Sanford under fire over grant

Senators question use of leftover funds

The governor's office lobbied for a state grant to bring the National Governors Association conference to Charleston while publicly criticizing such legislative earmarks, the man in charge of the grant board says.

While the governor's office denies the charge, some powerful senators are considering an investigation after $100,000 left over from that 2006 conference was deposited in the account of a nonprofit organization "to educate the voters" run by friends of Gov. Mark Sanford.

"If the answers are not forthcoming, I will ask the Legislature to form a committee to fully investigate this matter," said Sen. Jake Knotts, noting he had spoken with Senate President Pro Tem Glenn McConnell and Sen. Hugh Leatherman.

McConnell says there are concerns, and gossip is spreading fast at the Statehouse.

"It's disconcerting to see this type of political activity going on," said McConnell, R-Charleston. "The governor's office has tried to elevate itself above the element of politics and this story puts them right on the plane."

Sanford's office on Tuesday said the money, which was given to Carolinians for Reform Inc. in August, would be returned to state coffers, calling it a precedent and suggesting senators such as McConnell have not been "transparent" on their own projects, such as the conservation of the Confederate submarine Hunley.

"In all of the millions of dollars that have been awarded in competitive grants, not one single event has come in under budget, and not one single event has returned money to the state," Sanford Press Secretary Joel Sawyer said.

All of this goes back to a conference moved here from Mississippi after Hurricane Katrina devastated the Gulf Coast.

Jimmy Bailey, chairman of the state Competitive Grants Review Board, said that in April 2006 Scott English — one of Sanford's top aides and the governor's appointment to that grants board — talked with him about a $150,000 grant request to help bring the National Governors Association annual conference here.

The next day, Tara Nelson, then an employee of the association, called Bailey's private telephone number to see if he "had any more questions" about the conference or grant request. She got the number, Bailey said, from the governor's office.

"Scott English lobbied me, she followed up," Bailey said.

Sawyer said Wednesday evening that English did not lobby for the grant but was supportive of it because of the economic benefits for the state.

"He voted for the grant because we recognized the economic impact it would bring," Sawyer said. The conference is estimated to have had a $4.3 million impact on the Charleston area.

The Parks, Recreation and Tourism grant was requested by two Lowcountry lawmakers, but the governor worked hard to bring the conference to Charleston, raising $1.2 million in private money for the event.

In a letter to Bailey earlier this year, Nelson said all $150,000 of the grant money was spent, and detailed where it went — 40 percent to events, 19 percent to security, 15 percent to administrative costs and the rest for hospitality, transportation and meeting logistics.

As such, Bailey said he was surprised to hear Wednesday that there was more than $100,000 left over.

"Why didn't that come back to us?" Bailey said. He pointed out the committee has been adamant in its rules that grant money be used only for the purpose stated in the original request.

Sawyer said, in fact, none of the grant money was left over.

"The money received from the grants program was all spent on the National Governors Association and the money left over was private money," Sawyer said, according to the accountability report.

In August, Sanford staffers directed that leftover conference money be transferred to Carolinians for Reform Inc., a Charleston nonprofit. Knotts told reporters about the transfer Tuesday, and on Wednesday insisted Sanford disclose any connection between the nonprofit and smear campaigns against the governor's political enemies — meaning him, among others.

Sawyer says that Knotts is only criticizing the governor's office, however, because of politics.

"Sen. Knotts isn't asking questions," Sawyer said. "Sen. Knotts is making allegations."

The subject of grants is a touchy one at the Statehouse. The governor has been openly critical of the grants program in recent months, calling the earmarks program a slush fund for legislators with little or no competition. Sawyer said that knowing what he knows now, the governor's office might not have supported the grant for the governors conference.

But why Sanford had the authority to move money is the question Knotts and McConnell want answered.

McConnell said the leftover conference money could not be considered "private." When private and public money is mixed, it becomes public money.

"I think by their own admission, now that they've decided to return the money, that the best practice was to send the money back," McConnell said.

Little is known about Carolinians for Reform, the group that received the money. It filed articles of incorporation in November 2005, listing its mission as being to "educate the voters about policies here in the state of South Carolina in order to help them make decisions," said Secretary of State Mark Hammond.

Among its board of directors are James Kuyk of Charleston, Tim Reese of Sullivan's Island, both of whom are listed on documents for the political action committee Carolinians for Change. While Sawyer said the organizations are distinctly different and that Knotts' allegations are "a paranoid delusion," Sanford is listed as honorary co-chairman for Carolinians for Change in documents filed at the State Ethics Commission.

McConnell suggested that since the Carolinians for Reform accepted public money they are now subject to the Freedom of Information Act, which will allow people to learn more about it.

And Knotts says that, before he is finished, people will know a lot more about why that conference money got funneled to a group with ties to Sanford.

"Many, many serous questions remain," he said.

Reach Brian Hicks at 937-5561 or bhicks@postandcourier.com. Reach Yvonne M. Wenger at (803) 799-9051 or ywenger@postandcourier.com.