Could a South Carolina legislator’s consulting firm help a state agency seek federal grants and then manage the funded program?

Plain-English summary

A representative asked whether a firm he partly owned could prepare a proposal for one state agency seeking federal money from another state agency and manage the program if funded. The July 2001 informal opinion found no absolute statutory prohibition on that arrangement. It said the representative’s private work had to remain apart from his official legislative duties and comply with the State Ethics Act.

The letter identified concrete limits: no use of office to obtain personal gain; no extra compensation for advice that formed part of official duties; and no use or disclosure of confidential official information for the firm’s gain. If official action would substantially affect his or the firm’s finances, he had to submit a written description of the conflict to the House presiding officer and be excused from deliberation, votes and other action on that matter. The AG deferred supervision and findings about a House member’s specific conduct to the House Ethics Committee.

Currency note

This opinion was issued in 2001. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Legislators and their firms

The opinion allowed the proposed consulting work only subject to the cited ethics restrictions. It did not provide an unconditional approval of every grant proposal or management payment.

State agencies and House ethics officials

The letter treated the House Ethics Committee as the supervisory body for a representative under the Act and deferred its assessment of specific conduct.

Common questions

Was legislator ownership alone an absolute bar to the contract? A: The AG said no absolute ban appeared in the cited Act, provided its conflict and financial-gain restrictions were followed.

Could the legislator vote on a matter substantially affecting his firm? A: The letter said he must disclose the potential conflict in writing and be excused from votes, deliberations and other action on the matter.

Did the AG decide that every proposed fee was proper?
A: No. The letter set out statutory limits and deferred specific oversight to the House Ethics Committee.

Background and statutory framework

The opinion cited § 8-13-700 on financial gain and conflict procedures, § 8-13-705 on extra compensation for official-duty advice, and Section 8-13-735 on confidential information. It applied those rules to the proposed grant and program-management work.

Citations and references

• § 8-13-700: financial gain and conflict disclosure.
• § 8-13-705: payment for advice tied to public duties.
• Section 8-13-735: confidential information acquired in office.

Official title

Concerning the activities of a private consulting firm owned in part by a State legislator.

Requester

The Honorable John L. Scott, Jr., Member, House of Representatives

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/july-19-2001-2/
• Original PDF: https://www.scag.gov/wp-content/uploads/2013/11/01july19scott.pdf

Original opinion text

The State of South Carolina

OFFICE OF THE ATTORNEY GENERAL
CHARLIE CONDON
ATTORNEY GENERAL

July 19, 2001
The Honorable John L. Scott, Jr.
Member, House of Representatives
1107 Anthony Avenue
Columbia, South Carolina 29204

RE:

Informal Opinion

Dear Representative Scott,
By your letter of July 12, 2001, you have requested an opinion from this Office concerning the activities of a private consulting firm owned in part by a State legislator. Specifically you ask: Can a state legislator who is partial owner and operator of a consulting firm have this firm write a proposal and assist one state agency in their efforts to secure federal funds from another state agency? Also, if this proposal is funded, can this same consulting firm receive fees while managing the program? Based upon a review of the State Ethics Act, codified at South Carolina Code of Laws Sections 8-13-100, et seq., it appears that there is no absolute prohibition to the proposed arrangement between the State representative' s consulting firm and the writing of a proposal assisting a state agency in receiving federal funds. However, certain provisions of the Ethics Act must be followed to avoid conflicts therewith. In particular, the State representative must avoid the use of his official position or office to obtain financial gain for himself. See S.C. CODE ANN. § 8-13-700. Furthermore, the representative should not solicit or receive any money in addition to that received by him in his official capacity for advice or assistance which would be included in the normal course of the representative's public duties. See S.C. CODE ANN. § 8-13-705. This means that any action taken by the representative must be unrelated to the activities performed by the representative in his official capacity as a State representative. Furthermore, pursuant to the provisions of Section 8-13-735, the representative cannot use or disclose any confidential information gained by him in the course of his official activities in a way that would result in financial gain for himself or for his consulting firm.

REMBERT

c. DENNIS BUILDING

t~~w.~

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POST OFFICE Box 11549

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COLUMBIA,

s.c. 29211-1549

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TELEPHONE: 803-734-3970

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FACSIMILE: 803-253-6283

Representative Scott
Page 2 of2
July 19, 2001

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If the representative is faced with a situation, in the discharge of his official duties, which would require him to take action or make a decision which would substantially affect his personal financial interest or those of the consulting firm, the representative must comply with the provisions of Section 8-13-700. In sum, these provisions require the preparation of a written statement describing the matter requiring action, and the nature of the potential conflict of interest with respect to that action. The statement is to be delivered to the presiding officer of the House, and he shall be excused from votes, deliberations, and other actions on the matter on which a potential conflict of interest exists.

I
I

As long as the representative complies with the restrictions set forth in the State Ethics Act, it appears that the legislator and his consulting firm may enter into the proposed arrangement with the state agency. Furthermore, as you know, the House of Representatives Ethics Committee is the designated appropriate supervisory office under the Ethics Act for State representatives. As this Committee is charged with supervisory enforcement of the Act, we would defer to its findings on the propriety of the activities of House members.

f

This letter is an informal opinion only. It has been written by a designated Assistant Attorney General and represents the position of the undersigned attorney as to the specific question asked. It has not, however, been personally scrutinized by the Attorney General nor officially published in the manner of a formal opinion. With kind regards, I remain Very truly yours,

Susannah Cole
Assistant Attorney General