Sunday, May 23, 2010

GOP official caught breaking SC campaign laws

South Carolina isn't exactly unfamiliar with boneheaded politicians who think they can get away with anything, and it looks like Republican state Treasurer Converse Chellis and his deputy, GOP operative Scott Malyerck, are no different. It seems Chellis and Malyerck visited the Spartanburg Herald-Journal last week to meet with the editors about a possible endorsement in the June 8 primary election. But in a blunder that would make Mark Sanford proud, Chellis may have instead exposed serious violations of state law during his interview with editor Lane Filler:
About 20 minutes into the sit-down, Chellis was summarizing what his agency does on a day-to-day basis. He explained how his agency functions for several minutes, ending with an explanation of what Malyerck's department does, at which point alarms started chiming.
"You work for the Treasurer's Office?" [Filler] asked Malyerck.
Malyerck: "Yes."
[Filler]: "Then what are you doing here?"
Filler was right to be astounded, because Malyerck's very presence at Chellis' campaign meeting violated South Carolina's Ethics Reform Act:
No person may use government personnel, equipment, materials, or an office building in an election campaign. A person may use public facilities for a campaign purposes if they are available on similar terms to all candidates and committees. Likewise, government personnel may participate in election campaigns on their own time and on non-government premises. [emphasis added]
Scott Malyerck obviously qualifies as government personnel, and Filler observed Chellis using Malyerck in an election campaign. After Malyerck gave three different excuses for accompanying Chellis, the Herald-Journal editors determined there was no possible way to justify Malyerck's presence at the campaign event as official treasury business. And as Filler notes, Malyerck seems to campaign for Chellis quite a bit. In fact, it's not really clear what Malyerck does besides campaigning for Converse Chellis.

The Garnet Spy has pointed to possible ethics violations by Chellis and Malyerck in the past, but the Herald-Journal's encounter shows the most flagrant offense by far. Malyerck reportedly spoke on Chellis' behalf at a Lexington County Republicans meeting in early May, and launched several ad hominem attacks at Curtis Loftis, who is running to replace Chellis in the June primary. (Seriously -- I know it was written by a wingnut, but that last link is pretty interesting.) Malyerck is certainly entitled to campaign for Chellis on his own time, but his actions at the Lexington GOP meeting suggest he's simply a Chellis campaign flack -- and his presence at the Herald-Journal interview indicates he's at least partially a taxpayer-subsidized flack.

Researching the backgrounds of this GOP duo (neither of whom were elected, by the way) does nothing to quell suspicions of cronyism and corruption. Chellis was a little-known Republican state representative for nearly a decade before he managed to gain enough support in the State House to replace Thomas Ravenel as treasurer -- you know, after that cocaine incident. Immediately after taking office, Chellis made a deputy treasurer out of Malyerck, who was executive director of the South Carolina Republican Party at the time. What qualified Malyerck, a career politico, for a top job in the state treasury (with a salary even higher than the treasurer's), handling the tax dollars of a state with an already-struggling economy? Well, not much:
In a 2007 interview with political blog SCHotline, [Malyerck] described a career in politics that included stints working on Republican political campaigns in New Hampshire, as executive director of the New Hampshire Republican Party, working for a public relations firm, a trade association, in state government, as executive director of the South Carolina Republican Party and for political campaigns in South Carolina. It is not a resume that would suggest he should be deputy treasurer of South Carolina. [emphasis added]
Malyerck's unimpressive qualifications and undeserved salary aside, playing fast and loose with taxpayer money appears to be nothing new in Chellis' office. Loftis analyzed Chellis' work schedule and found the treasurer worked an average of 13 days a month during all of 2009, and only 13.4 hours a week. And got paid nearly a hundred grand for it.

Of course, the Garnet Spy and SCHotline both seem to have bit of a hit out on Chellis (not to mention FITSNews), and Loftis definitely does. And I admittedly have no idea who "Workin' Tommy C" is. But the bottom line is, it's pretty clear that if the Herald-Journal's allegations against Malyerck and Chellis are true, serious ethical and legal violations are taking place in the state treasurer's office -- and recorded conversations are pretty reliable.

Filler sums it up best:
Malyerck's presence at our meeting was a clear violation of state ethics laws, and his manner in the meeting indicated that assuring Chellis' re-election is most of what he does. The fact that the taxpayers are giving him $117,160 per year, at least in part to help Chellis run, is disgusting and unethical. The fact that he offered three different justifications as to why he accompanied Chellis was ridiculous. The fact that Chellis felt no need to comment on the issue when we were questioning the men at our office was telling. How important is it? That's for you to decide on June 8. [emphasis added, emphatically]
So, Treasurer Chellis, still waiting on that endorsement?


