Understanding Campaign Finance Reporting Requirements in South Carolina

Thinking of running for office or helping on a campaign in South Carolina? In this episode, expert Leigh McGill with Campaign Ethics Consulting Services breaks down the basics of campaign finance reporting. Learn about required disclosures, contribution limits, common pitfalls to avoid, and why it pays to get professional guidance from the start.

Links:

Connect with Leigh McGill

Campaign Ethics Consulting Services

South Carolina Ethics Commission website

Transcript

Sponsor: This episode is sponsored by Palmetto Project. Forty years ago, South Carolina leaders championed the idea that every social and economic challenge in our state could be solved through innovation. They believed in the power of new ideas to fulfill the promise of our home. Since 1984, the Palmetto Project has listened to and partnered with community leaders and members to transform our state through 330 public-private partnerships. Today, our programs address early literacy for more than 23,000 children through Dolly Parton's Imagination Library, civic engagement, and equitable access to healthcare through the only statewide nonprofit health insurance agency in the country, and more. Learn more at palmettoproject.org or at our Facebook and Instagram accounts.

Katy Smith: If we as voters want transparency in campaign finances, somehow we need a way to get that information, right? Well, that happens through campaign finance reporting with the South Carolina Ethics Commission's Public Disclosure and Accountability Reporting System. It's the electronic filing component of campaign disclosure. What is required of candidates in terms of reporting, and how can interested people like those of you listening view what is disclosed? I'm Katy Smith with Greater Good Greenville, and on this episode of Simple Civics Greenville County, we'll talk about it. We're joined by Leigh McGill with Campaign Ethics Consulting Services, who works with candidates on filing those reports. She'll cover the nuts and bolts of campaign finances and give you lots of insights. She's interviewed by Derek Lewis, Executive Director of Greenville County First Steps and Chairman of our Greater Good Greenville Board of Directors. You might want to take a listen to our last episode that takes a broader look at how political campaigns and causes are funded. By the way, if you want even more information on this topic, including how to look up this information yourself, click the link in the episode page or on our newsletter link at simplecivicsgreenvillecounty.org for periodic civics deep dives. Now on to the episode.

Derek Lewis: Leigh, thanks so much for joining us today. Can you start by telling us a little bit about your organization and kind of what you guys are responsible for?

Leigh McGill: Yes. My company is called Campaign Ethics Consulting Services. It's a mouthful. I assist candidates for office, any elected official or candidate for an elected office, to file the required reports with the South Carolina Ethics Commission for House members, Senate members, and any other elected official, sheriffs and members. City council, county council, school board, anything like that. The system that you have to file it on is kind of complicated and confusing. And so that's kind of where I found my niche. I've been doing this for about 18 years. I started as a need arose.

Derek Lewis: Now, I know some people are listening here and they're hearing ethics and they're going back to their college days. And so we will go past all of that. There are a lot of questions about whether South Carolina has the most strenuous or the least strenuous ethics requirements in the country. And we're going to skip all of that too. But let's maybe just talk for a second about, in general, what are some of the ethics requirements for somebody running for a local race? What do they need to do?

Leigh McGill: Any candidate who's running for office in South Carolina has to file a statement of economic interest before the election that discloses just some general information about their income, their salary, any connections you have with any governmental entity is pretty much the point of that, as you said, to look out for any potential conflicts of interest or anything like that. So that has to be filed upon running for the election and annually thereafter, if you are elected. And the other reports that have to be filed are quarterly and more often in an election year. But your first report is a campaign disclosure report. And this is where the candidate reports any contributions they've received and any expenditures they've made that are related to the campaign. And they have to file their first one within 10 days of receiving or spending campaign funds, you know, in excess of $500. And that's the one a lot of people miss because it happens so quickly. So once they get their campaign account up and open and start receiving donations, then they start the clock on that 10 days. And they can be fined $100 per day that that report is late if they don't get it in. So it's pretty important. And the same rules apply for the quarterly reports. For each day that it's late, they can be fined $100 per day.

Derek Lewis: The statements of economic interest are really important because they do require the candidate to disclose who in their household works and what revenue or income those individuals bring in.

Leigh McGill: They have to disclose someone in their household basically if they are employed and who they're employed by, but they don't have to disclose the amount unless anyone is paid by a governmental entity like a school teacher or any other government worker. If they're paid with government or state funds, then the amount has to be reported. Otherwise, they just have to say, you know, I work for Michelin and I'm paid a salary.

