
          Government in South_Carolina: Taking Care of Business
          By Walser, JimJim Walser
          Vol. 6, No. 3, 1984, pp. 3-13
          
          State Senator Tom Smith was angry--and the South_Carolina General
Assembly was about to discover the reason.
          It was February of 1983, weeks after the South_Carolina House of
Representatives began debating a plan designed to cut sharply rising
homeowner property taxes, reform the state income tax system (one of
the most regressive in the nation) to make the rich pay more, and send
some financial help to the state's eleven-hundred public_schools, then
taking a public flogging for producing the lowest average scores in
the nation on the college-entrance Scholastic Aptitude Test.
          Designed by Governor Dick Riley as the cornerstone of his new
second term, the tax package died quickly in the House.
          One reason--perhaps the major reason--for the derailment of the
package was the South_Carolina Chamber of Commerce, a high-profile
coalition of over eighteen-hundred state businesses and 3,700
individuals with an annual lobbying budget of over one-million dollars
a year.
          Weeks earlier, on the eve of the House debate, Chamber officials
warned that Riley's plan would frighten new businesses away from South
Carolina and prevent current ones from expanding. According to the
Chamber, a 1982 Harvard-MIT study proved that "relative tax burdens"
are the "single most important consideration in decisions (of
industries) to relocate from the Frostbelt to the Sunbelt." Lowering
homeowner property taxes, the Chamber concluded, would shift the
property tax burden back to industry. And higher property taxes for
industry would cost the state new business, jobs, and prosperity in
the 1980s.
          It is an argument that is heard a great deal across the South today
as highly financed and organized business coalitions fight unions,
pro-worker legislation and higher corporate taxes, attempting to carve
out a more profitable business environment in Southern_states which
are increasingly pitted against one another in recruiting out-of-state
industry.
          But on this occasion, Smith, a sharp, forty-five-year-old, drawling
Pamplico, SC, farmer-lawyer with a few populist tendencies, rose in
the wreckage of House debate to call the Chamber's bluff.
          "We have been lied to," Smith announced to a hushed Senate. "For
the past many weeks, the Chamber has attempted to stampede the members
of this General As-

sembly into making serious decisions based on bad
and false information."
          Smith produced a letter from the author of the Harvard tax study,
Rober W. Schmenner, who said "tax incentives for industrial location
are not the most important" factor in industrial relocations."
          "The Chamber of Commerce is doing a grave injustice to the people
of South_Carolina, " said Smith. "It has put us in a very, very bad
light . . . (and) . . . has sowed seeds of dissension and confusion
among this state's citizens by sending a message across this nation
which interferes with tour industrial development."
          Responded Chamber executive vice president Lowell Rease to Smith:
"For a politician to be calling the Chamber of Commerce a liar is like
a frog calling us ugly."
          Government in South_Carolina is undergoing a change in command--a
subtle but significant realignment of power that is altering the way
the people's business gets done.
          Dominated for decades by a small band of rural potentates sent to
Columbia to operate a bare-bones government whose main purpose was to
perpetuate a segregated society, these days the sessions of the SC
General_Assembly sound more and more like corporate board
meetings--replete with executives, their lobbyists, and a
what's-good-for-business theme rippling through debate on nearly every
piece of legislation.
          Gone are the days when patriarchs like former State Senator Edgar
Brown of Barnwell, the thirty-year (1942-72) chairman of the Senate
Finance Committee, ran state] government like it was a personal
checkbook - frugally, with little advice and no consent.
          And with the passing of Brown and his successor as Senate President
Pro Tempore, Marion Gressette, in March, new forces are moving into
the somewhat chaotic breach.
          Chief among those forces is the state's business cartel, using
money, wall-to-wall lobbying, and a unity of influence that some
legislators say borders on political blackmail in a small, poor,
mostly agricultural state where forty years ago there was hardly any
business at all, a state hungry for jobs and eager enough to accept
just about any kind.
          The governmental objectives of these business-and. banking
interests are simple, succinctly stated in the 1983 editions of
South_Carolina Business, the Chamber's annual
magazines: "Avoid bad legislation; maintain a union-free environment;
reduce health_care costs."