  1. Wow...for a state Treasurer to watch and listen to his deputy lie is incredible. I have been following this race and even I did not see that coming.
    Chellis has been having a hard time of it. Loftis said the treasurer’s office has not been audited in FY 2009. Chellis says it has, but has not produced the audit in over 2 months.
    Loftis says Chellis works 15 hours a week. Chellis says he works 60 hours and can prove it. But in 45 days he has not produced one record showing he works more than the 15 hours (for $92,000 a year)
    The guy is a fraud, given his job by his buddies in the general assembly.
    The people need to take it away from him on June 8th

  2. The State Auditor reports to the Budget and Control Board, creating an inherent conflict of interest in that one of the five members is the State Treasurer.

    The State Treasurer’s office under Converse Chellis has never been audited either by the State Auditor or the Legislative Audit Council. It is unknown whether the State Treasurer’s office has an “internal auditor” as do other state entities such as MUSC, the SPA, DHEC, et cetera. Fraud, waste and abuse in the Treasurer’s office seems to be kept “in house” as it was with the State Highway Commission, until brought to the public’s attention by newspaper reports. Apparently Mr. Loftis intends to change this with greater transparency.

    Regarding “audits” of the Treasurer’s Office, what Mr. Loftis say is true.

    Details are below.

    The State Auditor’s web site, listing all state enties audit alphabetically, caan be found here:{1E4C1A92-7A75-4548-98BF-D00102183D5C}&NRORIGINALURL=/statereports/&NRCACHEHINT=NoModifyGuest#T

    Clicking on “State Treasurer,” the visitor is taken here:
    At this site, one can click on one of three hyperlinks to three .pdf files:

    see next blog.

  3. (posting continued)

    1. Annual “Agreed-Upon Procedures,” a 34-page evaluation of the “South Carolina Local Government Investment Pool,” signed August 25, 2009, by Rogers Laban, PA, CPAs, under contract for the S.C. Office of State Auditor. This report concerns the management of the “pool” of investment funds under management by the State Treasurer’s office. It basically says that nobody stole money from any of the investment accounts during the year. It is extremely limited in scope regarding ANYTHING ELSE, stating:

    “As described in Note 1, the financial statements referred to above include only the financial activities of the Pool, an investment trust fund of the State of South Carolina, and do not purport to and do not, present fairly the financial position and results of operations of the State Treasurer's Office, the State of South Carolina or other agencies or component units of the State of South Carolina in conformity with accounting principles generally accepted in the United States of America.”


    “We were not engaged to and did not conduct an audit, the objective of which would be the expression of an opinion on the specified elements, accounts, or items. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.”

    2. Annual “Independent Accountants’ Report on Applying Agreed-Upon Procedures, S.C. Office of State Treasurer,” signed May 28, 2009, by The Hobbs Group, PA, CPAs, a 7-page letter reporting on eight specific “procedures and findings” that are described thus: “solely to assist you in evaluating the performance of the Agency for the fiscal year ended June 30, 2008, in the areas addressed. The Agency's management is responsible for its financial records, internal controls and compliance with State laws and regulations. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the specified parties in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.”

    This CPA firm reminds the readers:

    “We were not engaged to and did not conduct an audit, the objective of which would be the expression of an opinion on the specified elements, accounts, or items. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.”

    3. “Financial Statements.” See Three others are listed, for 1999 and 1998. The FY 2000 “Financial Statement” is 13 pages long, and signed and dated October 3, 2000 by Deloitte & Touche LLP. These are the same Annual “Agreed-Upon Procedures” mentioned in (1) above.

    Again these (1), (2) or (3) are NOT AUDITS.

    Mr. Loftis knows of what he speaks.

  4. Mr. Chellis is running the nastiest campaign in modern history.
    Let us pray that the people see it for what it is...a smear campaign bent on destroying a person in order to keep his office.

  5. Ambassador David Wilkins is the head of the Chellis campaign. He should be ashamed of himself for being a part of such a dirty campaign.

  6. Chellis seems to say nothing. He just repeats his Citadel mantra that he doesn't lie cheat or steal or countenance those who do. In supporting Malyerck he clearly violates that oath too. Both are willing to do anything to keep do nothing, easy street state retirement jobs. Their attacks on Loftis are despicable. They reflect a desperation that no office is worth. Too bad neither Chellis nor Malyerck has any interest in the people. Wilkins and others have allowed their names to be used to perpetuate their good ol boy roles in the status quo. They all, as part of the establishment, have their hands in the Chellis cookie jar. I have no doubt that Loftis will bring meaningful, positive change for the State and am encouraging everyone I know to vote for him. It is truly time to throw the bums out.

  7. I, of course, a newcomer to this blog, but the author does not agree