Sumter County benefited most from $44 million in ‘hidden’ funds in S.C. budget | #schoolshooting

BY ANDREW CAPLAN
The State

Sumter County benefited more than any other S.C. county from secret earmarks tucked inside last year’s state budget.

Unbeknownst to the vast majority of state taxpayers and even most lawmakers who approved the budget, at least $7.3 million quietly flowed to the Midlands county, population 106,000.

Among the projects paid for by state taxpayers: $2 million for a tennis center, $3 million for a health clinic, $1 million to improve its local parks, $400,000 for a new shooting range for a city police department and $100,000 to upgrade a sewer system, according to a review by The State Media Co.

How did little Sumter County pull off such a big haul?

Its representatives include Rep. Murrell Smith, R-Sumter, a 19-year state House veteran and one of the most powerful members of the General Assembly, say state House insiders. As chairman of the House’s Ways and Means Committee, Smith has an oversized say in which earmark requests, made by his fellow House members, get approved.



It is just one piece of South Carolina’s hidden earmark problem. Last fiscal year, at least $43.8 million was doled out by state lawmakers to pay for pet projects, using a flawed earmark system cloaked in secrecy, lacking in accountability and based on political influence, according to a three-month investigation by the newspaper.

The money is often awarded based on which lawmaker makes the request, according to state House insiders, rather than the merits of the projects.

Case in point: Florence County, home to the powerful Senate Finance Chairman Hugh Leatherman, who controls the Senate’s budget process, received $2.5 million in earmarks last fiscal year, according to the paper’s review. Only three of the state’s 46 counties received more.

FOLLOWING THE MONEY IS TRICKY

Good luck trying to follow the money to make sure it was spent accordingly. Hidden earmarks are generally bundled into various state departments’ budgets under vague titles such as “sports marketing” and “medical contracts,” making it difficult to pinpoint what the money is actually paying for.

The agencies then pass the earmarked dollars along to those involved with the pet projects with few strings attached. Agencies require different documentation from earmark recipients. For example, many only require a brief statement on how the money was spent – no receipts or other proof is required, according to the paper’s investigation.

The system creates clear winners and losers. Some counties benefit handsomely while others are left out. Last year, some of the state’s poorest counties – Allendale, Lee and others in the so-called Corridor of Shame – didn’t receive a penny in hidden earmarks, according to the paper’s review.

“If (state House leaders) give us something, it’s always one little something at the bottom of the barrel,” said Rep. Lonnie Hosey, D-Barnwell, whose district includes Allendale County, one of eight counties that received no hidden earmarks. “It’s never anything significant that helps (our area) grow or be part of this great state. Top leadership makes all the decisions.”



State taxpayers are also losers, intentionally kept in the dark as lawmakers strike quid pro quo deals in state House hallways and on the floor, sometimes sealed with just a handshake, according to political observers. No votes take place on the House or Senate floors to determine individual projects’ merits, no line items are included in the state budget to show who receives the money, and no public list of all the earmarks exists.

“There’s really no rules,” said Scott English, former chief of staff to Gov. Mark Sanford, who railed against the earmark process, ultimately to no avail. “And as a result of that, there’s no transparency. And I think that’s the biggest danger in all of this.”

The system is poised to improve following recent reporting by The State Media Co. that exposed the inner workings of the hidden earmark system and shed light on a lack of accountability after a Richland County senator received money.

Since then, Sens. Dick Harpootlian, Wes Climer and Majority Leader Shane Massey, R-Edgefield, introduced a rule change that, if approved, would require senators to disclose hidden earmarks and give an explanation of each project paid for by an earmark, the dollar amount requested and the amount received.

Additional improvements are also in the works, spearheaded by Harpootlian, D-Richland, and a handful of other lawmakers on both sides of the political aisle.

“Zero out of (the state’s) 170 lawmakers know what is in the budget,” said Climer, R-York.

“It’s wrong,” added Harpootlian. “Tens of millions of dollars are being spent without any transparency whatsoever.”

What’s more, South Carolina’s hidden earmark problem appears to be getting worse.



Buoyed by a budget surplus, the near $44 million in hidden earmarks is more than double the amount of the previous year, according to the newspaper. It’s also the largest amount recorded in at least the last five fiscal years.

