Posted on Mon, Apr. 18, 2005
S.C. GOVERNMENT

Secret donations in tax-credit debate raise potential for reform


Knight Ridder

People advocating for and against Gov. Mark Sanford's tuition tax-credit bill have spent about $1 million to influence the General Assembly.

Or they've spent millions. Or tens of millions.

It's hard to say because - but for a few exceptions - they don't have to disclose that. Nor do they have to say who is giving them money.

But evidence that they're spending a lot of money is all over South Carolina: Ads for and against the bill are on TV, radio and billboards.

Groups have paid for polls, studies, T-shirts, hats, phone trees and slick brochures.

And the groups acknowledge spending about $800,000 on their efforts.

Some lawmakers say they want to know who is behind it all and think it is time for a change in the disclosure laws.

"This thing has the potential for costing billions of dollars out of the state treasury, and we as legislators should know who's trying to influence our state," said Rep. Ted Vick, D-Chesterfield.

Legislative leaders, including House Speaker David Wilkins, R-Greenville, say they might be willing to consider the idea.

"The more openness you have in the process, the better," Wilkins said. "This may be the genesis for legislation on that."

Groups interested in influencing bills have tried several ways to persuade legislators.

However, lawmakers say the tuition tax-credit bill, first introduced last year, has attracted unprecedented attention.

While opponents fear tax credits would siphon resources from public schools and other state programs, proponents say the tax credit would push failing public schools to improve.

The groups for and against the tax-credit bill say they have the right to keep information about their donors and expenditures secret.

"There is not a 501(c)(3) [non-profit organization] in the country that discloses its membership list," said Ed McMullen, president of the S.C. Policy Council, a conservative think tank that has aired ads for tax credits.

When asked by The (Columbia) State for information on its finances, the anti-tax-credit group Choose Children First also declined, saying it would put them at a competitive disadvantage.

"We made the decision early on that if the other side is going to [keep it secret] we would not disclose," said Lee Bussell of Choose Children First. "It would be unfair to our donors."

In an election, donations and expenditures by individuals and groups must be disclosed.

But the courts have firmly protected the right of groups in other situations to keep their fund-raising information secret, said John Crangle, executive director of the government watchdog S.C. Common Cause.

Tax-credit opponents speculate that much of the money the bill's supporters are spending has come from out-of-state groups pushing the proposal.

But supporters of the bill, including South Carolinians for Responsible Government, say most of their money is coming from S.C. residents who want tax credits.

While they wouldn't fully disclose their own finances, opponents of the bill say lawmakers should be able to know for sure who is trying to influence them.

Out-of-state groups spent tens of thousands of dollars last year - mostly unsuccessfully - to try to get pro-tax-credit candidates elected in Richland, Charleston and other counties.

Tax-credit opponents have raised some outside money.

S.C. Education Association President Sheila Gallagher said her organization, which represents teachers, applied for a grant from the National Education Association to fight the bill.

Gallagher declined to say how large the grant was.

Six groups are working hard to influence the outcome of the tuition tax-credit bill. Four of those paid lobbyists in 2004, the most recent year records are available. The lobbyists represent the groups' positions on several issues, including tax credits. Here's what they spent:S.C. School Boards Association | $26,800 in the first six months of 2004

S.C. Education Association | $20,000 in the last six months of 2004

S.C. Association of School Administrators | $65,138 in the first half of 2004

South Carolinians for Responsible Government | $50,000 in the first half of 2004





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