“Using his own plane allows him to attend and address many more of these duties than had he driven to them all, and allows him to get back home to his family.”
Reach Renee Dudley at 937-5550 or on Twitter @renee_dudley.
Editor's note: Earlier versions of this story need correcting. South Carolina law does not require House Speaker Bobby Harrell to produce for the public receipts or itemized invoices accounting for how he spent campaign funds. It does require him to maintain the records, receipts or other proof of payment for campaign expenditures dating back four years.
The Palmetto Leadership Council, a political action committee affiliated with Harrell, has given campaign contributions to certain legislative candidates and members. The House Ethics Committee is a separate and independent body that does not report to Speaker Harrell.