It couldn’t be happening at a worse time as the coronavirus upends the state’s economy and decimates the surplus. Precious dollars that could benefit long-agreed-upon statewide priorities such as raising salaries for state employees, improving security at prisons and shoring up the state’s debt-saddled pension system are being unevenly scattered across the state.

“You can’t hold people accountable if you don’t have information,” said Lynn Teague, vice president of the League of Women Voters of South Carolina, who called for more equitable funding. “And if it’s so hard to get, and it takes months to assemble, that is clearly not transparent enough.”

CONTROL OF A BUDGET

Although he serves as chairman of the powerful Ways and Means Committee, Smith said he actually has little input into which projects receive earmarks, saying his committee’s staff and subcommittee members make most of the decisions.

Sumter County likely came out on top because of the aggressiveness of lobbyists employed by the city of Sumter, which received almost half of the county’s earmarks, Smith said. He also credits the experience of Sumter’s mayor, Joe McElveen, a former legislator and father of current Sen. Thomas McElveen, D-Sumter, who adeptly navigates the earmark process.

Smith says he has nothing to hide.

“I understand that there are critics who will always try to have some nefarious reasons that things occur over here in state government,” he said. “But … my job is to represent the citizens of this district and the citizens of South Carolina, and I try to do it in a forthright and honest manner.”



Still, the earmark system could be made more accountable and transparent, Smith concedes – changes he would support as he has supported previous efforts.

A bill before Smith’s committee, sponsored by Rep. Wes Newton, R-Beaufort, partly addresses the problem by requiring earmark recipients to provide more financial information. But the effort does not require proof that money is spent properly, nor does it publicly list hidden earmarks and their sponsoring lawmakers.

Lawmakers and political insiders say Smith is downplaying his role and it’s no surprise Sumter received the most money with him at the committee’s helm.

“He’s hands on,” said Rep. Jimmy Bales, D-Richland, who serves on the House Ways and Means Committee with Smith. “You’re not going to get something passed that Murrell Smith is against.”

Bales said the same is true of Smith’s Senate equivalent, Leatherman, adding that the two lawmakers are the most powerful officials in crafting the state budget and that vote trading, sometimes through use of earmarks, is common practice in the General Assembly. He said legislators, himself included, often go straight to Leatherman and Smith if they want a project funded, skipping the subcommittee process altogether.

Leatherman did not return a reporter’s calls or texts seeking comment for this story.

“The favor bank is very clear to everyone,” said Ashley Landess, president of the libertarian-leaning think tank SC Policy Council who has spent years studying the hidden earmark process. “You don’t get something in the budget if Leatherman, and I guess Murrell (Smith) … don’t want it in there.”

Projects can be pulled from the budget at any point for a number of reasons, said Rep. Mike Sottile, R-Charleston, adding that Smith and staff can do it on their own.

Even Sen. Thomas McElveen, a member of the Sumter delegation, said he typically goes to Smith and Leatherman with his district’s funding requests, adding that his delegation is well aware of projects in the pipeline.

“We stay in constant contact about this stuff,” he said. “I think that’s what we’re supposed to do. I kind of casually observe other delegations that don’t operate that way. But the Sumter delegation we’ve got a real collegial approach to what we could do to our community, and we try to stay on the same page.”

Smith, the only Republican in the Sumter delegation, acknowledges he was the force behind getting the state’s largest hidden earmark last fiscal year: $3 million for the Sumter Behavioral Health Services clinic. The single earmark is more than the total dollar amount in hidden earmarks received by any other county save Richland County. Richland received $6.4 million in total, the newspaper found.

Smith said an effort has been underway for years to increase drug treatment and prevention dollars to the counties, even winning support from both Govs. Nikki Haley and Henry McMaster. Last year’s budget just so happened to be Sumter’s turn to get a piece of the money, he said.

But once again, Sumter somehow came out on top, receiving more than the two other S.C. substance abuse clinics that received hidden earmarks, according to the paper’s investigation. A Florence County clinic and a Marion County one received just $500,000 compared to Sumter’s $3 million.

By the end of next fiscal year, Sumter County’s facility is scheduled to receive $4.5 million compared to $2.5 million for the Marion one and $500,000 for the Florence one in hidden earmarks.

