Chad Connelly and the SCGOP

Documents and allegations of fraud, waste and abuse come to light in battle for SCGOP Chairmanship

By Paul Gable

Update: Multiple requests to the SCGOP for documentation contrary to that of sources contributing to this investigative story have been denied.

A heated battle for the chairmanship of the South Carolina Republican Party has brought some interesting details to light as the contest enters its final days.

According to sources familiar with the details of the transaction, the SCGOP Executive Committee was asked to approve the transaction after the fact and no records of discussions of the transaction appear in SCGOP Executive Committee meeting minutes.

BBT Mortgage on SCGOP [PDF]

Last week, current SCGOP chairman Chad Connelly and the party were named defendants in a lawsuit alleging Connelly slandered Cherokee County GOP member Brian Frank in an e-mail and during a speech to upstate party members. Frank has been active in supporting Sam Harms, Connelly’s challenger in the upcoming chairman’s election at the SCGOP convention Saturday.

Link to Frank’s complaint [PDF]

An e-mail from Harms claimed he was denied access, by SCGOP headquarters, to the list of county delegates to the state convention from 44 of the state’s 46 counties. Apparently this denial was in the hope that Harms’ campaign for chairman would be hurt by this denial.

An e-mail from Connelly, allegedly endorsed by 90 county party officials and members, claimed to “set the record straight” on Connelly’s record in his two years as chairman. However, while claiming facts about Connelly’s actions while chairman have been distorted by his opponents, Connelly’s e-mail contains its own distortions.

Addressing the election filing disaster last year, Connelly’s e-mail again claims that “new legislation regarding candidate filing was passed which conflicted with existing law, resulting in lawsuits and an unprecedented State Supreme Court decision to throw candidates of both parties off the ballot rather than allowing them to amend their filings.”

There was no change to the election filing law. If new election filing legislation had been passed, it couldn’t conflict with existing law because the new legislation would become existing law. To claim otherwise is absurd.

There was a procedural change with filing the Statement of Economic Interests by candidates with the S.C. Ethics Commission, moving from paper filing to electronic filing. Neither the Republican nor Democratic parties truly picked up on this procedural change, resulting in inaccurate or confusing instructions being given to candidates at both the state and county party level, which ultimately disqualified those candidates from the ballot.

The disqualifications led to lawsuits, which cost money to defend. How those legal bills were to be paid has also come under scrutiny.

Here are the most interesting claims made in the Connelly e-mail:

“they are charging that Chad made the party borrow money and engaged in deficit spending.  THIS IS FALSE!

“In the course of defending our nominees and their ability to get on the ballot, as well as our county party organizations, we had to go to court – which meant legal bills.  The State Executive Committee – not just Chad – discussed and then approved taking out a loan to temporarily cover these expenses so as not to disrupt our plans and resources for the 2012 election.”

The “loan” mentioned above actually turns out to be a $340,000 mortgage against the party’s building and land, which are the assets of the “Republican Trust Building Corporation.” The RTBC was registered with the S.C. Secretary of State as a non-profit corporation in December 2005.

Connelly signed mortgage documents with BB&T in September 2012, in the name of both the S.C. Republican Party and the Republican Trust Building Corporation pledging the assets of the RTBC as collateral for the $340,000 mortgage.

The $340,000 proceeds from the mortgage were listed as a loan contribution to the party on SCGOP public disclosure filings.

The SCGOP and the RTBC are two entirely separate entities, but the assets for one, the RTBC, were pledged as collateral for a loan to the other, the SCGOP, with one person signing for both entities.

Additionally, according to sources familiar with the details of the transaction, the SCGOP Executive Committee was asked to approve the transaction after the fact and no records of discussions of the transaction appear in SCGOP Executive Committee meeting minutes.

The question of who is misleading whom appears to be more unanswered than ever.