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Income disclosure mandate in S.C. must be stronger

Income disclosure mandate in S.C. must be stronger

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THE ISSUE: Ethics laws on reporting finances

OUR OPINION: S.C. lawmakers need requirements as stringent as other states

Despite gubernatorial pressure through no less than a special commission proposing changes in South Carolina ethics laws with regard to elected officials, plus special legislative committees looking into reforms, 2013 will end without changes being made, pushing the issue into an election year and even more uncertain prospects.

The legislative time clock played a role in seeing proposed reforms put on hold. The governor and Republicans blamed Democrats for the delays even as Democrats said they were being unfairly targeted in wanting to debate changes that were sent to senators at the 11th hour by the House. Even Republican senators were not prepared to go along —and the governor and the House knew they would not be, leaving the Senate to take the rap on ethics.

A key sticking point was and will remain moving oversight of legislative ethics away from the ethics committees in both houses. The House plan that would hand over legislative ethics to a committee split evenly between representatives and members of the public faces constitutional issues. The Senate is not clear on where it plans to land on the matter, though aware that popular opinion will never side with lawmakers policing themselves.

Yet reality is that getting lawmakers to vote away their power, particularly with the constitution specifically giving them sole right to “punish” lawmakers, will be difficult.

What should not be so difficult is getting reform in reporting of financial interests by lawmakers and public officials. How elected officials make their money is a matter of disclosure that goes with the position. In South Carolina, however, that is only partly the case.

State lawmakers are required to report the income they make from government sources. What they make from private sources — including companies or industries that reap direct benefits from the bills they sponsor and promote — is not public knowledge.

The House version of ethics reform that awaits consideration by the Senate in January would tighten those rules but still not go far enough.

The conservative South Carolina Policy Council, through its communications manager Barton Swaim, is making the case for change by pointing out that the law makes it possible for lawmakers to benefit financially from their votes and the public never know it.

“That wouldn’t happen outside South Carolina. Granted, officials in other states find ways to get around disclosure laws, and some of those laws are weak. Still, South Carolina’s laws requiring the disclosure of private income are indisputably the weakest of all — because there aren’t any,” Swaim writes.

He offers examples of disclosure laws in other Southeastern states:

n In Georgia, elected officials must disclose the name of the business from which they receive income if they own 5 percent of the firm or more (or have $5,000 invested in it, whichever is lowest).

n In North Carolina, disclosure is required for any income more than $5,000 in the last business year. Attorneys are required to disclose fees of more than $10,000 in the last business year, and to indicate whether they earned $10,000 or more from any one of a list of 14 categories of legal representation.

n In Alabama, officials must disclose information on all employment in which they or their immediate family members spent at least a third of their working time. They must also disclose the household income of all immediate family members, with information on sources of income and on businesses in which they or their family member own at least 5 percent stock or are high-ranking employees. And they must disclose all property held by their spouses, their dependents or themselves.

n In Mississippi, officials must disclose information on businesses in which they hold positions, if their total income from those positions exceeds $2,500. Likewise they must disclose the existence of any business in which they hold “ownership” positions, or in which they hold at least $5,000 in assets or a 10 percent interest.

n In Tennessee, officials must disclose their own and their family’s income sources exceeding $1,000, and any business in which they hold at least 5 percent financial interest or more than $10,000.

n In Florida, officials are required to reveal individual sources of income if those sources are at least 5 percent of total gross income, or all income more than $2,500; business interests in which they earned at least 10 percent of their gross income, or earned at least $5,000; business in which they hold leadership positions; and property in which they hold at least a 5 percent ownership.

Though South Carolinians are not prone to being convinced to do something because other states are showing the way, Swaim and the S.C. Policy Council are on-target in their conclusion: “Nearly all of these laws could be strengthened in some fashion. Yet all are vastly superior to the absence of any laws governing the revelation of private income sources. Other states’ law codes may not prevent corruption to the degree they should. But at least they don’t actively encourage it.”

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