Powerful legislative chairman profits from state-funded groups
By Rick Brundrett
As chairman of the S.C. House Ways and Means Committee, Rep. Brian White exerts considerable control over the multibillion-dollar state budget that affects the lives of all 5 million South Carolinians.
And his influence extends far beyond being the House’s chief writer and overseer of the state budget.
As the Ways and Means chairman, for example, he sits on and appoints half of the 10-member legislative Joint Bond Review Committee, which recommends large state building projects and the issuance of millions of dollars in taxpayer-backed bonds.
His chairmanship also guarantees him one of five seats on the State Fiscal Accountability Authority, which, besides approving JBRC actions, has jurisdiction over important executive branch functions, such as overseeing liability insurance claims against and major contracts issued by state agencies.
But an investigation by The Nerve found multiple instances of apparent conflicts of interests involving the Anderson County Republican. Since he took over as the Ways and Means chairman in mid-2011, for example, state appropriations to public and private agencies to which he has financial ties have increased – substantially in several cases.
• Since 2015, White, an insurance agent, has reported receiving insurance commissions totaling tens of thousands of dollars, mainly through policies purchased by five disability service organizations that annually get millions in funding from a state agency.
• Allocated state funds for one nonprofit organization that White earns insurance commissions through skyrocketed by nearly 119 percent since he became the Ways and Means chairman.
• White and his family for several years lived in a home formerly co-owned by the administrators of two private nursing homes that have received a total of more than $1 million in payments through contracts with a state agency while he has been chairman.
• White has reported receiving insurance-related payments through the firm of one of the state’s top lobbyists.
• White’s wife and the immediate past Ways and Means chairman both work at Tri-County Technical College, which received a 76 percent hike in state appropriations from when White took over as committee chairman to last fiscal year.
• The Joint Bond Review Committee and State Fiscal Accountability Authority in recent years have approved building projects for Tri-County totaling more than $4 million.
No one has accused the 51-year-old White, who was first elected to the House in 2000, of any wrongdoing.
Besides disclosing insurance commissions on his yearly income-disclosure reports, known as statements of economic interests (SEIs), he has recused himself from annual state budget votes involving agencies that he has financial connections to as well as from final votes on Tri-County Technical College projects, records show.
But most of his income disclosures have occurred since 2015, several years after the South Carolina Policy Council, the parent organization of The Nerve, along with citizens and grassroots groups, began pushing for public officials to disclose their private sources of income. State law was changed in 2016 to require disclosure of private-income sources, yet under their own reading of the law, legislators over the years have found ways around reporting direct and indirect income received from government sources.
And White’s vote recusals don’t prevent him, based on lawmakers’ interpretation of state ethics laws, from influencing final outcomes in other ways.
White’s multiple apparent conflicts of interest raise questions about the strength of the state’s current ethics laws, which have received heightened scrutiny since last year as four former lawmakers have pleaded or were found guilty of state public corruption charges, while a fifth ex-legislator awaits trial.
The last major overhaul of state ethics laws occurred in the early 1990s after lawmakers and others were caught in a federal bribery sting known as “Operation Lost Trust.”
State law, for example, bans public officials from using their office to influence a “governmental decision” in which they, family members or individuals or businesses with which they are associated have an “economic interest.”
The law also generally bans lawmakers from entering into contracts with agencies within a year of votes on state budget sections involving the agencies, or voting on agency budget sections if they represented clients before those agencies within a year before the votes.
White cited those laws in recusing himself since 2014 from state budget-section votes on the departments of administration, disabilities and special needs, drug and alcohol abuse, health and environmental control, health and human services, mental health and social services; and the S.C. Technical College System, House Journal records show.
But White – as with other House members who provided recusal forms for state budget votes – didn’t give specifics on the situations involving potential conflicts of interest.
State law requires those written statements to describe the “matter requiring action and the nature of his potential conflict of interest with respect to the action or decision.”
White did not return six written or phone messages from The Nerve seeking comment for this story.
White worked as an insurance agent with Greenville-based Capstone Insurance Services before it was acquired by the Marsh & McLennan Agency in 2014.
It is part of New York-based Marsh & McLennan Companies, which reported $14 billion in total revenues last year.
On his SEI filed in March this year, White listed Marsh & McLennan as a private source of income – in addition to separately reporting insurance commissions from various groups that get state funding – plus recorded receiving an unspecified bonus from Capstone Insurance.
Former state Rep. Dan Cooper, an Anderson County Republican who served in the S.C. House for 21 years, including six years as the Ways and Means chairman before White took over on June 29, 2011, was a founding partner of Capstone Insurance, according to his LinkedIn account.