          What has made it easier for business to establish a beachhead in
South_Carolina is an almost complete absence of any organized
opposition from unions, consumer, or civil 

rights organizations.
          Most consumer activist groups have long-since vanished in the
state, or, like the local branch of Common Cause, operate on lean
budgets which limit public visibility and impact. Some antinuclear
groups, including the Palmetto Alliance, the Grass Roots Organizing
Workshop, and the new SC Energy Research Foundation, have won some
court battles over environmental safety at nuclear power plants and
the federally-owned Savannah River defense plant near Aiken. But the
impact of consumer and environmental groups is rarely felt inside the
capitol dome on a day-today basis.
          Women's groups, punctured by the Senate's 1978 decision to scuttle
the proposed Equal Rights Amendment, have a low profile in the General
Assembly. Some women do hold key policymaking roles in more
traditional lobbying vehicles, such as the eighteen-thousand member SC
Education Association, a teachers' group. Other women's groups
organize primarily around single pieces of legislation. Recently,
Sistercare, a Columbia-based women's shelter, has lobbied with some
limited success on domestic violence legislation. But as one
legislative organizer said, "There's no umbrella organization of
women's groups and it really limits the effectiveness of lobbying
women's issues."
          Civil rights organizations seem more concerned with electing more
black members of the General_Assembly than affecting specific
legislation. That's an understandable concern in a state where leaders
have apportioned blacks out of the legislature for decades, with a
succesion of county-wide and multi-member district plans limiting
black elective chances.
          Currently, only nineteen of the state's 124 House members and only
one of the state's forty-six senators are black. That should change
later this year, when the Senate's long battle to reapportion after
the 1980 census is heard in a Washington courtroom. The state NAACP
and others are seeking to carve out as many as nine majority-black
Senate districts, though even in the best of circumstances only four
or five of those districts would meet the accepted threshold of being
truly winnable for black candidates. Only 325,000 of South_Carolina's
596,000 voting-age blacks are registered--and even registered blacks
tend to vote in lower percentages than white voters in the state.
          Black legislators optimistically predict that even four or five
black senators would alter the dynamics of moving social and
progressive legislation through the General_Assembly.
          "A lot of times you will find that the Senate will kill things the
House has passed," said John Matthews, a House member and chairman of
the Legislative Black Caucus. "Check the record and you'll find that
most issues that have a direct impact on minorities are brought up in
the House. I think when you get five or six members (of the Senate)
who will speak up for minority issues, you'll find a new
sensitivity."
          Other observers, including some white legislators sympathethic to
minority causes, aren't so sure. They cite votes when the black caucus
was unable to agree, even on such emotionally charged issues as
removing the Confederate flag from the House chamber. Others say
blacks are susceptible to pressure from business groups, too, since
many represent rural areas where the resident industry carries even
greater clout than those in urban areas.
          Nearly 93,000 South Carolinians belong to labor unions, but that is
the least percentage (7.896) of any state's workforce in the
nation. Frustrated labor organizers are simply trying to survive in an
atmosphere where the instruments of finance, the press--and,
increasingly, government--lie in the hands of a small group of
textile, banking, and manufacturing executives.
          "It seems labor organizations always are a whipping boy for some of
the politicians," says Randy Kiser, twenty-nine, the young president
of the South_Carolina AFL-CIO. "It makes good headlines and
propaganda, especially if not many of the voters are unionized."
          While a succession of SC governors has boasted how the hundreds of
new factories and plants have radically altered 

the makeup of the SC
economy in the last two decades, the surge of building, development
and progress has nevertheless left the state forty-eighth in the
nation in per capita income and as high as fiftieth in many health and
quality-of-life statistics. While business complains about corporate
income and property taxes--and actively seeks to elect a General
Assembly full of representatives pledged to curtail them - the state's
public school system is one of the nation's poorest: forty-seventh in
per-pupil spending, forty-fourth in teacher pay, and forty-sixth in
adult illiteracy.
