Lawmakers weigh changes
Some want to revamp disclosure laws, grants program following controversial Sanford action
Gov. Mark Sanford's past business ties to a nonprofit organization that received $100,000 from a governor's conference bank account has lawmakers considering changes to disclosure laws and the state's competitive grants program.
While no one has accused Sanford of anything illegal, some state lawmakers question his decision to donate the conference money to Carolinians for Reform Inc. given his ties to the organization. Among the group's directors is a former officer in a business owned by the governor's brother, and two men who ran a political action committee that supported Sanford.
"We gave $150,000 for a governor's conference, not a political organization," said state Senate President Pro Tem Glenn McConnell. "There's nothing illegal I know of about it, but it sure is going to raise questions."
In August, the governor's office directed a nonprofit organization run out of the Charleston Area Convention Visitors Bureau to cut a check for $101,534.14 to Carolinians for Reform Inc. That money was left over from the National Governors Association conference held in Charleston in August 2006.
One of the directors of Carolinians for Reform listed in the Secretary of State's office is Frank Zanin, the former chief executive officer and financial officer of Wilson Brothers USA, a company owned in part by Sanford's brother. The governor also has invested money in the business.
Sanford press secretary Joel Sawyer said Friday that Zanin has not been employed by Wilson Brothers for several years.
"There is no business relationship," Sawyer said. "There's not a bit of self- interest in anything here. You have to look at the context."
Sawyer said political opponents of
Sanford are the only ones making an issue of this. This week, Sen. Jake E. Knotts, a Midlands Republican, held a press conference asking for answers about the governor's transfer of this money. Sawyer pointed out that Knotts, although a Republican, supported Democratic Sen. Tommy Moore's 2006 campaign against Sanford.
Knotts admits to a difference of political opinion with Sanford and said he believes the governor's supporters have spread rumors to hurt him politically — something Sanford denies. But Knotts said that doesn't mean this isn't a legitimate issue.
"I just know there are some very close ties, and some questions need to be asked," Knotts said. "This is not just some group of people out of the clear blue sky."
Pieces of the story have come out over the past week, followed by rounds of sniping between the Legislature and governor's office. Here's what happened:
After Hurricane Katrina caused conference organizers to scrap plans to hold the 2006 National Governors Association conference on the Mississippi coast, Charleston was considered as an alternate site. The state Competitive Grants Review Board gave $150,000 to help pay for the conference, and Sanford raised more than $1 million to go along with that.
After the conference was over, about $100,000 of that money remained unspent. Lawmakers have asked how the governor had the authority to give that money away instead of returning it to state coffers. Sawyer said Friday that the Charleston Heritage Foundation, the nonprofit organization set up to handle money for the conference, offered Sanford the option of what to do with the money since he had raised much of it. That nonprofit operated in concert with the Charleston Area Convention Visitors Bureau.
Sanford asked the Heritage Foundation to give the money to Carolinians for Reform, according to Sawyer.
Besides Zanin, the directors of Carolinians for Reform include attorney James Kuyk and Tim Reese of Sullivan's Island. Kuyk and Reese were listed on documents in the Secretary of State's office as members of the political action committee Carolinians for Change, which made Sanford an honorary co-chairman, according to its state filing.
Sawyer said those connections don't constitute a conspiracy, just common sense. It is only natural that the governor would believe the best use of the money would go to an organization that wants to educate people about the very kind of reform that he pushes for in state government, he said.
"It is a like-minded group that shares his ideas," Sawyer said. "It's about making South Carolina a better place."
When some senators made a stink about the move earlier this week, Sanford asked Carolinians for Reform to return the money. Sawyer said the group agreed and is in the process of giving the money back.
Knotts said the visitors bureau did nothing wrong, and even requested that any order to move the money be made in writing. Helen Hill, executive director of the visitors bureau, did not return phone calls Friday.
The governor's office said this scrutiny is ironic because the National Governors Association conference is the only nonprofit of more than 400 to receive money from the competitive grants program to return money.
Sanford has been critical of the competitive grants program, calling it a slush fund for legislators to curry favor in their districts. He has vetoed the program twice, but the Legislature has overridden those vetoes. Sawyer said the motives in this attack on Sanford are clear.
