2009-01-22T22:17:00.000-08:00

"Vouchers are not an end in themselves; they are a means to make a transition from a government to a market system … I sense that we are on the verge of a breakthrough in one state or another, which will then sweep like a wildfire through the rest of the country…"

- Milton Friedman, Public Schools: Make Them Private (1995)

UPDATE: For information about Howard Rich's influence on South Carolina's 2008 elections, see the new Buying South Carolina website.

Who is Howard Rich?

Howard Rich, 67, is a libertarian political activist and real estate developer in New York City. A director of the pro-voucher Friedman Foundation, Rich has used his vast personal wealth in an effort to build a state legislature in South Carolina that will support his plan to divert public money to private schools through school vouchers and tax credits.

Howard Rich's involvement in South Carolina politics involves three main prongs:

1. Bypassing state contribution limits by using numerous LLC's to fund political candidates in local races.

2. Funneling even more money into SC campaigns from Pennsylvania, New York, and elsewhere through a network of wealthy associates.

3. Establishing and funding "grass-roots" voucher lobbying groups in South Carolina to give the appearance of support for his agenda in our state.

Howard Rich's substantial involvement in South Carolina politics and the methods used to support his private school voucher plan have profound implications for South Carolina's government, our public schools, and the integrity of our state’s political processes.

Bypassing Contribution Limits

Individual contributions to political candidates in South Carolina are limited to $3500 for statewide offices and $1000 for State House candidates per election cycle. However, there is currently no provision in South Carolina's ethics laws to prevent the owner of several closely held corporations from making maximum contributions to a single candidate from each entity under his control.

To leverage his influence on South Carolina elections, Howard Rich contributes through numerous entities he owns or controls. To illustrate this funding scheme, here are actual figures from some of the pro-voucher candidates who accepted contributions from multiple entities controlled by Rich in the 2006 elections:

Mark Sanford – Gubernatorial candidate (won)
123 Lasalle Inc. - $3,500
4220 Broadway Inc. - $3,500
4220 Broadway LLC - $3,500
405 49 Associates - $3500
123 Lasalle Assoc. - $3,500
Spinksville LLC - $3,500
Rosemeade Investors LLC - $3,500

Karen Floyd – Supt. of Education candidate (defeated)
Ashborough Investors - $3,500
Spinksville LLC - $3500
West 14 & 18 LLC - $3500
Spooner LLC - $3500
405 49 Associates - $3,500
538-14 Realty, LLC - $3,500
Silver & Silver Properties, LLC - $3,500
123 LaSalle Associates - $3,500
123 LaSalle, Inc. - $3,500
Bayrich, LLC - $3,500
Dayrich, LLC - $3,500
Bradford Management of NY - $3500
405 49 Associates - $3500
Ashborough Investors -$3500
Spinksville LLC - $3500

Kit Spires - Legislative Candidate (won)
Spinksville LLC - $1000
14-18 West LLC - $1000
123 Admiral Inc [sic] - $1000
Ashborough LLC [sic] - $1000
538-14 Realty LLC - $1000
4220 Broadway Inc. - $1000
Silver Associates [sic] - $1000
405 49 Associates - $1000
Dayrich Inc. [sic] - $1000
Vanguard Spooner LLC - $1000

Sheri Few - Legislative Candidate (lost)
123 LaSalle Associates: $1,000
123 LaSalle Inc.: $1,000
Bayrich LLC: $1,000
Dayrich LLC: $1,000
Ashborough Investors: $1,000
Spinksville LLC: $1,000
Spooner LLC: $1000
405 49 Associates: $1000
Bradford Management of NY: $1,000
Silver & Silver Properties LLC: $1,000
West 14 & 18 LLC: $1,000
538-14 Realty, LLC: $1,000

Mick Mulvaney - Legislative Candidate (won)
West 14 & 18 LLC - $1000
Howard Rich - $1000
Ashborough Investors LLC - $1000
538-14 Realy LLC - $1000
123 LaSalle Associates - $1000
Bradford Management of New York - $1000
Spinksville LLC - $1000
Silver & Silver Properties - $1000
405 49 Associates - $1000

Michael Letts - Legislative Candidate (lost)
Howard Rich: $1000
123 LaSalle Associates: $1,000
Ashborough Investors: $1,000
Spinksville LLC: $1,000
405 49 Associates: $1000
Bradford Management of NY: $1,000
Silver & Silver Properties LLC: $1,000
West 14 & 18 LLC: $1,000

Jim Harrison - Legislative Candidate (won)
Ashborough Investors LLC - $1000
West 14 & 18 LLC - $1000
Bayrich LLC - $1000
538-14 Realty LLC - $1000
Bradford Management Inc - $1000
405 49 Associates - $1000
Silver & Silver Properties - $1000
Spinksville LLC - $1000
123 LaSalle Associates LLC - $1000