          "There's a lot of bragging all about how we don't need unions and
we've never had unions," says Kiser. "But in the figures we're always
coming up on the bottom."
          From their finely appointed offices in a downtown Columbia
high-rise bank building, the staff and corporate sponsors who run the
South_Carolina Chamber of Commerce can oversee the architectural heart
of state government.
          From there on the fifth floor they can view the nineteenth century
Roman Corinthian State House, where metal stars mark the spots
Sherman's cannon balls bounced off the walls over a hundred years ago,
and where, inside, legislators launch government policies that alter
the political landscape. Beyond the State House, the vista is dotted
by a half-dozen new concrete-and-steel state office buildings, named
after a succession of rural political barons--Brown, Blatt, Gressette,
and Dennis--who once ruled the state with virtually unchallenged
authority. There, thousands of state employees stoke South_Carolina's
governmental engine.
          To many South Carolinians, the Chamber of Commerce's vantage point
is more than fitting symbolism.
          Many legislators and political observers now consider the Chamber
of Commerce, its corporate clients, its local branches, and the broad
business establishment it represents much more than just another
lobbying group.
          Nobody agrees more with the assessment of a rising business role in
government than the born-again free enterprisers who run the Chamber
of Commerce itself.
          "Without any question, I think the state Chamber reached the
heights of its political influence in the state," executive vice
president Reese says proudly of last year's business effort to
convince the General_Assembly to kill Riley's package. "Business did
have a significant role in the whole debate and it turned out
favorably for us. Members got involved to a great degree. I feel like
we had a great impact."
          To many, the wave of businesses and manufacturers arriving in the
state since World_War_II--united under the banner of the state Chamber
and the closely allied SC Textile Manufacturers Association--is now
the fourth branch of government in South_Carolina.
          Though unelected and prone to conduct most of its business in
private, the new branch is not necessarily the fourth most powerful,
either.
          After all, South_Carolina is a state where author V.O. Key writing
in Southern Politics, called the governor "little more
than a ceremonial chief of state." Later, authors Jack Bass and Walter
DeVries, updating Key in The Transformation of Southern
Politics, dismissed the state Supreme 

Court as "an
institutional defender of the status quo," elected by and consisting
wholly of former legislators.
          For years, as those authors noted, power in South_Carolina resided
in the all-white, all-male Senate, where a collection of
near-dictators ruled with the help of the most strictly
seniority-based system of government in the South.
          But in the last twenty years, changes have swept the Senate. The US
Supreme_Court's one-person, one-vote rulings and subsequent
reapportionment forced an end to the one-senator-per-county
system. Home rule stripped the senatorial power to control load
budgets and the subsequent loss of patronage and authority hurt
senators' prestige. Some of the older senators died, and others were
defeated for re-election. By the 1970s, federal aid flowing to state
agencies, with the money governed by federal guidelines, stripped away
another layer of senatorial influence. Finally, rules changes inside
the Senate, forced by younger senators and outside pressures, somewhat
loosened the iron grip of seniority.
          These days, the SC Senate isn't what it used to be--for better or
worse.
          Three or four senators still hold disproportionate influence, but
there are days when even members of the Senate--like poor Tom
Smith--wonder aloud who is running the governmental show in South
Carolina.
          For years, there was little question. Even into the early 1980s,
Senate President Pro Tem Marion Gressette of tiny Calhoun County and
Senate Finance Committee Chairman Rembert Dennis of rural Berkeley
County near Charleston, himself the son of a state senator, remained
the two most powerful legislators. Gressette was elected to the SC
House in 1924 and to the Senate thirteen years later. Beginning in
1953, the Senate Judiciary Committee he. chaired became know as
"Gressette's Graveyard," a reference to the chairman's inclination for
killing bills--especially progressive ones. Gressette was credited
with almost singlehandedly stopping passage of the Equal Rights
Amendment in South_Carolina. Dennis's Finance Committee rewrites the
appropriations bill when it arrives from the House each
spring. Senators with pet projects pending in the appropriations bill
are rarely inclined to confront Dennis on other issues. Dennis,
sixty-five, is now the Senate President Pro Tempore.
