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Friday, October 6    |    Upstate South Carolina News, Sports and Information

Bill would affect access to credit rating agencies
Governor's Office blasts Democratic senator's plan

Published: Wednesday, September 13, 2006 - 6:00 am


By Dan Hoover
STAFF WRITER
dchoover@greenvillenews.com


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Top state officials would be required to speak "with one voice" to credit rating agencies under a bill Sen. Brad Hutto, D-Orangeburg, said Tuesday would be pre-filed for the 2007 legislative session.

The proposal -- for which no specifics were available -- was sharply criticized by spokesmen for Republican Gov. Mark Sanford and GOP state treasurer nominee Thomas Ravenel. But it drew support from Democratic Treasurer Grady Patterson, who has blamed Sanford and Republican Comptroller General Richard Eckstrom's meetings with the agencies for the 2005 loss of the state's top AAA credit rating.

Hutto said those sessions had "sent a horrible signal."

Patterson, who has been battling Sanford and Eckstrom over their contacts with the private ratings agencies for more than a year, has said he is the lone constitutional officer empowered to talk to the agencies.

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He said Tuesday that he has not seen the bill or talked with Hutto, but "the concept is a good idea. It eliminates these political stunts we've seen in the last couple of weeks." He referred to Ravenel's meetings last week with bond rating officials.

Jason Miller, Sanford's campaign manager, said, "The horrible signal to credit agencies was the willingness of the General Assembly, including (Democratic gubernatorial nominee) Tommy Moore, to spend every dime that comes into Columbia."

He said if Sanford and Eckstrom win second terms on Nov. 7 and Ravenel is elected, "South Carolina will speak with one voice to the credit agencies, and it will be a fiscally conservative voice."

Rod Shealy, Ravenel's political strategist, said, "Try as they might, the Democrats cannot shift the blame for our credit downgrade and multibillion dollar unfunded liability away from the incumbent treasurer and his caretakers. He's been asleep at the wheel, and they're trying to rouse him in time for the election."

Shealy said the AAA rating has been lost twice under Patterson and was restored the first time by the efforts of Republican Treasurer Richard Eckstrom," then in office after defeating Patterson in 1994. He lost to Patterson in 1998, but was elected comptroller general in 2002.

"Now, Thomas Ravenel is simply following Eckstrom's formula for a healthy dialogue with the rating agencies, which has been lacking," Shealy said.

Hutto said in a news release issued by the Senate Democratic Caucus that the bill is intended "to prevent fractured messages from being presented to the firms responsible for setting the state's bond credit rating," one that was downgraded from the top AAA rating 14 months ago.

"State leadership and potential leadership need to be speaking with one voice," Hutto said. "Restoring our state's credit rating is serious business and should not be used for political stunts," he said referring to meetings with the rating agencies by Sanford, Eckstrom and Ravenel.

Just how the other officials would be required to speak "with one voice" wasn't clear.

Phil Bailey, political director for the caucus, said the details are "still being worked out (but) the goal is for state leaders to present a unified message to the rating agencies. Sanford and Eckstrom have every right to speak their mind. Hutto believes that when state officials are communicating with the rating agencies, they are speaking for all of South Carolina, not just their political agendas."

Sanford and Eckstrom met with rating agencies in New York in April 2005.

Democrats contended that Sanford used the trip to promote a tax break for the wealthy.

Hutto said that "Sanford and his sidekick, Richard Eckstrom's, big adventure to the Big Apple sent a horrible signal. Their rogue trip to sell this reckless plan triggered alarm bells that helped cause our credit downgrade," said Hutto.

Because of that meeting, Hutto said Patterson "was forced to make a trip to meet with the credit rating agencies and explain that Sanford's plan was not likely to pass the Legislature."

Standard and Poor's rating agency cited the General Assembly's rejection of Sanford's tax plan in their press release as a positive step. But the damage from the Sanford-Eckstrom trip was done. S&P downgraded the state's credit in July, 2005.

Hutto said Ravenel's meeting last week with the agencies was a cause for concern because it "sent another troubling message to our credit-raters. If he misrepresented one fact or figure, it would be a setback to our efforts to restore our perfect credit," Hutto added.


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