Suzanne Piper – Legislative Candidate (lost)
123 LaSalle Avenue, $1000
405 49 Associates, $1000
Bradford Management of NY Inc. , $1000
Spinksville LLC, $1000
Silver & Silver Properties LLC, $1000

Kris Crawford – Legislative Candidate (won)
405 49 Associates, $1000
Silver & Silver Properties LLC, $1000
Spinksville LLC, $1000
123 LaSalle Inc., $1000
Bradford Management of NY Inc., $1000

Mark Willis – Legislative Candidate (lost)
West 14 & 18 LLC, $1000
Spooner LLC, $1000
538-14 Realty LLC, $1000
Bradford Management of NY Inc., $1000
Ashborough Investors, $1000

Danny Stacey – Legislative Candidate (lost)
538-14 Realty LLC, $1000
Spooner LLC, $2000
Spinksville LLC, $1000
Bradford Management of NY, $1000
Ashborough Investors, $1000
405 49 Associates, $1000

Tracy Edge – Legislative Candidate (won)
538-14 Realty LLC, $1000
Ashborough Investors, $1000
Bradford Management of NY Inc., $1000
405 49 Associates, $1000
Howard Rich, $1000

Phillip Lowe – Legislative Candidate (won)
Bradford Management of NY Inc., $1000
405 49 Associates, $1000
123 LaSalle Associates, $1000
Howard Rich, $1000
Silver & Silver Properties LLC, $1000

In total, Howard Rich contributed over $200,000 through this funding scheme to South Carolina political candidates in 2006.

Rich’s Out-of-State Voucher Network

NYC millionaire Howard Rich is SC’s single biggest special interest, all by himself. But Rich also uses his associates at US Term Limits, Americans for Limited Government, the PIC Foundation, and elsewhere to funnel even more out-of-state campaign cash into small-town SC legislative races.

Here are the unbelievable figures from Howard Rich’s network of associates in 2006:

Joseph Stilwell
New York, New York
Director, US Term Limits (President: Howard Rich)
Funds to SC Voucher Candidates, 2006: $37,500

Mark W. Dane
New York, New York
PAC Treasurer, US Term Limits (President: Howard Rich)
Funds to SC Voucher Candidates 2006: $29,000

Eric/Donna Brooks*
Bala Cynwyd, Pennsylvania
Director, PIC Foundation (Chairman: Howard Rich)
Funds to SC Voucher Candidates, 2006: $83,000

Jim Doughan*/Allison Bischoff
Bala Cynwyd, Pennsylvania
Director, PIC Foundation (Chairman: Howard Rich)
Funds to SC Voucher Candidates, 2006: $25,500

Doug Levine
Miami Beach, Florida
Director, PIC Foundation (Chairman: Howard Rich)
Funds to SC Voucher Candidates, 2006: $34,500

Paul Farago
Portland, Oregon
Director, Americans for Limited Government (Chairman: Howard Rich)
Funds to SC Voucher Candidates, 2006: $16,000

David Vanderveen
Laguna Beach, California
Director, Americans for Limited Government
Funds to SC Voucher Candidates, 2006: $22,500

Jeff/Janine Yass*
Bala Cynwyd, Pennsylvania
Board Member, CATO Institute (Director: Howard Rich)
Funds to SC Voucher Candidates, 2006: $55,500

Yvonne Rich
Mountain Home, Arkansas
Board Member, Colorado At Its Best (Founder/Director: Howard Rich)
Funds to SC Voucher Candidates, 2006: $16,000

Joseph Rich
New York, New York
Funds to SC Voucher Candidates, 2006: $17,500

Kermitt Waters
Las Vegas, Nevada
Tax and Spending Control for Nevada
Funds to SC Voucher Candidates, 2006: $37,500

Paul Jost / Chandler Management
Williamsburg, Virginia
Chairman, Virginia Club for Growth
Funds to SC Voucher Candidates, 2006: $19,500

* Jeff Yass and Eric Brooks are directors the Susquehanna Foundation, which gave $400,000 to Rich's Legislative Education Action Drive in 2004 and $300,000 to Rich's PIC Foundation in 2005. Other serial contributors to SC voucher candidates on the board of directors of the Susquehanna Foundation include:

Arthur Dantchik, Bala Cynwyd, PA: $39,000
Andrew Frost, Bala Cynwyd, PA: $10,500

Buying South Carolina

By using the "LLC Loophole" and his network of out-of-state associates, Howard Rich is able to exert tremendous financial influence on smalltown South Carolina races. The 13 House districts highlighted in red below represent districts whose lawmakers received at least $10,000 in funding from Howard Rich and friends in 2006. As illustrated, some of these lawmakers were predominantly bankrolled by out-of-state voucher money.

