How Money and Politics Taint Each Other

(Editor’s Note – The following is an op-ed submitted to Grand Strand Daily by Bill Warner, Captain, USNR-ret.,  a retired attorney and a resident of Carolina Forest. It is an excellent description of what is happening in the SC House District 56 race with the television and radio ads and mailers, ostensibly by a third party PAC, in support of Tim McGinnis.)

By Bill Warner

Paul Gable’s incisive, thoroughly documented account of the twisting and turning campaign finance contortions apparently involved in the House District 56 special election has been a real revelation to me of not only the universal money and politics culture in South Carolina, but of its regulatory climate as well.

At the outset, let’s get past the “outsider” sticker I get pasted on my forehead every time I open my mouth around here about our local polity.  My people settled along this part of the coast in North and South Carolina nearly 300 years ago – about 1720 – and the many branches of that family tree are still alive and well, particularly around Wilmington.  My parents lived in Surfside Beach for 30 years where I was also a property owner, and where I’ve probably spent more time than anywhere else in the world except the place where I made my living for 55 years, Louisville, Kentucky.

Even if somehow I am by definition a disdained “outsider,” I’ve got bad news for the folksy, down home good ole boy culture that the reigning “insiders” wear like a motheaten cardigan.  There’s too many of us – with more pouring in every day – sooner rather than later a clear majority of voters.  And we’re simply not taken with the quaint backwoods oligarchy we have here fumbling and bumbling with a modern millennial urban community. Also, please note we’re not into the bread and circuses that pass for authentic governance, and worse, we’re not going to shut up.

Politics is in my blood.  My original and still much revered political mentor was my grandmother, Katherine Mayo Cowan, who was mayor of Wilmington, North Carolina, and a stalwart in Democratic politics in North Carolina in the 1920’s and ‘30’s.  She was active in FDR’s campaign in 1932 and then an executive with the National Recovery Administration for ten years – along with Frances Perkins, one of the highest-ranking women in that national government.

Another mentor is Senate Majority Leader Mitch McConnell.  He was the youngest Chairman of the newly thriving Jefferson County, Kentucky Republican Party in the 1970’s and an Assistant Attorney General in the Nixon/Ford administration.

Senator McConnell was elected as County Judge/Executive in Jefferson County [Louisville] Kentucky in 1977.  I was a close associate, and served as a lawyer assisting him in that office until 1984 when he upset a dug in, longtime established incumbent to gain the U.S. Senate seat he holds now.

I cut my teeth on campaign finance issues working with him, and went on to serve as a member of the Kentucky agency that regulates money in politics, as well as representing and advising maybe a hundred – maybe more, I’ve never kept count – of candidates and campaigns on every level, as  well as IRS regulated tax exempt organizations such as so-called “527’s” who want to contribute to  candidates with constitutionally protected advocacy and support, and to do so have to navigate the complex minefield of statutes, rules, and court decisions on what are called “independent expenditures.

This is the precise high-risk zone that Paul Gable has, correctly, identified supporters of at least one candidate in this election as having stumbled into. Whether intentionally, or out of negligence or ignorance – it is, as he says, for his readers to decide.  Unlike most of his peers in the rest of the print and electronic media, he believes that if his readers have the facts in front of them with the bark off, they have enough common sense and sensibility to make up their own minds.

OK, so what else, if anything, has all this got to do with a local race in South Carolina in 2017?

Let’s start with Mitch McConnell.  He’s a get-it-done guy who’s been in highly visible elective office for 40 years.  During that time, literally millions of dollars have passed through his campaigns.  As is not the case with most of his elected colleagues along the way, you’ve never heard, and you never will hear, even a hint of an issue over how any of that money got there, or how it was spent.

The reason?  It’s because he’s been scrupulous about, first, having people next to him who know the rules, second, keeping the rules on a figurative marquee before his lieutenants in every phase of his campaigns, and third enforcing a zero-tolerance policy for those in or around the campaign who can’t or won’t comply.

So, he’s a goody-two-shoes.  Big deal, you say.  Well, goody-two-shoes, maybe.  But a big deal? You bet.  But not for the reasons you may think.

Senator McConnell, like quite a few successful politicians – but not many around here, apparently – understands that in big league politics, appearances rule.  Controversies at the legal/illegal boundary of issues over money in politics – whoever turns out right – invariably divert valuable candidate time and energy to mobilizing, at worst, a legal defense or, at the very least, repetitive, endless explanations and justifications which the opposition, of course, takes and keeps before the electorate with blaring trumpets of righteousness.

Not that the Senator doesn’t believe in obeying the law and respecting the rules.  He does.  But his lesson here is, first and foremost, avoid the problem.  Stay as far back from the edge of the cliff as you can – most especially away from even appearing to be close to or over the line which can jackpot a candidate as quickly and thoroughly as the real deal.

That, in a word, is the wisdom that I don’t see anywhere in the discussions and arguments over the money supporting a candidate in this race. It’s strange to me, but maybe not to those steeped in the reigning political culture around here, that even if simply out of ignorance or negligence, those involved are juggling hand grenades, not tiddlywinks.

It’s not much comfort to that culture that the South Carolina campaign finance regulatory regime may well be as hogtied and tame as it appears.  There’s a 527 organization in the mix.  The IRS regulates 527’s and, based on a pretty consistent record of their use to attempt to circumvent campaign finance rules, has kept a close, wary eye on them for years. In my opinion, if the Enforcement Division in Washington gets even a whiff of this one they’ll be on it like a rockfall.

I’m not in any way saying what should or will happen here.  Only that if an IRS sanction, as it sometimes does, results in the disqualification of an expenditure made to a candidate as not being “independent,” that can have serious repercussions for the candidate involved.  If it’s from the candidate’s self-inflicted blind side, that’s even more unfortunate.  And totally predictable, preventable, and hence unnecessary as well.

As for the hapless 527, it’s usually a death sentence.

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