From 2015 through this year, White reported earning a total of nearly $39,000 in insurance commissions, mainly through five disability service organizations that receive funding from the state Department of Disabilities and Special Needs (DDSN): Anderson County Disabilities and Special Needs Board, Greenwood Genetic Center, Horry County Disabilities and Special Needs Board, Pickens County Board of Disabilities and Special Needs, and the Tri-Development Center of Aiken County.
The genetic center, a nonprofit organization that, according to its website, focuses on “advancing the field of medical genetics and caring for families impacted by genetic disease and birth defects,” was a special line item in the DDSN section of the state budget before White became the committee chairman.
Since White became chairman, however, the organization’s annual general-fund budget has jumped by nearly 119 percent to $4.9 million this fiscal year.
Its total ratified budget has increased by nearly 50 percent over the period, to $13.1 million. State Ethics Commission records show the center has paid two or three outside lobbyists in recent years.
White received a collective $7,344 in insurance commissions from the genetic center from 2014 through last year, according to his SEIs.
Records show that in 2013, the former state Budget and Control Board, a five-member panel that included former Gov. Nikki Haley and White, approved the issuance of $5 million in taxpayer-backed bonds to Clemson University as part of a $21.5 million, joint-venture project involving Clemson and the genetic center.
The legislative Joint Bond Review Committee, of which White is a member and who appoints half of its members, earlier approved the bonds, as The Nerve reported then.
From 2014 through last year, White also received a total of $9,822 in insurance commissions from the Anderson, Horry and Pickens county disability boards, plus another collective $7,486 in commissions from the Tri-Development Center of Aiken County, according to his SEIs.
Ralph Courtney, executive director of the Tri-Development Center, told The Nerve that Capstone took over the workers’ compensation coverage for the center because the center’s former insurance broker “for whatever reason couldn’t sell that type of insurance.”
“He (White) hasn’t been down here in awhile,” Courtney said, adding he believes White will continue to earn commissions on the center’s policy as long as he remains employed with Marsh & McLennan.
Heather Waddell, Tri-County’s assistant executive director, said the Capstone insurance policy became effective on June 1, 2011 – 28 days before White became the Ways and Means chairman – though, according to records cited by the center, two other agents sold the initial policy.
White first publicly reported those commissions with his 2015 SEI, which reflected income received during the previous year.
Since White has been the Ways and Means chairman, Tri-Development and the other disability service organizations have received increased payments through the state Department of Disabilities and Special Needs, state comptroller general records show. Courtney attributed the payment hike to his organization, which records show received $16.7 million last fiscal year, to a recent change in the way DDSN distributes payments between the center and the Aiken County Board of Disabilities.
The Anderson, Horry and Pickens county disability boards did not respond to phone messages this week from The Nerve seeking comment. Comptroller general records show those organizations received total payments from DDSN last fiscal year ranging from $7.5 million to $8.8 million.
DDSN’s annual budget, as with other state agencies, starts in the Legislature with the Ways and Means Committee. As the committee chairman, White also is a member of the House-Senate budget conference committee that works out differences in the chambers’ versions.
Before assuming the chairmanship in 2011, White served as chairman of a Ways and Means subcommittee dealing with state health agencies, records show. From the time White became chairman of the full budget committee, DDSN’s general-fund budget has increased by about 49 percent, to nearly $248 million for the fiscal year that started July 1.
The annual budgets of state departments of Health and Human Services, and Health and Environmental Control; the Adjutant General’s Office; and the former Budget and Control Board – now known as the State Fiscal Accountability Authority, of which White is a member – also receive first formal approval through White’s budget committee.
State comptroller general records show the four agencies paid Clarendon Memorial Hospital and McLeod Health Clarendon, which took over Clarendon Memorial’s operations in 2016, a collective $1.14 million – most of it from HHS and DHEC – from fiscal 2008 through last fiscal year for unspecified “contractual services.”
From 2008 through 2016, White received a total of nearly $28,000 in insurance-related payments through Clarendon Memorial Hospital, according to his SEIs.
A hospital spokeswoman did not return a call this week from The Nerve seeking comment.
White also has reported receiving smaller insurance commissions in recent years from the “Clarendon County Nursing Facility,” Discover Upcountry Carolina Association, Powdersville Water District and Williamsburg Hospital.
In addition, from 2009 to 2016, he reported collecting a total of $2,754 connected to his insurance work from Fred Allen and Associates, a Columbia lobbying firm whose clients this year include AT&T, BMW and Santee Cooper.
In 2017, Allen received $266,168 in total payments from all clients, making him one of the highest-paid lobbyists in the state that year, State Ethics Commission records show.
Allen did not return a phone message this week from The Nerve.
Pricey digs, big contracts
Brad and Bryan Moorhouse also have had financial connections to White, records show.