"These people make no secret of their political bias against the governor," Sawyer said. "He's been one of the most vocal critics of the grants. On the other side of the coin, they have not applied this scrutiny to any of the other grants."
That, McConnell said, is not the issue. He said when the state gives a grant for one purpose, there is no room for interpretation.
"In every case, that money is given for one thing," McConnell said. "If they want to use it for something else, they have to reapply. I strongly suspect there will be hearings. We may need to beef up our disclosure laws."
Jimmy Bailey, chairman of the Competitive Grants Review Board, said that before this issue came to light, four or five other grant recipients had asked to use the money in ways other than the original purpose. All were turned down.
"All these little counties know you have to ask to do that," Bailey said. "Why didn't the governor's office?"
Bailey said the application process for grants might have to be changed to underscore the fact that money can only be used for the approved purpose. Right now, any agency that gets money has to send an accounting of their expenses to the review board.
The National Governors Association complied with that law, sending an accounting in April that said the grant money had been spent. The governor's office said that the public money had been spent, and that what was leftover was private. But McConnell said when public and private money is mingled, it all becomes public.
For that reason, Knotts is going to make a Freedom of Information request for the books of Carolinians for Reform. If he gets no response, he will ask for Senate hearings.
Sawyer said Carolinians for Reform is not a political organization and has not expended any of the money in question — or any money period.
But lawmakers say that is not going to be answer enough for them.
E-mail this story
Printer-friendly version
Comments
Beachbumwannabe (anonymous) says...
The US Justice Department says that nonprofits are one of the best ways to launder cash because of the secretive nature of their activities:Interpol agrees. The UN agrees:
This affair is the beginning of the next "Lost Trust". Lobbyist and politicians all over this state are terrified that investigations will begin on this secret and dark world of non-profits being used as conduits to move LARGE sums of money around for personal and political benefit.
The rich, the powerful and the out of state business interests that contribute to the "heritage" of South Carolina, and the "education" of its people do not do so for kicks and giggles:they do so for economic gain, power or fame.
The average South Carolinian cannot afford to give much money, and when they do it is regulated by the state. With these cash cow nonprofits the rich and powerful can give unlimited amounts of cash which can then be spent in unregulated ways. This system is PERFECT for corruption:and Mark Sanford and Joel Sawyer have taken these groups to a new height.
I pray that the FOI request is issued to not only Carolinians for Reform but to the Charleston Heritage Foundation as well. Mark Sanford says he is for transparency:let's see if he is true to his word.
November 17, 2007 at 8:15 a.m. ( permalink | suggest removal )
Pols101 (anonymous) says...
Yes, and you know that the Chief of SLED just retired because of these "wise guys".
November 17, 2007 at 8:33 a.m. ( permalink | suggest removal )
misfit (anonymous) says...
I wish I knew more about this. I think this is where the "knowledge barrier" kicks in.
November 17, 2007 at 10:18 a.m. ( permalink | suggest removal )
Beachbumwannabe (anonymous) says...
Transparency is the key. When one raises money that is co-mingled with public money, or is being spent in the public arena...it should be totally transparent.
Joel Sawyer and Mark Sanford are at the forefront of using "nonprofits" in a private manner to bolster their aspirations:whether private or public. These types of shadow groups have been the subject of congressional hearings and much debate:but as with all of these things, only the rich and powerful have a say. And it is the rich and powerful that are turning these nonprofits into cash cows.
If there is nothing to hide, then disclose everything. Be proud of your efforts, and trumpet what you are attempting to so. BUT: if the murky world of big money is embarrassing to you:then of course you should continue to hide behind the skirt of an IRS regulation or some other tangential reason for not coming clean with the public.
Please remember, big out of state money flows to those that have power and can use that power in a manner that big money appreciates. Only the truth will allow us to see what our government is doing. Joel Sawyer and Mark Sanford should answer these questions, and be truthful with the citizens of SC.
November 17, 2007 at 10:46 a.m. ( permalink | suggest removal )
truthseeker (anonymous) says...
Governor Sanford is a hypocrite and, of course, so is Senator McConnell. McConnell did not want to release all his documents about the Hunley submarine - but finally had to.
None of these politicians are looking after our interests.
They are more concerned about how much of our money they can give to their buddies and not get caught.
Why do we pay a South Carolina state income tax rate so much higher than other States? What do we get back for this tax?