          "Cronyism, and that's the popular word for it, is a fact of life in
everything we do up here," says Smith. "We're a small state. The
financial power and the business power is within a mile, almost, of
this State House, and the university (the University of South
Carolina) too. Because we are so small everybody knows everbody. They
all went to the same school together, that kind of stuff."
          But many legislators and observers consider the days of aging
symbols like Dennis numbered. Single-member district representation is
coming to the SC Senate, after decades of legislative and court fights
to avoid it, including a current confrontation with the US Justice
Department to limit the number of majority-black Senate
districts. (See Southern_Changes, May/June, 1983.) That
fight might not be decided in time for the 1984 elections, but almost
any resulting plan will guarantee at least five or six blacks in what
was the South's last all-white legislative body until late 1983--when
longtime civil_rights activist I.D. Newman won a Senate seat in a
special election.
          There are predictions and talk that the new 1985 Senate will throw
out the seniority system Gressette and his allies worked decades to
preserve. And, finally, there is age. Gressette, in poor and declining
health for years, died on March 1, flashing a new tremor through the
foundations of the Senate.
          Ironically, it was the irascible Gressette, of all people, who
stood between the state's business community and one of its most
prized goals--a constitutional amendment to severely limit the future
state spending and taxation. The off-shoot of anti-tax sentiments in
high-tax states such as California and Massachusetts, the spending
limit was considered by Gressette as an intrusion by business
interests into the affairs of government. Gressette didn't mind

telling business leaders to butt out.
          "We just don't need that set in concrete," Gressette said before
his death. "The General_Assembly is capable of approving a balanced
budget. It always has."
          Over five years, Gressettee repeatedly frustrated attempts to pass
the amendment, which had as many as ninety co-sponsors in the House,
after intense lobbying by SC businesses.
          This year the spending limits bill is back on the General
Assembly's agenda. With Gressette gone, and the Senate's decades of
prestige teetering from outside forces, South_Carolina's business
community rests in an unparalleled position to move into the
vacuum. Already, the line between what's-good-for-government and
what's-good-for-business is becoming less and less distinct in South
Carolina.
          "My impression is that with any major legislation, such as the
sales tax package, there are certain people in the state you've got to
run it by," says Smith. "The Chamber group in the Bankers Trust
building. The (former Gov. Robert) McNair law firm (also located in
Bankers Trust). People of that nature. The business community is very,
very powerful. There isn't any question about it. Maybe that's good,
but it's a fact."
          By mid-1983, Gov. Dick Riley, had certainly reached a similar
conclusion.
          As Riley began preparing a new education-improvement package and
considering ways to get it through the 1984 General_Assembly, his
first steps were aimed at locking down business support. He courted
corporate executives over lunch at the Governor's Mansion, stalked out
new Chamber president John Huguley, a Charleston businessman, and
attended a series of business conventions specifically to push the
need for improving the state's eleven hundred public_schools--and the
advantages such improvement afforded business.
          "We have done less to increase the funding of education than any
other southern state except Alabama," Riley told the Textile
Manufacturers Association last May. "Florida and North_Carolina,
states which we compete against for economic_development, are in the
process of launching major new funding initiatives for education. And
they already spend $15,000 more per classroom than we spend in South
Carolina."
          Later in 1983, Riley appointed a select committee to draw up a
blueprint for improving South_Carolina's schools and another committee
to recommend the ways to pay for it. He loaded both committees with
business executives and bankers, naming Greenville businessman Bill
Page as chairman. By November, the committees recommended a $210
million program which featured teacher pay increases (the state pays
teachers less than all states except one), remedial programs for the
state's 200,000 below-average students, and a statewide building
program to improve school facilities in the most impoverished
districts.