Brad Moorhouse, the administrator of the NHC Healthcare Anderson nursing home, and his brother, Bryan Moorhouse, the administrator of NHC Healthcare Greenville, co-owned a large house in Anderson County from 2007 to 2012 where White and his family lived during the period, county property and vehicle tax records show.
NHC, or National Healthcare Corporation, is a Tennessee-based company that reported about $967 million in net operating revenues last year.
The Moorhouse brothers purchased the Anderson County house, which sits on 5.6 acres on Concord Road, for $500,700, and Brad Moorhouse was the sole owner from 2012 until 2016, according to county property records. Brian White continued to list it as his home address on vehicle tax records before he and his wife bought another house in Anderson County in 2014, records show.
Over the past eight fiscal years, the state Department of Health and Human Services paid a total of $992,830 in state and federal funds to NHC Healthcare Anderson for “contractual services,” including a collective $253,107 in 2010-11 under a category labeled “Nursing Home Sanctions,” and $154,140 over the following two fiscal years under another category titled “Non-St Employee Travel,” comptroller general records show.
The total payments to the Anderson facility were the single-biggest collective amount among at least 10 NHC facilities that received HHS payments over the period, The Nerve’s review found. The Greenville facility received a total of $45,101 in HHS payments in fiscal years 2011 and 2017.
State comptroller records show that NHC facilities, including the Anderson and Greenville facilities, have current state contracts, which according to HHS spokeswoman Colleen Mullis, are for certified nursing assistant (CNA) and feeding assistant training programs.
She did not respond to follow-up questions from The Nerve about payments to the Anderson and other NHC facilities labeled “Nursing Home Sanctions” and “Non-St Employee Travel.”
The NHC facilities are members of the South Carolina Health Care Association, a nonprofit trade association, which according its website, represents “more than 90 percent of the long-term care facilities in the state.”
Brad Moorhouse is listed as an at-large director of the organization’s governing board. White on his 2015 and 2016 SEIs reported receiving small insurance commissions from the “SCHCA.”
Neither Brad nor Bryan Moorhouse responded to phone messages this week from The Nerve seeking comment. J. Randal Lee, president of the state Health Care Association, also didn’t return a call.
In July 2016, Brad Moorhouse presented a $15,000 check on behalf of The Foundation for Geriatric Education, an organization affiliated with NHC, to the Tri-County Technical College Foundation, the college’s private fundraising arm.
White’s wife, Courtney White, works as the director of development for the college foundation.
On his SEI filed earlier this year, White listed 62,254 in “family income” from Tri-County Technical College.
The Nerve in 2014 reported that White had contributed at a total of at least $20,200 in campaign funds since 2008 to the college foundation and an unrelated charitable organization where his wife was a board member.
As the Ways and Means chairman, White oversees the annual budget of the S.C. Technical College System, which provides funding to the state’s 16 technical colleges, including Pendleton-based Tri-Technical College.
Dan Cooper, the immediate past Ways and Means chairman, is currently the director of government relations and economic development at the college, where he has been employed for four years, according to his LinkedIn account and the college’s website.
His annual salary is $101,848, according to the state salary database.
He also currently is the registered lobbyist for the college and two other clients, State Ethics Commission records show. Last year, he reported no lobbying income from the college, though he received a total of $130,000 from four other clients, according to records.
State appropriations last fiscal year to the college totaled about $11 million, a 76-percent jump from fiscal 2011-12 when White took over as the Ways & Means chairman, according to annual college financial statements reviewed by The Nerve.
In fiscal 2017, state appropriations to the college skyrocketed to $16.5 million from $9 million the year before, records show.
In August of this year, the college dedicated a new campus in Westminster in Oconee County.
Contacted this week by The Nerve about his connections to White through Tri-County and his former insurance company, Cooper initially said, “I probably need to call you back,” though he didn’t return the call.
White’s influence at the college extends beyond annual budgets.
Records show he served on the state Joint Bond Review Committee (JBRC) and former Budget and Control Board/current State Fiscal Accountability Authority (SFAA) that approved three separate construction or renovation projects from 2014 through 2016 totaling about $4.2 million.
Meeting minutes from the former BCB and SFAA noted that White recused himself from voting on all three projects, which, according to state Commission on Higher Education records, were recommended earlier by the JBRC.
As the Ways and Means chairman, White controls half of the 10 appointments to the JBRC.
Senate Finance Committee chairman Hugh Leatherman, controls the other half and is the JBRC chairman. Leatherman, a Florence County Republican and the Senate president pro tempore, also serves with White on the SFAA, which routinely approves JBRC recommendations.
The budget process for the 2019-20 fiscal year already is underway, with Thursday of this week as the deadline for state agencies to have submitted their proposed budgets. White’s committee likely will take up the requests when lawmakers return to Columbia in January.
Brundrett is the news editor of The Nerve. Contact him at 803-254-4411 or firstname.lastname@example.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.