Firms named in SC corruption probe have hundreds of millions at stake

Spend millions. Bring in hundreds of millions.

South Carolina’s largest special interests know the time they spend working the state’s lawmakers under the S.C. State House dome is well spent.

But was the help they got from one of South Carolina’s most influential political families legal?

Recently indicted state Rep. Rick Quinn, whose father operates a sprawling political consulting empire, stands accused of voting and lobbying in the Legislature on behalf of special interests that, prosecutors allege, paid him through his direct-mail business and his father’s firm, Richard Quinn & Associates.

The Lexington Republican also is charged with failing to disclose accepting nearly $4.6 million that he received from special interests that lobby the Legislature.

The former House majority leader created a pay-for-play back channel that gave those companies, groups and agencies an upper hand in the Legislature, according to special prosecutor David Pascoe, who is leading an ongoing State House corruption probe that has indicted four GOP lawmakers.

Both Rick Quinn and his father, Richard Quinn, have denied any wrongdoing. Rick Quinn has called Democrat Pascoe’s probe a “partisan witch hunt” targeting Republicans. Richard Quinn has not been charged with any crime, nor has anyone representing the companies or agencies.

Much at stake

The companies that Quinn is charged with illegally helping are big fish in the pool of special interests vying for influence in South Carolina’s State House.

They include the Cayce-based SCANA utility; telecom giant AT&T; the Columbia-based, health-insurance powerhouse BlueCross BlueShield; the Columbia-based Palmetto Health hospital system; the S.C. Trial Lawyers Association; the payday lending industry; the Charleston-based State Ports Authority; the University of South Carolina; “and many, many more,” according to special prosecutor Pascoe.

Combined, those special interests have spent at least $10.4 million since 2009 to employ a stable of lobbyists, excluding the $4.6 million that Pascoe says Quinn was paid by groups with business before the state. Those lobbyists legally are paid to sway lawmakers’ votes on key legislation, regulatory appointments and budget decisions.

The special interests also donated at least $510,000 during the same time period to curry favor with the powerful House GOP Caucus, whose 77 members make up a near-supermajority in the State House’s 124-member lower chamber. Two of the caucus’ past majority leaders, including Quinn, have been indicted in Pascoe’s probe.

Influence is not cheap. But it appears to be worthwhile.

In the last decade, roughly $8.3 billion has flowed from or through the state to BlueCross BlueShield, AT&T, Palmetto Health and SCANA – companies that have ongoing contracts with the state. Most of that money – more than $7 billion – was state health plan money that BlueCross BlueShield used to pay medical claims for state workers and retirees. The insurer was paid $741 million by the state for its work, mostly for running the health plan.

In addition, the State Ports Authority and the University of South Carolina have received close to $1 billion combined in state appropriations since 2011.

Quinn not alone

The average taxpayer may not like the influence that special interests exert on government. But, done legally, that lobbying is a fact of political life in the capitalist United States.

However, some special interests stray from the legal avenues of influence, government watchdogs say.

“These folks are not wanting to confine themselves to any one road to influence,” said Lynn Teague with the League of Women Voters, speaking generally about the multiple ways that special interests buy influence.

Quinn is not the only legislator accused of using his public office to help business clients.

In December, state Rep. Jim Merrill, R-Berkeley, was hit in December with a 30-count indictment alleging he accepted money to influence government decisions and sponsor legislation for private interests.

One count charged former House Majority Leader Merrill with taking $172,485 from a New Jersey-based bus contractor in exchange for sponsoring a failed 2012 bill “regarding legislation to privatize school buses” in the Palmetto State.

Merrill also was paid by a company that wanted to buy a Charleston law school, a Savannah-based engineering firm, the Charleston Area Visitors and Convention Bureau, the S.C. Association of Realtors, the S.C. Manufacturers Alliance, the state Association of Convenience Stores and — like Quinn — the Trial Lawyers Association, according to his indictment.

Merrill has said he is innocent and vowed to fight the charges.

‘Strikes at the heart of … democracy’

Lobbyists often are derided for operating in the shadows.

But they are required to make some of their activities public. For example, they must register with the state and disclose the special interests that they work for as they try to influence public policy.

What Quinn and Merrill are accused of doing – using public office to help clients that paid them – is much more subterranean, observers say.

“It really strikes at the heart of what it means to be a representative democracy if all the citizens are not equally represented,” said Winthrop University political scientist Scott Huffmon.

“Lawmakers are elected to represent the best interests of their constituents, not the best interest of their bank account or the companies that pay them.”

Of the six companies, groups or agencies that The State reached out to on Friday, two responded to questions about working with Quinn and being named by Pascoe as benefiting from his work.

“AT&T is not aware that it is the subject of any allegations by the special prosecutor,” said Clifton Metcalf, the company’s director of public affairs for the Carolinas.

“AT&T has not paid any entity associated with the Quinns to lobby at the Legislature on our behalf, and the persons we have authorized to lobby at the Legislature on our behalf are set out in our filings with the State Ethics Commission. We will not release non-public information regarding details of relationships AT&T might or might not have with other entities.”