It seems to me like we pay more and get less.
If Gov. Sanford was the person he pretended to be when he was running for office, he would hold a press conference and
fully disclose everything about the non -profit.
If he wants to change our state for the better, he should have led by example.
Let's throw all the bums out next election and start over.
November 17, 2007 at 10:56 a.m. ( permalink | suggest removal )
misfit (anonymous) says...
Actually our income tax rates don't appear that high to me. According to a chart I found at www.taxadmin.org, our income tax percentage rates look pretty normal. Except that you'll notice our income brackets are between $2570 and $12850. I could be reading it wrong, but doesn't that mean that someone who makes $300,000 pays the same percentage as someone who makes $12850? Could it be that this state really puts more of the burden on the middle and lower class than many other states?
November 17, 2007 at 12:38 p.m. ( permalink | suggest removal )
BillytheKid (anonymous) says...
They are all crooks, get rid of everyone!
November 17, 2007 at 12:44 p.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
The problem is the state doling out tax dollars to charities to begin with. Ditto for local government. Charleston County members get their own slush funds to give to the charity of their choice. Tax dollars should be spent on nothing but government, and then only for needs. We're shoveling state tax dollars into a bean museum, the okra strut, the grits festival, a sidewalk for bikers in Charleston.
As far as income taxes, there are 6 brackets in this state, the person who makes $2570 would pay (without exemptions) a grand total of $62...but why should someone who makes more pay a higher percentage? They pay more in dollars by virtue of the fact that they make more money. And why should someone get to pay less than their share for the cost of government just because of how much they make? Someone who makes $2,570 gets far more for their piddling $62 contribution to the cost of state government than someone making $300,000 gets for their $20,627. For $62 they get the state portion of their welfare, housing, medicaide, schooling, not to mention police, firefighting, recreation, etc... I'd say considering what they get for their $62 they get the better return on their income tax dollars.
November 18, 2007 at 10:33 a.m. ( permalink | suggest removal )
misfit (anonymous) says...
I'm simply pointing out that the middle and lower class people pay a larger percentage of the burden in SC than in many other states.
I remember when I was in the military stationed elswhere, my home state of SC taxed the heck out of my pittance. I had buddies from other states who paid little or nothing. How is that right? I did not cost SC anything at all.
I believe this state continually shifts more and more of the burden to the people doing the work, while further and further giving breaks to people who are living off of past good fortune.
November 18, 2007 at 1:21 p.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
That's incorrect misfit. First I don't exactly know what you mean by lower class...I didn't think we had classes in America. If you mean low income earners they don't generally pay anyway, thanks to exemptions.
I'm also not sure what you mean by people doing the work. I take it you think high earners paying high taxes don't work for a living. Apparently companies are shoveling money into peoples bank accounts for not doing a darned thing. I'll take one of those jobs.
As far as I'm concerned if someone is receiving thousands in state benefits from tax dollars, asking them to pitch in a couple of bucks is only fair. One of the problems with our tax code is that half pay nothing, so when socialists like hillary say lets raise taxes they love it...they don't pay any anyway....that's exactly why the constitution said if anyone is taxed then everyone has to be taxed at the same percentage. That's something our government conveniently overlooks. When people don't pay for their share of government they tend to vote for people who will tax someone else. It's 3 wolves and a sheep deciding what's for dinner.
If everyone had to pay the same percent of their income, their share of the cost of government, government might not be able to tax us to build things like the teapot museum in NC, the cowgirl museum in OK, the bean museum in SC, the tropical biosphere in Iowa...we might be spending transportation dollars on fixing bridges instead of building nature walks in Minnesota. If folks in Smoaks, where I live, had to pay their share of government maybe we wouldn't be spending federal tax dollars for the grammy award ceremony, and maybe we'd be able to stop our senators from letting other states eat our bacon while we're proud of them for bringing home chitlins.
If there is going to be a tax on income to run the government, state or federal, every income earner should pay the same proportion of their income to fund the government so they at least have some vested interest in keeping the cost of government down. As long as people get a free ride they don't give a rats ass how high taxes are, or what tax funds are spent on.