THE NECESSITY OF EARMARKS

Smith and at least three other members of the Sumter County delegation don’t view hidden earmarks as a legislative evil.

Rather, they say, the carve-outs are the lifeblood for many small counties, paying for worthy local projects for law enforcement, parks and tourist attractions that local governments can’t afford.

For example, Sumter’s Palmetto Tennis Center complex will use its $2 million earmark for a new clubhouse and clay tennis courts – a prized feature not seen at most U.S. facilities. Sumter lawmakers hope the improvements will enhance the quality of life for locals and attract tourists who will boost the local economy with visits to the tennis complex. Smith and McElveen, along with Rep. David Weeks and Sen. Kevin Johnson, all sponsored the earmark.

Little counties can’t be too proud to compete for these earmarks, they add. It’s one of the only avenues to secure money in the state budget. The lion’s share is inevitably gobbled up by Charleston, Horry, Richland and other populous counties, many of them tourism hubs.

“When you’re from a county that has been without for a long time and you have a chance to make progress and do some things for your community that improves it on multiple levels, I don’t think anybody is ever going to get upset about that,” McElveen said. “At least not the folks who I represent. So I understand the criticism, but I can’t do anything but play within the rules.”

Adds Smith: “There is a natural flow of dollars (in the state budget) to the more metropolitan areas. And if somebody in the rural areas is asking for money, then they’re not going to get it. It’s incumbent upon those of us who live in those rural areas to make sure that … there is some funding to those areas.”

Weeks, D-Sumter, is also spearheading an effort in the Legislature to help bring a new city park to Manning Avenue, a historically Black neighborhood, funded in part with a $600,000 pass-through. McElveen, who is also co-sponsoring the earmark, said the funding helps a part of town “that has gone without for far too long.”

“The impact on the community is going to be tremendous because it underscores and highlights a forgotten part of our history that’s actually going to be on display,” Weeks said.

Other earmarks in the area sponsored by Weeks include $400,000 for the Sumter Police Department’s training facility and $100,000 for the nonprofit Festival on the Avenue. Weeks, who serves as an unpaid board member for the nonprofit, said the money funds an annual three-day cultural event by the same name.

There is also $500,000 going to the M.H. Newton Family Life Center to help with a successful after-school program called Helping Youth Pursue Excellence (HYPE), which offers tutoring, homework assistance and more.

But earmark critics, including Climer, say good intentions are not enough. Those who seek them, even for the most worthy of local projects, are perpetuating the problem.

“If this process were to actually be abolished, then you would actually have substantive conversations about size and scope of government, where money should actually be spent,” Climer said. “You might even have sincere oversight over agencies.”

EFFORTS UNDERWAY TO FIX EARMARK PROCESS

Last year, Harpootlian was appalled by the earmark process after he was mailed a $400,000 check to help pay for a railroad quiet zone project in Columbia.

He said he spoke with Leatherman about the project several times and was assured the money was in the budget. Those talks, however, only came after Harpootlian agreed to withdraw his objection to a bill supported by the chairman.

Still, Harpootlian said he couldn’t find the funding anywhere when he reviewed budget documents, unaware that his railroad project, along with about $43 million in other pet projects, was included as a hidden earmark. He never filled out any forms and never made a formal request.

Often, hidden earmarks, like in Harpootlian’s case, are used by powerful lawmakers to change dissenting votes, Climer said.

“This is an existential matter for the functioning of the Legislature,” he said. “It cheapens the entire political process.”

All the lawmakers who spoke with The State said they support more transparency regarding hidden earmarks and that they welcome increased reporting measures to ensure there’s no wrongdoing. Smith said some progress has been made in recent years, requiring state agencies to use contracts and deliverables.

Former Gov. Mark Sanford established a process requiring the General Assembly to submit all pass-throughs to the governor’s office for review and requiring state agencies to report hidden earmarks. State law also requires joint open meetings between the House and Senate in charge of appropriations within five days after the governor submits the budget to the General Assembly and restricts lawmakers from developing their own budget.

But none of that is followed by lawmakers. And many skeptics doubt anything will change it now.

“You’re never going to stop this behavior,” said English, Sanford’s former chief of staff. “Every attempt at stopping earmarking, both at the state level and at the federal level, has ultimately created just a different way of getting the results.”




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