Lawsuit Settlement Will Loosen Ethics Confidentiality
Published April 2022
Just as the media have investigated and disclosed numerous examples of apparent conflicts of interest and corruption in state and local government here in South Carolina, a pending settlement of a federal lawsuit will allow whistleblowers who report ethics violations to publicly disclose their allegations without the threat of being prosecuted for doing so.
The lawsuit was filed on Aug. 25, 2021 by Columbia attorney Chris Kenney on behalf of a client who complained to the State Ethics Commission about a state legislator who voted for a bill favored by a lobbyist after the legislator’s businesses received $108,000 over three years from a subsidiary of the lobbyist’s client. The legislator did not disclose the payments on the required annual statement of economic interest. While finding that the allegations in the ethics complaint were factual, the commission ended up dismissing the complaint on the grounds that while the state ethics law required disclosure of direct payments from a lobbying client, it did not require disclosure of payments from a lobbying client’s subsidiaries.
According to the lawsuit, the complainant received a copy of the dismissal with a cover letter from Commission staff dated August 5, 2021. The dismissal has not been publicly disclosed and the identities of the legislator, lobbyist, lobbying client and the lobbying client’s subsidiaries are unknown. The lawsuit identified the complainant by the pseudonym “John Doe” and did not disclose any details about the case because of the threat of prosecution.
The strict confidentiality regarding ethics complaints is the result of the language of the state statute establishing the Ethics Commission, which states that “[a]ll investigations, inquiries, hearings, and accompanying documents are confidential and may only be released pursuant to this section.” The regulation expanding on this statute provide that this confidentiality applies to anyone associated with a complaint, “including the Complainant, Respondent, counsel, counsel’s staff, Commission members or employees, reporters or investigators,” as well as “[w]itnesses and potential witnesses.”
The federal lawsuit alleges that these provisions violated the First Amendment. It also argues that it is absurd that, as a result of the Ethics Commission’s dismissal of the whistleblower’s complaint, “it is lawful for a public official to be secretly paid by a lobbyist principal and to take official action in furtherance of that special interest so long as the money used to pay the public official is laundered through the lobbyist principal’s wholly owned subsidiary.”
“If this is the law in South Carolina,” the lawsuit states, “the public, the press, and the General Assembly should know, first and foremost so this massive loophole can be closed. Plaintiff would like to petition his government to reform the law, but South Carolina Code § 8-13-540(c) renders the proceeding ‘confidential’ and § 8-13-320(10)(g) threatens him with criminal prosecution for speaking about this star-chamber proceeding.”
But in a motion to intervene in the lawsuit filed Dec. 31, State Senate President Thomas C. Alexander stated that the plaintiff’s interpretation of the confidentiality provisions was incorrect. Instead, Alexander stated in his motion, they “provide confidentiality in the investigation process and regulates only what information the government itself may release.”
This led the Ethics Commission to issue a new advisory opinion concluding that its interpretation of the confidentiality provisions applying to anyone associated with an ethics complaint was incorrect. The opinion concludes that “A careful review of Section 8-13-320(10)(g) reveals that this provision limits only what information the Commission itself may disclose and at what stage in the complaint process such disclosure may occur. … Thus, the Commission hereby finds that Section 8-13-320(10)(g) does not implicate a private citizen’s speech and, instead, only regulates what materials the Commission may publicly disclose throughout the complaint process and when such disclosures may occur.” In issuing this opinion, the commission withdrew two earlier opinions based on a wide application of the confidentiality provisions.
In light of the new opinion’s statement that the confidentiality provision applied only to the Ethics Commission itself, and not participants in ethics proceedings, the parties have agreed to settle the federal lawsuit. Formal approval of the settlement by the court is pending.
The upshot is that whistleblowers will now be able to speak publicly about alleged ethics violations in government, and public officials will be more accountable for alleged wrongdoing.
FOIA Follies in DC: While South Carolina made ethics complaints more accessible to the public and press, in late March the U.S. Senate Judiciary Committee held a hearing on problems with the federal Freedom of Information Act, particularly issues with endemic delays and access to electronic records.
“We’re talking about timelines that are worse than routinely unmet, but almost never met,” Sen. Jon Ossoff of Georgia said. “We’re talking about massive backlogs.”
The committee was told that the sheer volume of records and of requests was overwhelming government agencies. “We’re seeing records in volumes in different forms that could not have been envisioned when FOIA was enacted,” Babak Talebian, director of the Department of Justice’s Office of Information Policy, told the committee. “Certainly, we’re definitely looking at advanced technology, including artificial intelligence to help us with the search and maybe even the processing of records.” Talebian added that the pandemic also had slowed FOIA response times.
“There’s clearly substantial room for improvement,” said Senator Chuck Grassley of Iowa, the ranking Republican member of the committee.
Eric P. Robinson focuses on media and internet law as associate professor at the USC School of Journalism and Mass Communication and Of Counsel to Fenno Law in Charleston / Mount Pleasant. He has worked in media law for more than 20 years and is admitted to legal practice in New York and New Jersey and before the U.S. Supreme Court. This column is for educational purposes only; it does not constitute legal advice. Any opinions are his own, not necessarily those of his employers.