Friday, Nov. 27, 2009

S.C. can't regulate GOP's legal defense fund

COLUMBIA -- State ethics laws have no rules regulating a state Republican plan to create a legal defense fund for election, ballot and candidate court issues. That means the public won't know who is donating money to candidates, and there are no limits on how much money can be contributed to the fund.

S.C. Republican Party Chairwoman Karen Floyd announced in September the party would begin collecting donations for a legal defense fund, a response, in part, to a libel lawsuit filed on behalf of Spartanburg Rep. Rita Allison. An anonymous mail piece sent to voters in Allison's district alleged Allison had an affair with Gov. Mark Sanford, for whom she worked as an adviser and legislative liaison.

But the GOP legal fund could raise issues under state ethics law, which requires candidates and public officials disclose anything of value.

"There's certainly nothing in the Ethics Act about legal defense funds," said Cathy Hazelwood, counsel for the State Ethics Commission, which interprets state ethics laws andprovides candidates with guidance, by e-mail. "The question to my mind is whether the party is making an in-kind contribution to the candidate by providing money to them. I think the commission would need to weigh on this."

Such legal funds have raised issues in other states, including New York, where lawmakers have proposed bills imposing contribution limits and requiring full disclosure of donors. Members of Congress are allowed legal defense funds, but the contributions are capped and must be disclosed.

Floyd recognized the legal gray area, but said the S.C. GOP would collect and spend legal donations through its operating account. Under state and federal law, the party must report all donations and expenses from its operating account quarterly. The party has also recruited attorneys to donate their time on legal issues, which Floyd said would be reported as in-kind contribution.

Floyd said the party intended the fund to be a straight-up proposition.

But, she said, it's the job of the state party to support candidates, which includes ensuring voting laws are enforced, making sure all legal votes are counted and backing up a candidate attacked anonymously.

"The party chairman has a responsibility to elect great Republicans," Floyd said. "If individuals are not seeking office because of the warfare, perhaps a legal trust fund can give a signal: 'We're there for you.'"