          Deep in the plan, however, were attempts to appeal to the
free-enterprise, results-oriented inclinations of the management
representatives on the committees. There was the expected talk about
merit-pay for "better" teachers, which many teachers and school
professionals consider little more than a public relations gimmick. A
particularly interesting twist was pushed by some businessmen on the
panel: cash bonuses for schools where students perform well, and
incentive programs for teachers and even students to earn cash bonuses
for good work. Finally, after months of cajoling from Riley, the state
Chamber endorsed the one-cent sales tax increase in early 1984--but
only if no other realistic way could be developed to pay for school
improvements. The SC Textile Manufacturers Association disagreed with
that conclusion, and worked actively against the plan. But the
influence of the Chamber's endorsement helped push the 1984 bill
through the House. It awaited passage in the Senate in late May.
          
          Charlie Daniel would have wanted it this way.
          Daniel, the Greenville construction magnate who built his firm an
international reputation, was probably the first SC businessman to
understand the value of a legislature that would help--not hinder,
meddle, or tax--private business.
          "To Daniel's way of thinking," wrote Fortune
magazine in October, 1954, "the greatest weakness of the northern
states was that their governments were either hostile to industry,
taxing it unfairly, or indifferent to its welfare. In the South,
particularly in South_Carolina, there was no hostility to business,
and the tax situation was generally favorable to it. What Daniel was
anxious to see, however, was a South_Carolina government conspicuously
friendly to industry, aggressive in working to bring in new business,
and capable of inspiring business with confidence in its
stability."
          In the wake of World_War_II and Korea, Daniel and others set about
to get rid of what they called "jackleg" delegates to the legislature,
to put into office men who knew the value of good government, who
would create the proper blend of regulation and taxes. Usually, that
meant less of both.
          The results came swiftly in the mid-1950's: a "right-to-work" bill
to discourage unionism, a three percent retail 

sales tax to pay for
schools (replacing a property tax which put much of the burden on
industry), tax exemptions for manufacturing equipment, rescinding a
franchise tax on out-of-state corporations, and outlawing blue laws
prohibiting women from working in mills on Sunday (thus interrupting
some textile processes requiring twenty-four hour-a-day
monitoring).
          Northern plants streamed southward, drawn by this new tax climate,
and the absence of unions. A New_York textile company,
Deering-Milliken, was one of the earliest and the most enthusiastic
recruits, moving its corporate headquarters to Spartanburg and tying
its fortunes closely to research and to graduates of Clemson
University. Board Chairman Roger Milliken, an avowed anti-unionist who
fought the longest battle in history with the National Labor Relations
Board over the closing of Darlington mill where workers voted to
unionize, formed an immediate friendship with Daniel and Daniel
Construction built Milliken plants across the Carolinas and
Georgia--without so much as a written contract. And when Clemson
University needed a new president in the mid-1950s, Clemson board
chairman Charlie Daniel reached out and recruited a Milliken plant
manager, Robert C. Edwards.
          Daniel died in 1964. These days, no one symbolizes the industrial
strength of South_Carolina like Milliken, whose two
billion-dollar-a-year, Spartanburg-based company is the country's
largest privately-owned firm, with twelve thousand employees.
          Milliken, who rarely grants interviews, is influential in several
business organizations, a lifelong backer of Republican Party
causes. He helped Barry Goldwater's rise to the GOP nomination in
1964, raised over $360,000 in campaign contributions in a few days for
Richard Nixon in 1972, and, at one point, turned down a cabinet job in
the Nixon adminstration. His personal attorney, George Dean Johnson,
has been chairman of the SC Chamber and is one of its most
high-profile lobbyists at the State House. Another business group
Milliken spearheads, the Palmetto Business Forum, is considered even
more conservative than the Chamber. In 1980, Johnson and Milliken
allies helped form a group seeking to block a constitutional amendment
allowing a gubernatorial succession--an effort many interpreted as a
move to shift power from the legislature to the governor. Business
lobbyists like their chances of influencing targeted legislators,
elected by smaller constituencies, rather than a candidate elected
statewide.
          Perhaps none of the current crop of 170 members of the SC General
Assembly personifies the new legislatures like House Speaker Ramon
Schwartz, a portly, good-natured attorney from Sumter, a small town
twisting around Shaw Air Force Base forty miles east of Columbia.