November 18, 2007 at 4:14 p.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
Oh, and I guess by "living off past good fortune" you mean people who managed to aquire enough wealth to live off of capital gains (savings) were just "lucky." Those people generally made very good choices. Their savings are the money that business, the people who provide the "unlucky" folks who work for a paycheck, with jobs. If they didn't save their money for business to borrow jobs would sure be hard to come by. I guess you think they should just loan that hard earned income (or lucky income by your count) at no interest just because it's the touchy feely thing to do.
If you feel that way, pull the money out of all of your savings and just give it away and hope it comes back, no interest of course.
You have as solid an understanding of economics as you do of quantum physics...unfortunately that's the state of understanding of the majority of voters...they think there is some magic income number at which you quit working for a living and start being a fortunate rich bastard with no right to your earnings, and not only should the rich bastards should pay for everyones government, they should get less say in what government does.
November 18, 2007 at 4:24 p.m. ( permalink | suggest removal )
misfit (anonymous) says...
Yes. They are lucky. Either lucky to have come from a rich family, or lucky to have gotten away with taking advantage of others, or just lucky to have not had a health issue ruin their life. Most of the rich people that I personally know come from wealthy families. They grew up in a posh home, went to private school, then went to college free, then they went to work for their uncle's business, and their cousins go to work for their parents business. They have never known what it means to ride a city bus to work. They've never crawled under a car. They've never laid shingles. They've never washed someone elses dishes, or prepared their food. They've never cleaned bilges on a ship. They've never worked in the heat for 12 hours a day 6 days a week. They did not have to choose their college based on price. They've never had to forgo seeing a doctor due to lack of insurance. They've never lived in a house trailor. They've never had to save up their own downpayment for a home.
We do have classes here, what la la land are you in? Here, it takes money to make money. It is set up that way. Yes. There are rich people who did not have rich parents, but I believe they are the exception to the rule.
And I still believe we are shifting as much burden as possible to the worker. Lowering income taxes and raising sales tax is a tax increase for the guy who doesn't pay any income tax. Lowering property taxes and raising sales tax is a tax increase for anyone who doesn't own property. I am not saying workers pay more than their share, but you can't tell me that these tax policies don't shift more burden to the workers than they had before.
November 18, 2007 at 5:43 p.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
Tell Oprah Winfrey or Bill Gates that they were just lucky...or Condi Rice, or Colin Powell...Rockefeller started out rowing people across the Hudson as a ferry and grew to one of the wealthiest men in America...How about Bill Clinton...priveledge child of an auto dealer? Warren Buffett sold newspapers as a young man. Sam Walton grew up in the depression. Steven Ballmers father was a manager in Detroit. Lawrence Ellison was raised by his great aunt and uncle in very modest conditions in Chicago. James Middleton Cox was born on a farm. John Kluge worked assembly lines. Michael Dells father was an orthodontist. George Soros ran from the Nazis with nothing.
This country has more rags to riches people on the fortune 500 than any other nation in the world. Some inherited, but most weren't lucky, they started with little or nothing and earned their money the hard way. You've got a lot of chutzpa to disparage people just because they worked their butts off and got wealthy doing it. I grew up picking tomatoes and chunking fields, but I managed to make almost $70K last year. Guess I was just lucky.
November 19, 2007 at 9:58 a.m. ( permalink | suggest removal )
misfit (anonymous) says...
One would be foolish to think none of those people got a lucky break somewhere.
November 19, 2007 at 5:05 p.m. ( permalink | suggest removal )
misfit (anonymous) says...
Or took advantage of people, and got away with it.
November 20, 2007 at 10 a.m. ( permalink | suggest removal )
Postandcourier.com is pleased to offer readers the enhanced ability to comment on stories. We expect our readers to engage in lively, yet civil discourse. Postandcourier.com does not edit user submitted statements and we cannot promise that readers will not occasionally find offensive or inaccurate comments posted in the comments area. Responsibility for the statements posted lies with the person submitting the comment, not postandcourier.com. If you find a comment that is objectionable, please click "report abuse" and we will review it for possible removal. Please be reminded, however, that in accordance with our Terms of Use and federal law, we are under no obligation to remove any third party comments posted on our website.
Users can now build user-to-user connections, follow friends' recent posts, add an avatar that fits their personality, and more. If you have posted here before you'll need to sign up again, or if you've never posted before, start now by signing up!
Full terms and conditions can be read here.