FITSNews – March 13, 2007 – S.C. Senate Finance Chairman Hugh Leatherman – a member of the State Budget and Control Board and one of the most powerful men in all of South Carolina government – is improperly disbursing taxpayer dollars from a competitive grants program to purchase his colleagues’ loyalty on key votes, multiple sources have confirmed to FITSNews.

As a result, the South Carolina Competitive Grants program, which is supposed to fund local government and nonprofit projects on the basis of pre-existing criteria, has instead allegedly become what one State Senator called “a slush fund for Leatherman to reward those Senators who support him and punish those who do not.”

“This has been a horrible abuse of power,” said the Senator, who spoke exclusively with FITSNews on the condition of anonymity.
“All politicians love to bring home a little pork but this has gone beyond pork, its bribery.”

The latest available listing of the grants can be viewed here.

According to the Senator who spoke with us, Leatherman collected a list of pet projects from numerous different Senators, with the specific requirement that the individual value of each project total no more than $100,000.

The reason for that specific amount?

Grants of $100,000 or less do not require the approval of the Competitive Grants Committee, and could be authorized by a simple phone call from either Sen. Leatherman’s office or the office of House Ways & Means Chairman Dan Cooper.

“Leatherman got a list of what was near and dear to everyone’s heart and then he used it against us,” the Senator said. “This list has been used repeatedly as a means of garnering support for items in the budget and for other things, including taxpayer dollars going to support higher levels of state spending.”

Last year, the grants totaled $46 million – $23 million for the House and $23 million for the Senate.

“When the checks are printed, they’re not mailed to the applying entity,” the Senator said. “The checks are cut by the Budget and Control Board and delivered directly to Sen. Leatherman’s office, who then takes them to the member for distribution in the district.”

In fact, Leatherman is even alleged to have terminated two of the grants slated for Sen. David Thomas‘ district after the Greenville Senator defied Leatherman on a committee vote.

“There was an issue in committee where Senator Thomas voted against him,” said the Senator who spoke with FITSNews. “Leatherman went up to him and told him ‘the five projects you wanted, two of them just lost their funding. Tell me which two you want cut.’ It was direct retribution for the vote.”

Thomas did not return repeated phone calls seeking comment, but multiple sources have confirmed the substance of the incident to FITSNews.

New Budget and Control Board Executive Director Henry White has issued a temporary hold on the awarding of these grants, but a House budget proviso would effectively restore Leatherman and Cooper’s ability to distribute the grants under the current procedure, which lacks accountability and transparency.

“There’s no scoring, no ranking, no criteria whatsoever,” the Senator who spoke with us said. “The only thing that’ll get a grant funded is a call from the Senate Finance Chairman or a call from the House Ways and Means Chairman.”

Partially in response to FITSNews’ investigative reporting on this subject, Gov. Mark Sanford‘s office singled out the competitive grants in a press release on the state budget issued late Wednesday afternoon.

“We remain very concerned about things like the House’s budget proviso regarding awarding millions of dollars in grants through an unaccountable and not at all transparent process,” Sanford’s statement said. “The House proposal is the exact opposite of what we’ve been pushing for in terms of restructuring, and it creates a real danger of turning this grants process into a legislative favor factory where certain members of the General Assembly would be able to hold sway over tens of millions of dollars and use them for political purposes.”

Mike Shealy, a key staffer to the Senate Finance Committee, declined to comment on the allegations against Leatherman.

Stay tuned to FITSNews for the latest on this breaking political scandal.