South Carolina Government Funds to Go to State Legislators’ Nonprofits

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May 9, 2011; Source: The Nerve | You would think sitting legislators might have learned from scandals at the state and federal level that it is much better not to sit on the boards of nonprofits that you’re pitching for government funding. That message hasn’t reached a couple of legislators –from both political parties – in South Carolina apparently.

Two state senators, Republican Hugh Leatherman and Democrat Yancey McGill, are on the board of the North Eastern Strategic Alliance. Democratic state Senator Brad Hutto is on the board of the SouthernCarolina Aliance. Representative Bill Hixon, a Republican, is vice chairman of the Economic Development Partnership

The three nonprofits are among seven organizations that are being pitched for a share of $4.7 million in state funding by the Senate Finance Committee, chaired by Leatherman with McGill as a member. Their nonprofit, NESA, is a $1.4 million operation, 31 percent funded by government money in the organization’s last fiscal year. The Economic Development Partnership receives 87 percent of its funding from the government. The Nerve and the South Carolina Secretary of State’s Office couldn’t locate the tax filings of the Southern Carolina Alliance.

Common Cause of South Carolina raised a concern that the presence of these pols on the nonprofits’ boards would lead to their getting more money than other competing nonprofits.

That is a concern, but it’s not the most important concern, especially since the Committee is considering a version of the state budget that would divide the $4.7 million equally among the seven organizations, giving each the equal sum of $671,428.57 – in other words, handing out the money without a thought to what the groups would do with the funds. Also, the decision wouldn’t take into account which groups might need more, which might need less, which might need – or deserve – none at all.

The bigger problems with the politicians on the nonprofits’ boards are this: The nonprofits will distribute contracts, jobs, and grants that might earn the legislators the electoral loyalty of the beneficiaries; and private donors can buy face time and influence with the legislators by making charitable contributions to the charities. In both cases, the grants, contracts, donations, and thank-you’s create a dynamic of undisclosed influence peddling that can undo even the best intentions of presumably honest and ethical state legislators.

If Senators Leatherman, McGill, and Hutto, and Representative Hixon are interested in examples from other states about the almost automatic problems these situations lead to, we would be glad to provide the links.—Rick Cohen