Pols Often Spend Campaign Funds on Their Own Businesses

By Taylor Estes
June 15, 2016

Sen. Thomas Alexander, R-Oconee, frequently has a need for office supply goods. Fortunately for him, he happens to own an office supply store.

The Walhalla county resident owns a small business by the name of Alexander’s Office Supply and has spent a good deal of his campaign funding at his very own store. The question arises, then, Is there anything wrong with putting campaign funds into your own business?

The job of senator is only part time, paying a salary of $10,400 (or around $30,000 when all the benefits are thrown in), so there’s nothing unusual about being a businessman and a senator at the same time. But when the senator raises money to be spent on campaigns and sends it to his own business, citizens are right to ask what’s going on.

It’s not illegal. But does it pass the “smell test”?

The question doesn’t seem to bother Sen. Alexander. State records show that over $42,000 of campaign funding has been spent at Alexander’s office supply store from 2011-2016.

State Ethics Law of South Carolina (section 8-13-1348 of SC Code of Laws) bans campaign funds from being “converted to personal use” or used to “defray personal expenses which are unrelated to the campaign or the office if the candidate is an officeholder.” But the practice of using campaign money to fund the privately owned businesses of government officials is pretty common in South Carolina.

For example: Rep. David Hiott, R-Pickens, is the owner of a copy shop, a business in which other lawmakers – lawmakers from all over the state – have invested with their own funds.

A closely related practice is also common: lawmakers using campaign money on businesses or nonprofits in which they have a direct interest. For example: Rep. Brian White, R-Anderson, directed several thousand dollars in campaign funds to a nonprofit where his wife is director of development. And Sen. Hugh Leathgerman, R-Florence, donated $17,500 out of his campaign account to a nonprofit on whose board his wife sits.

So how is it that these South Carolina government officials are getting away with a practice that dances dangerously close the border of legality? A major part of the answer is that the law is vague enough to allow it.

In any case, if even the appearance of a conflict of interest is present, why wouldn’t Alexander simply do business with Staples or Office Depot? Can he buy materials more cheaply at his own business? Maybe, but surely the difference isn’t that great. It’s a telling indication of the mindset inside the State House that avoiding the appearance of conflict doesn’t seem to occur to anyone.

Whatever the legality here, lawmakers are using money that doesn’t belong to them – “their” campaign funds – and spending it on their own businesses. If the law allows it, maybe the law shouldn’t.

Taylor Estes is a research assistant at The Nerve (thenerve.org), an online investigative news website run by the South Carolina Policy Council

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