Some unsuccessful State House candidates were funded almost entirely – up to 99.8% – by Howard Rich and his network of wealthy associates. In the map below, the 8 yellow districts represent areas where at least $10,000 was funneled into the campaign of an unsuccessful pro-voucher candidate by Rich and his associates.

Howard Rich's overarching strategy is clear: to target lawmakers who oppose his voucher bill, recruit candidates to run against these lawmakers, and then fund the campaigns almost entirely from outside sources. It's a complicated scheme, and Rich cannot do it alone from New York City. He needs operatives inside the Palmetto State.

*****
2008 Update: For information about Howard Rich's influence on South Carolina's 2008 elections, see the new Buying South Carolina website.

*****

Rich's Voucher Lobbying Groups in South Carolina

South Carolinians for Responsible Government

In 2003, a voucher lobbying group called “South Carolinians for Responsible Government” was registered with the Secretary of State by Todd McCauley, then a field representative for Howard Rich's "U.S. Term Limits" organization. (McCauley was replaced as president of SCRG in 2005 by Randy Page, after sending several letters to the editor of The State newspaper under a false name.)

SCRG's earliest tax filing (pictured) listed the Chicago telephone number of U.S Term Limits as its own. The group's website, prior to December 2006, was registered to "Americans for Limited Government," an entity chaired by Howard Rich.

According to tax records, SCRG received over $1.0 million in funding in 2005, and an additional $3.0 million in 2006.

SCRG filed a lawsuit against the State Ethics Commission in 2006 to keep its financial backing a secret. Although the suit was thrown out in November 2006, SCRG has yet to disclose the origin of this funding.

South Carolina Club for Growth

Howard Rich is director of a national organization called “Club for Growth State Action,” which oversees and supports seven state affiliates, including the pro-voucher South Carolina Club for Growth.

The SC Club for Growth’s executive director has stated that "public education is welfare.” Another member of the SC Club for Growth’s board, Karen Iacovelli, was a signatory of a pledge stating, "I publicly proclaim that I favor ending government involvement in education,” the oath of the California-based "Alliance for the Separation of School and State. " Iacovelli is a former member of the state Education Oversight Committee, an appointee of Governor Mark Sanford.

The South Carolina Club for Growth contributed $18,000 to the campaigns of pro-voucher candidates in 2006.

Voucher Lobbying Groups Targeted at African-Americans

From 2004 to 2006, three voucher groups targeted at African-Americans were formed in South Carolina: the SC Center for Grassroots, Clergy for Educational Options, and the Southern Association of Independent Black Schools. According to the Secretary of State's Office, all three of the groups were formed from the same address (1620 Gervais Street Suite B, Columbia, SC) which was the address of South Carolinians for Responsible Government.

Currently, South Carolinians for Responsible Government, the South Carolina Club for Growth, and the Center for Grassroots share an office at 3020 Devine Street, Columbia.

Rich's "grass roots" groups in other states

1. In Oklahoma, Rich has spent over $1 million on initiatives championed by two local groups, Oklahomans in Action and Oklahomans for Good Government. The president of Oklahomans in Action, which received 97% of its funding from Rich's Americans for Limited Government, was indicted in October 2007 on two felony counts: conspiracy to defraud the state and filing a fraudulent initiative petition.

2. In Missouri, Rich funneled $2.9 million towards initiatives that were thrown off the ballot in 2006 for non-compliance with state law. Actual Missourians contributed only $150 to the ballot initiatives. Missourians In Charge, the group established to support the measures, was dissolved in early 2007.

3. In Montana, Rich’s initiatives were rejected from the ballot due to "pervasive fraud" in the signature gathering process. Montanans in Action, the group established to support the measures, has refused to disclose its funding and is currently under investigation by the Montana attorney general.

4. In Louisiana, Rich in 2007 established "Lousianans in Action," a political action committee used to direct money from his various LLC's to pro-voucher forces in that state. Like in South Carolina, these LLC's have been used to circumvent established individual campaign contribution limits.

What you can do

Vote. Use the State Ethics Commission Website to see who is funding statewide candidates, and use the National Institute for Money in State Politics for legislative candidates. Encourage others to do the same.

Write your legislator. Ask him or her to close the loopholes through which Howard Rich is trying to buy the Palmetto State’s political process. Ask your lawmaker not to violate the intent of our campaign laws by accepting multiple maximum contributions from a single person through the "LLC loophole."

Pass this along. Copy this internet address and forward it to your friends and family.

Write a letter to the editor. Most newspapers offer a quick, easy link to submit letters electronically. Let others know about this attempt to buy the political process here in South Carolina.