Derek Lewis: And that could be useful because if you're in an elected position and you're asked to make a decision about maybe how funding should go to transportation, then it'd be useful to know who of those elected officials derives some sort of family income from transportation-related organizations. The other thing that would show up in a statement of economic interest is also maybe speaker fees or where you've maybe been sent away to Atlanta and flown there to speak at a conference that, you know, we hear in D.C., you know, these stories of people kind of getting exorbitant fees that really they're being paid in advance to do work. Those are all disclosed on the statement of economic interest where you're being, you know, flown to and maybe fees you're getting from organizations to speak at their conferences?

Leigh McGill: Yes. And expenses that are covered by whatever entity, I guess, sponsors the conference, like South Carolina Beer Wholesalers Association kind of thing. They have a conference every year, say at Kiawah Island. And so they pay the expenses for the legislators that go down that are invited and they have to disclose that.

Derek Lewis: These reports we can find on the Ethics Commission's website, correct?

Leigh McGill: Correct.

Derek Lewis: You can search for both candidates and currently current office holders and I guess former office holders.

Leigh McGill: Yes.

Derek Lewis: To see their statements of economic interest throughout the time that they've been and they file those annually.

Leigh McGill: Correct.

Derek Lewis: The other report that we see, and I think we'll have all of this in the show notes so people can kind of get to them themselves, but there are also some candidate disclosures around the money that they've brought in and the money that is going out. Can we talk a little bit about those disclosures?

Leigh McGill: Yes. So again, those are the campaign disclosure reports and they're required to be filed quarterly by the 10th of the month after the end of the quarter. So, you know, April 10th, July 10th, October 10th and January 10th. And it covers all transactions in that quarter. And any loans say that the candidate took out to start their campaign, they have to report that. The required information for contributions is you have to report their name, their mailing address, and their occupation. And of course, the amount of the disclosure and the date that it was deposited and those kind of things. And then for business, now some states don't accept business contributions, but South Carolina does. So they can get contributions from any business. And so those you don't have to report, of course, the occupation. You just have to report the name and address of the donor. And the main thing you're looking for on the donation side of those campaign disclosure reports is the limits, because there's limits per election cycle. And the election cycle is different depending on the office.

I mean, some of them run, you know, mayors sometimes are in odd years and they're for four years, different offices six years, you know, senates for four years, houses for two years. So an election cycle is however often that election happens. And the limits are the same, interestingly enough. So like a donor can only give a thousand dollars per election cycle. And so that's the important thing to keep up with. That's really the main thing I think they look for when they're reviewing these reports.

And then as far as the expenditures, just same thing, you have to report the name and address of the vendor and the purpose of the expenditure. So, you know, you paid printing company $3,000 to print your Christmas cards. And so you have to report that.

Derek Lewis: And that's, I think, some of the place where that kind of trips people up are these quarterly reports that have specific deadlines. And the Ethics Commission will send you a very not nice letter if you miss those deadlines that usually include a fine. But then also in those reports, ideally, you should be able to look at those reports and see, all right, this candidate raised $10,000, and here are the 20 people who each gave him $500, and the candidate spent $10,000, and here is what they spent their money on, correct?

Leigh McGill: Yes.

Derek Lewis: And so if somebody's just interested in kind of how a campaign is financed or kind of how the candidate kind of got motivated to run and who kind of pushed that money along, you should be able to see the names of those people and then kind of see like and what did they do kind of as a result of that.

Leigh McGill: Yes, that's the point. I mean, this is public information. So anyone interested can access it. And one more point about the contribution limits. If there are, say, two people in a household, Mr. or Mrs. Smith, Mr. Smith can give $1,000 and Mrs. Smith can give $1,000 separately. And then if they own Smith Enterprises, Smith Enterprises can also give $1,000. So for each entity or individual, the limit is $1,000 per election cycle.

Derek Lewis: Then I think one of the other benefits of the state website is that if I look on Mr. Smith gave money to Derek's school board campaign, then I can actually click on him and it would tell me other campaigns that he also contributed to. Is that correct?

Leigh McGill: Yes, if you go search for it the right way, which can be a little confusing, but yeah.

Derek Lewis: And so that may help you, like if you have questions about like, well, who is supporting this person running for county council? Then ideally, you should be able to also look and say, oh, that person also supported these people who ran for school board and also ran for the house. And so you might see kind of patterns in who those candidates' support is coming from and maybe other candidates that are also receiving similar support. What we've talked about so far are how individuals or businesses can directly contribute to a candidate. And those contributions are really bound by kind of South Carolina ethics requirements about kind of how much a candidate can receive, how much a candidate can spend, kind of all of those things. But there are also political action committees that exist in South Carolina and all over the country that spend money on behalf of races and in the attempt to influence a race that a candidate doesn't directly control. And those PACs could see money kind of going on behalf of a candidate that won't show up on those reports. Is that correct?