The University of South Carolina said it has never hired Rick Quinn for any purpose and never paid Richard Quinn & Associates to lobby.

But it and the others named in Quinn’s indictment have huge stakes in what goes on at the State House.

How huge?

Here’s a look at what was at stake for the companies, groups and state agencies that Pascoe says benefited from Quinn’s alleged lobbying.

SCANA

Customers of SCANA subsidiary SCE&G need only look at their rising power bills for proof of the utility’s influence in state government.

The utility has won nine rate hikes on customers to finance the construction of two nuclear reactors in Fairfield County. About 18 percent of an SCE&G customer’s power bill now goes to pay for that incomplete project.

Now estimated to cost $14 billion, the project is about $3 billion over budget and faces an uncertain future after Westinghouse Electric, a major contractor, filed for bankruptcy. While SCE&G and state leaders are looking for a way to keep the project afloat, critics fear another rate hike or that the reactors never will be finished.

Power companies are among the top spenders on lobbying at the State House.

The state law that allowed SCE&G to pass on to customers the cost of building the Fairfield reactors was passed in 2007. Since 2009, the earliest year for which data is available, SCANA has spent $1.5 million to lobby S.C. lawmakers.

Now, concern over how cost overruns will impact South Carolinians’ wallets is driving a proposal to protect utility consumers against rate hikes on future projects.

SCANA also has other interests in state government’s operation.

The state is a customer of the power company, for instance, and has paid the utility $247 million over the last decade for power.

Members of the General Assembly also appoint members of the state Public Service Commission, which regulates utilities and decides if utilities can raise customers’ rates.

The Cayce-based utility has paid Richard Quinn & Associates a retainer for its counsel on public policy strategies since the mid-1990s, a SCANA spokesperson said again Friday, adding it would be inappropriate for the company to comment on a pending investigation.

The company has declined to say how much it has paid RQ&A.

University of South Carolina

The state’s flagship university has a huge interest in what happens under the State House dome.

The downtown Columbia school relies on state legislators for about 10.5 percent of USC’s $1.5 billion-a-year budget.

USC makes annual pleas – most falling upon deaf ears – for lawmakers to spend more state money on higher education. This year, for instance, it urged legislators to borrow hundreds of millions of dollars for maintenance and building projects at S.C. colleges. USC stands to get $25 million to renovate its old law school building if legislators approve a borrowing bill for higher education next year.

It recent years, USC has relied upon lawmakers for $5 million a year to launch and support Palmetto College, its online degree completion program, and for $20 million to help construct a new $80 million home for its law school.

Now, USC wants $50 million from the state to kick-start a new, $200 million medical school and health sciences complex on downtown Columbia’s Bull Street property.

As justification for putting Richard Quinn & Associates on retainer in the aftermath of the Great Recession, USC cited the challenges it faced in trying to expand its medical school into Greenville in a “difficult economic, political and cultural climate,” school records show.

But USC did not pay Richard Quinn & Associates for lobbying at the federal, state or local level, the school’s contract with the firm explicitly states.

Instead, the contracts state, USC paid the firm $491,900 from 2011 to 2015 for public relations and consulting work.

That included “governance and regulatory approval – presentations, messaging, strategic planning, crisis management, public opinion tracking, long-term university marketing and branding among South Carolina’s opinion, community, business and government leadership.”

For example, the consulting firm helped USC prepare its bid to S.C. lawmakers for a new law school building and advised the university on a proposal to rollback state regulations of colleges, the documents show.

S.C. Ports Authority

The State Ports Authority does not get an annual appropriation of state dollars from S.C. legislators.

But the quasi-public agency has plenty at stake in the State House.

Look no further than the half-billion-dollar Charleston Harbor deepening project, set to give South Carolina the deepest harbor on the East Coast.

After much debate, state lawmakers set aside more than $300 million in 2012 to foot South Carolina’s share of the bill for the project. Congress authorized the work four years later, and work is expected to begin later this fall.

Over the past four years, S.C. legislators also have paid or pledged more than $10 million for work on ports in Jasper and Georgetown counties.

Since 2009, the Ports Authority has spent $432,000 lobbying lawmakers. During that same period, it also paid more than $2.6 million to Richard Quinn and his firms.

That money, the senior Quinn has said, paid for polls tracking public opinion of the port, and for his firm to write, produce and place TV and radio advertisements.

BlueCross BlueShield

BlueCross BlueShield tops the state’s list of its highest-paid vendors because it manages the state’s more than a billion-dollar-a-year state health plan for employees and retirees.

The state has paid the insurer roughly $741 million since mid-2007 in fees mostly for running the state health plan. In that role, the insurer managed more than $7 billion in medical claims for state employees and retirees, paying them with money from the state’s health plan.

The insurer has a lot at stake in state government. In addition to managing the state health plan, it has more than 1 million S.C. customers and 11,000 employees.

The health-care giant, which has spent $1.6 million lobbying lawmakers since 2009, declined to comment for this story.

Go to Source