Ethics Commission and the Ethics Act: Law, Procedure, and

Ethics Commission and the Ethics Act:

Law, Procedure, and Enforcement

MICHAEL R. BURCHSTEAD

T: 803.753.3261

Ethics Act of 1991

Subject Matter

• Rules of Conduct, S.C. Code Ann. § 8 - 13 - 70 0 , e t . s e q.

• Cam paign Pract ice s , S.C. Cod e Ann . § 8 - 13 - 130 0, e t . s e q.

• Financial Disclosure, S.C. Code Ann. 8- 13 - 110 0 , e t . s e q.

• Lobbyists and Lobbying, S.C. Code Ann. § 2- 17 - 10, e t . s e q .

Ethics Act of 1991

Enforcement Entities

• House Ethics Committee

• House members, candidates, staff.

• Senate Ethics Committee

• Senate members, candidates, staff.

• S.C. St a t e Et h ic s Com m is s ion

• Basically everyone else.

What does the S.C. State Ethics Commission do?

• Investigate and “prosecute” allegations of Ethics Act violations.

• Work with the Attorney General, SLED, or other local prosecutors or law

enforcement on criminal Ethics Act matters.

• Provide advisory opinions to affected people on compliance with the Ethics Act.

• Education on Ethics Act compliance.

• Help people file reports and the like.

Act 282 of 2016

Th e Et h ic s Com m is s io n is re c o n s it u t e d

• 9 members to 8

• No holding over in office

• General Assembly appointment power for the first time

• New enforcement process for Members of the General Assembly

• Le gis la t ive Et h ic s Co m m it t e e s re t a in s ole a u t h o rit y t o d is c ip lin e Me m b e rs of

the General Assembly.

• Ethics Commission can only recommend probable cause.

• Et h ic s Co m m is s io n m u s t a p p ly Le gis la t ive Et h ic s Co m m it t e e a d vis ory

op in io n s .

• Supermajority of 6 required for probable cause (applies to everyone).

Et h ic s Co m m is s io n Re gu la t io n s

• Regulations last promulgated June 27, 1997.

• Act 282 of 2016 reconstituting the Ethics Commission and provided for no

holdover appointments at least arguably rendered all Ethics Commission

regulations null and void.

• 1980 S.C. Op. Attorney Gen. 105 (1980)

• “Th e enactment of Bill No. H. 3529 would bring about the repeal of the statutory

authority…for the Da iry Commission's e xis t in g regulations and t h e ir enforcement,

the enactment in t o law of t h is b ill would effectively repeal t his body of

re gulations .”

J u ris d ic t io n o f Circ u it Co u rt s in Civil Ma t t e rs

Raine y v. Haley, 404 S.C. 320, 325, 745 S.E.2d 81, 84 (20 13)

• Citizen cannot allege Ethics Act violations against the Governor in circuit court because, with limited

exceptions, exclusive authority over Ethics Act complaints lies with the relevant enforcement agency.

• Exc e p t ion: a c t io n fo r in ju n c t ive re lie f t o e n join c a m p a ign fin a n c e vio la t io n s c ou ld b e file d in t h e c irc u it

court within the 50- day window before the election.

Harpootlian v. SC Senate Republican Caucus, C/A, 2018CP4005370.

• During the 50- day window, Senate candidate filed action against the Senate Republican Caucus to

enjoin alleged violations of the Ethics Act.

• Candidate tried to further pursue action after the election and circuit court judge ordered the caucus

t o p rovide cert ain dis cove ry.

• The Supreme Court eventually granted a Writ of Prohibition, prohibiting the circuit court from

exercising further jurisdiction because the 50- day window was no longer applicable and candidate

had to go through the usual Ethics Commission complaint process.

Due Process Issues

In d ivid u a l Co m p la in t s

• S.C. Code Ann. § 8 - 13 - 320 provides that the State Ethics Commission has

these duties and powers: (10) to conduct its investigations, inquiries, and

hearings in this manner:

• The commission shall accept from an individual, whether personally or on behalf

of an organization or governmental body, a verified complaint, in writing, that

states the name of a person alleged to have committed a violation of this chapter

and the particulars of the violation. The commission shall forward a copy of the

complaint, a general statement of the applicable law with respect to the

complaint, and a statement explaining the due process rights of the respondent

including, but not limited to, the right to counsel to the respondent within ten

days of the filing of the complaint.

Co n fid e n t ia lit y o f c o m p la in t s

S.C. Code Ann. § 8 - 13 - 320 provides that the State Ethics Commission has

these duties and powers:

• (10) to conduct its investigations, inquiries, and hearings in this manner:

• (g) All investigations, inquiries, hearings, and accompanying documents are

confidential and only may be released pursuant to this section.

