Vol. 3, No. 4, Pg. 24. South Carolina's New Ethics Law.

• Author: By Edward E. Poliakoff and David H. Wilkins

South Carolina Lawyer

1992.

Vol. 3, No. 4, Pg. 24.

South Carolina's New Ethics Law

24South Carolina's New Ethics LawBy Edward E. Poliakoff and David H. WilkinsThe Ethics, Governmental Accountability and Campaign Reform Act of 1991 (the "Act") effective January 1, 1992 for transactions after December 31, 1991, will directly affect South Carolina Bar members and many of their clients. This article will discuss new definitions, disclosure requirements and prohibitions applicable to lobbyists and lobbyist's principals, as well as to state officials and state employees. Ethical rules of conduct, disclosure requirements and campaign finance reforms applicable to officials and employees of the state and its political subdivisions will also be considered.

The Act spreads enforcement and interpretive authority among the following agencies: Secretary of State, State Attorney General, State Ethics Commission, House Ethics Committee, Senate Ethics Committee and State Election Commission. As this article went to press, both the Secretary of State and the State Ethics Commission had begun the process of issuing advisory letters or opinions interpreting the Act. Interested lawyers should closely monitor those advisories.

Who Is a Lobbyist?

A "lobbyist" is defined as any person who is employed, with or without compensation, to influence by direct communication with state elected or appointed officials or state employees the act or vote of any legislator or statewide constitutional officer concerning any legislation, the vote of any state agency, board or commission official concerning regulations, or the act of the governor or the governor's executive staff concerning vetoes, executive orders, appointments or grants. Section 2-17-10(13).

The most important change in the definition of lobbyist, and one that could impact a number of lawyers, is the inclusion of persons who communicate with state agencies about regulations.

There are several exemptions to the definition of lobbyist that are similar to prior exemptions--e.g., a person who receives no compensation for lobbying and expresses a personal opinion and a person who appears only before public legislative committee and subcommittee sessions and public hearings of state agencies.

A significant new exemption covers a person who receives no compensation to engage in lobbying and does not make expenditures or incur obligations for lobbying in excess of $500 in a calendar year. With respect to compensated persons, perhaps this means a person whose job description, retention letter or contract does not include lobbying may engage in occasional lobbying activities without having to register as a lobbyist, if he or she does not exceed the expenditure threshold. But it is unclear how a compensated person who regularly lobbies for the position of his or her employer or client can be exempted on the basis that he or she "receives no compensation to engage in lobbying."

Who or What Is a Lobbyist's Principal?

The Act introduces a new classification, "lobbyist's principal," defined in Section 2-17-10(14) as the individual, organization or group on whose behalf and for whose benefit the lobbyist engages in lobbying and who directly employs or retains the lobbyist. A person who belongs to or works for an organization that employs a lobbyist is expressly not a 'lobbyist's principal."

Registration, Record Retention and Disclosure by Lobbyists

Within 15 days of being employed as a lobbyist, a person must register with the Secretary of State ("SOS") on the SOS form and pay a $50 fee. (The Act retains the SOS jurisdiction over lobbyists and lobbying until July 1, 1993, when the jurisdiction transfers to the State Ethics Commission.)

Each lobbyist is required by Section 2-17-20(F) to maintain for four years records--which must be available to the SOS for inspection--containing the following information:

* identification of each person from whom income "attributable to the lobbyist's lobbying" is paid or promised and the amount of such income;

* expenditures of the...