Leigh McGill: Yes.

Derek Lewis: So can we talk here just a little bit about kind of what a PAC is and kind of how it's used?

Leigh McGill: PACs can spend money themselves. The money doesn't go directly to any candidate. They're spending money themselves that they have received from people who support their particular issue. For example, the NRA. People who support the NRA send them money. Their limits are different. I don't know what those are. How much somebody can contribute to a PAC, I have no idea. But from that PAC money, The NRA can send out a mailer that says these candidates, A, B, and C, can list multiple candidates. You know, we support these candidates. And the main thing that they have to do is at the bottom of the mailer, it would have to say this was paid for by the NRA. Campaign funds were not used. That's the whole key, that campaign funds were not used to fund this mailer.

Derek Lewis: And that's really helpful because as you get the, you know, one or 150 mailers a day in your box, you may see a whole lot of messaging that may suggest that it is supporting or not supporting a candidate that may not have come from that candidate or that candidate's opponent. And that's really helpful because if you're looking at school board races, they're not sending out a lot of mailers on their own. But there are individuals who are, through a PAC, sending out campaign advice to their neighbors, and it will need to disclose at the bottom, this came from the NRA or from some other organization that is invested in this campaign, but isn't the candidate.

Leigh McGill: Correct.

Derek Lewis: This is a really complicated issue. And ethics filings and ethics reporting and, you know, all the deadlines, it can be a lot. So, you know, when you look at candidates who either are running and get tripped up as a candidate or people who are holding elected office, where are the places where you see kind of the biggest stumbling blocks. And really, what advice would you give somebody who's maybe thinking about running for office or somebody who is friends with somebody who is an elected official and is trying to help them, you know, put out posters and signs? What advice would you give people kind of who are new to this process?

Leigh McGill: Get in touch with me at the very beginning would be my advice. You have to do this stuff at the very beginning, like when you open your campaign account and start receiving money and that generally you got to receive money to spend it on the signs or you're loaning money to your campaign to purchase the signs because those are expensive to get those kind of things so.

You need to start this stuff at the very beginning. That's where people usually get tripped up is with that initial report. And then trying not to get too detailed. The problems I see and when people come to me when they have messed it up is understanding that the transactions they report have to match up to the bank statement. It sounds very simple, but it's what cleared. So just because you wrote a check on March 15th to so-and-so from your campaign account, it might not have cleared. That should not be on the first quarter report. That would be on the second quarter report if it cleared on April 5th. So it's the dates that trip people up. And then if they take online donations, we, of course, have to report that too. And you have to report the fees. You know, if somebody donates $100, you know, they're taking a fee of $5. Well, the contributor gets credit for $100. The campaign is paying the fee. So you have to do that sort of separately. And that's where people get out of balance. And once it's out of balance on one report, it just snowballs. And so knowing how the reporting system works seems to be the biggest challenge for people. And just how to enter the information, that seems to be the biggest challenge.

Derek Lewis: And that's really good advice that you really should call in a professional report, before you start taking money and before you start spending money or before you start helping on a campaign and make sure that the things you're thinking about doing are right, because if you wait until you get the letter from the Ethics Commission, there's a fine coming with that letter and you can't get out of the fine by saying you didn't know.

Leigh McGill: And I'm working with a client right now. They also do random audits. You can go on the website and see how they do those. There's like a percentage. I mean, they're totally random, according to whatever their formula is. And so they'll audit them for about an 18-month period. And I mean, they go through every single item. And look, you know, you put NC instead of SC, you, you know, and they'll send you their recommendations and their findings. And you've got 30 days to make those corrections and get back into balance. And that kind of panics some people. South Carolina has really been cracking down on this in the past, I'd say, three or four years. And they started doing the random audits and people are paying attention.

Derek Lewis: I really appreciate you helping candidates kind of get the right footing to get this process going and making sure that people are compliant. Most people we know who are running for office don't know what they don't know. And getting them that information early definitely helps make a difference. So thank you for all that you're doing there. Thanks so much for your day.

Leigh McGill: Thank you.

Catherine Puckett: Simple Civics: Greenville County is a project of Greater Good Greenville. Greater Good Greenville was catalyzed by the merger of the Nonprofit Alliance and the Greenville Partnership for Philanthropy. You can learn more on our website at greatergoodgreenville.org.