SEC Ad vis ory Op in io n AO20 22- 001 (March 21, 2022)

• Se c t io n 8 - 13 - 3 20 (10 )(g) “lim it s on ly w h a t in fo rm a t ion t h e Co m m is s ion it s e lf

may disclose and at what stage in the complaint process such disclosure

may occur. The plan language of the statute does not implicate a private

citizen’s speech, but rather applies only to the Commission.”

Rules of Conduct

Use of Position to Affect Economic Interest

Se c t io n 8 - 13 - 700(A)

• “No public official, public member, or public employee may knowingly use

his official office, membership, or employment to obtain an economic

in t e re s t fo r h im s e lf, a fa m ily m e m b e r, a n in d ivid u a l w it h w h o m h e is

associated, or a business with which he is associated.”

• Exception for incidental use not resulting in additional public expense.

Use of Position to Affect Economic Interest

Se c t io n 8 - 13 - 700(B)

• “No public official, public member, or public employee may make,

p a rt ic ip a t e in m a kin g, o r in a n y w a y a t t e m p t t o u s e h is o ffic e , m e m b e rs h ip ,

or employment to influence a governmental decision in which he, a family

member, an individual with whom he is associated, or a business with which

he is associated has an economic interest.”

• 8 - 13 - 700(B) recognizes that conflicts happen from time to time, but

requires recusal.

Rules of Conduct - De fin it io n s

“Ec o n o m ic in t e re s t ” (Se c t io n 8 - 13 - 10 0 ( 11) )

• Interest distinct from that of the general public.

• Large class exception. If the only economic interest realized is that which

would be realized as a member of a “profession, occupation, or large class,”

then the public official, public member, or public employee may participate in

t h e d e c is io n .

“Family member” (Section 8- 13 - 10 0 ( 15 ) )

• Includes a member of the person’s immediate family, also: spouse, parent,

brot he r, s is t e r, child, m ot he r- in - law, father- in - la w, s on- in - law, daughter- in - law,

brother- in - law, sister- in - law, grandparent, or grandchild.

• Amended in 2011 to include in- laws .

Rules of Conduct - De fin it io n s (c o n t in u e d )

“In d ivid u a l w it h w h o m h e is a s s oc ia t e d .” (Se c t io n 8 - 13 - 10 0 ( 2 1) )

• “Individual with whom the person or a member of his immediate family mutually

has an interest in any business of which the person or a member of his

immediate family is a director, officer, owner, employee, compensated agent, or

holder of stock worth one hundred thousand dollars or more at fair market value

and which constitutes five percent or more of the total outstanding stock of any

class.”

“Business with which he is associated.” Section 8- 13 - 100(4)

• “Bu s in e s s of w h ic h t h e p e rs o n or a m e m b e r of h is im m e d ia t e fa m ily is a d ire c t o r,

an officer, owner, employee, a compensated agent, or holder of stock worth one

hundred thousand dollars or more at fair market value and which constitutes five

percent or more of the total outstanding stock of any class.”

• If you or your spouse is employed by a company, that is a business with which

you are associated.

• “Governmental entity” not a business.

Recusal provision of 700(B)

Se c t io n 8 - 13 - 700(B)(cont inue d )

• A public official, public member, or public employee who, in the discharge of his

offic ia l re s p o n s ib ilit ie s , is re q u ire d t o t a ke a n a c t io n o r m a ke a d e c is ion w h ic h

affects an economic interest of himself, a family member, an individual with

whom he is associated, or a business with which he is associated shall:

• prepare a written statement describing the matter requiring action or decisions and the nature

of his potential conflict of interest with respect to the action or decision;

• if he is a public employee, he shall furnish a copy of the statement to his superior, if any, who

shall assign the matter to another employee who does not have a potential conflict of interest.

If he has no immediate superior, he shall take the action prescribed by the State Ethics

Com m is s ion;

• if he is a public official, other than a member of the General Assembly, he shall furnish a copy

of the statement to the presiding officer of the governing body of an agency, commission,

board, or of a county, municipality, or a political subdivision thereof, on which he serves, who

shall cause the statement to be printed in the minutes and require that the member be excused

from any votes, deliberations, and other actions on the matter on which the potential conflict

of interest exists and shall cause the disqualification and the reasons for it to be noted in the

minutes;

Prohibition on representation

“Se ct ion 8 - 13 - 700(B)(cont inued)

• "A public official, public member, or public employee who, in the discharge of his