State Owed Millions in Ethics Fines as Penalties Pile Up Over Nondisclosure

Penalties pile up over nondisclosure

By Stephen Largen

Published: Sunday, February 20, 2011 at 3:15 a.m.
Last Modified: Sunday, February 20, 2011 at 1:14 a.m.
A large group of current and former lobbyists, political candidates, university and elected officials owe the state more than $6 million in unpaid ethics fines and late penalties — an increase of about $4 million since 2009.

They are on the S.C. Ethics Commission’s debtors list and facing the fines because they have not filed mandatory statements of financial interest or campaign disclosure forms, according to the ethics commission.

Outstanding fine amounts range from $10 to $732,400, the latter being accrued by Richard E.R. Johnson, a former member of Eastover City Council. Johnson’s fines have been piling up for more than five years and he has refused to pay, said ethics commission attorney Cathy Hazelwood.

Hazelwood said those being fined have received ample warning. The initial late filing penalty for a missing ethics form is $100, and fine recipients are sent reminders to turn in outstanding forms.

After 20 days, the ethics commission sends a certified letter to the home address of the late filer, and the fine increases by $10 per day for the first 10 days, followed by $100 for each subsequent day.

Fine recipients are given the opportunity to submit letters of appeal to the nine-member ethics commission, but if no appeal is granted and ethics fines continue to go unpaid, the ethics commission eventually will file a complaint with the clerk of court in a debtor’s home county that seeks to have a lien placed on any properties the person owns.

Additionally, at the end of each calendar year, the ethics commission sends a list of debtors to the state Department of Revenue, which can garnish debtors’ wages if they file state tax returns.

A search of several national databases for Johnson’s telephone number yielded only disconnected lines, but he told the Charleston Post and Courier in 2009 that he was disabled in a workplace accident more than a decade ago and has not been able to work since. Johnson won a council seat in 2000 and lost his seat in 2006.

Hazelwood said Johnson has not filed a state tax return for many years. She said the ethics commission has no expectation it will ever see most of the money Johnson owes.

“There’s no way Mr. Johnson is going to able to do this,” she said.

According to the commission, as of Jan. 26, there were 105 other six-figure debtors.

Spartanburg County has three residents on the commission’s list. Those individuals, followed by their positions and debt amounts, are:

Earl A. Bridges Jr., former member of the S.C. State University Board of Trustees, $1,700;

Mike E. Dixon, commissioner of the Patriots Point Development Authority, $100; and

Derrick Pierce, former lobbyist for the Spartanburg Area Chamber of Commerce, $270.

According to the ethics commission, Bridges has not filed his 2010 annual Statement of Economic Interests, Dixon was late in filing the same form, and Pierce, who Hazelwood said lobbied for the chamber in 2005, also was late in filing the form.

Most of the individuals with outstanding debts to the commission are former public officials or political candidates, but some are current sitting officials.

They include:

Jonathan N. Pinson, chairman of the S.C. State University Board of Trustees, $100;

Joyce A. Blackwell, vice president of academic affairs at S.C. State University, $2,200;

Patricia H. McAbee, member of the Clemson University Board of Trustees, $100; and

Timothy F. Norwood Sr., member of the Francis Marion University Board of Trustees, $1,700.

Hazelwood said the money the ethics commission receives from fines is used for purposes including rent, supplies and computer contracts — everything except personnel costs.

Room for reform?
Since a law capping late-filing fines for a single form at $500 was lifted in 2003, legislators have attempted to reform the commission’s fine system.

In each instance, the cap-reinstating legislation passed only one chamber of the General Assembly or was vetoed by former Gov. Mark Sanford.

Legislators will have another opportunity to rein in fine amounts in the current session.

House Bill 3183, which would limit late-filing fines to $5,000 per form, was prefiled in December and has been referred to the House Judiciary Committee.

The bill also proposes that first and second late-filing offenses may be tried in magistrates court after the maximum fine has been levied, with the possibility of jail time upon conviction.

According to the legislation, should an offender reach the maximum fine amount, he or she would be guilty of a misdemeanor triable in magistrate court for a first offense, and upon conviction would be fined up to $500 or receive up to 30 days in jail.

Subsequent offenses would combine misdemeanor guilt with harsher penalties.

For a second offense, an offender would be fined between $2,500 and $5,000 or receive no less than 30 days in jail.

For a third or subsequent offense, an offender would be fined up to $5,000 or jailed for up to one year, or both.

State Rep. Tom Young, R-Aiken, introduced the bill and said it was drafted by the ethics commission.

“I do think the cap would improve the collection rates,” Hazelwood said in an e-mail message. “Certainly a late-filing penalty could be large if you needed to file multiple forms, but it couldn’t be $750,000 large. We have wanted a cap since the law changed in 2003.”

John Crangle, executive director of the watchdog group Common Cause of South Carolina, said a cap on fine amounts is a good start. He also said there should be other mechanisms put in place to help the ethics commission collect on fines such as the filing of lawsuits, turning over the fines to a collection agency or allowing offenders to negotiate a debt settlement with the commission.

“I don’t see the kind of aggressive debt collection that’s needed,” he said. “The ethics commission is terribly under-resourced. Certainly they could use the money because they need to expand their staff.”

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