          Schwartz, fifty-nine, was elected speaker in 1980, replacing state
Rep. Rex Carter, a Greenville attorney who now frequently lobbies in
the General_Assembly for the Chamber of Commerce. His style of
leadership is steeped in loyalties and good-old-boy networking.
          In 1982, when the Legislative Black Caucus was pushing for a black
to be appointed to the all-white University of South_Carolina Board of
Trustees, Schwartz agreed that the caucus's proposed candidate was
qualified. But Schwartz refused to withdraw his support from a friend,
his white accountant and golf partner who frequently accompanies
Schwartz to USC football games. Schwartz's friend won the election,
angering black legislators.
          "I think black representation on the boards of universities is an
idea whose time has come," Schwartz, who represents a district less
than seventeen percent black, said afterward. "But I'm not willing to
let it come with my good friend Sam Benson as the sacrificial
lamb."
          Schwartz makes no bones about his other friends and loyalties,
boasting of his close relationships with state business leaders. In
1981, he was the Chamber's "Legislator of the Year," awarded the honor
at a three-day, all expenses paid party for the General_Assembly at
Myrtle Beach.
          In early 1983, Schwartz emerged as an outspoken critic of Riley's
attempt to reform the state income tax system, which would have cut
taxes for anyone making less than $22,000 annually--and increased
taxes for those making more.
          By late 1983, Schwartz joined Lt. Gov. Mike Daniel to tour the
state trumpeting the virtues of the constitutional state tax and
spending limitation, blocked by Gressette's opposition and only
lukewarm support over the years from Riley.
          Why would the speaker of the House of Representatives 

barnstorm the
state to promote a piece of legislation weakening the authority of the
House he leads?
          Critics point to Schwartz's obligations to those who salvaged his
office for him in the fall of 1982.
          Schwartz faced the toughest reelection campaing of any House
Speaker in memory from a political neophyte named Jim Ross.
          Ross, a retired military officer, became the lightning rod for
Sumter voters offended by Schwartz's wholehearted support for a new
$600 million Union Camp paper mill to be built on a site at the mouth
of the state's Santee-Cooper lake system. Santee-Cooper, a
world-reknowned bass fishing outlet, stretches seventy-five miles
through the heart of the state and attracts millions in tourism,
fishing and tax revenues each year. Union Camp, a paper products
manufacturer based in New Jersey, operates mills in Savannah, Georgia,
and Franklin, Virginia where fish kills and offensive odors have been
linked to the plants.
          The Union Camp fight quickly became a classic of
jobs-versus-environment confrontation. When Schwartz refused to join
activists demanding that the US Army Corps of Engineers order a
full-scale Environmental Impact Statement, a normally routine gesture
to assess the damage a mill might do, Ross's campaign was born.
          Eventually, Schwartz defeated Ross by a 115-vote margin out of
nearly 4,500 votes cast, in a race filled with so many election
irregularities that the Sumter Democratic Executive Committee ordered
a new election. Later, SC Democratic_Party officials, including many
of Schwartz's long-time allies, overruled the county party and
certified Schwartz as the winner.
          But Schwartz's victory wasn't easy or cheap. To win, Schwartz set a
new spending record for a local House race, raising and spending
$34,075 to attract just 2,281 votes in a race for a $11,000-a-year
job. Thousands of dollars were contributed by the state businesses
whose interests Schwartz frequently supports in Columbia: realtors,
banks, electric and gas companies (including some which don't serve
his district), and textile companies.
          When Ross, who spent only nine thousand dollars questioned the
acceptance of such donations, Schwartz told reporters it was "most
flattering" that business had enough confidence in him to back his
re-election.
          "I don't see any conflict of interest in taking campaign
contributions from utilities," said Schwartz. "I had an extremely
close race and I would have hated to test the waters without it
(money)."
          In early 1984, Schwartz became the primary opponent of Riley's
latest plan--a pure one-cent sales tax to benefit public_education in
South_Carolina.
          "He's right in their pocket," said a Riley aide of Schwartz's as a
spokeman for business. Schwartz faces another bitter primary fight
against Ross this summer, a confrontation which could turn into
another cause celebre for corporations and political action
committees.
          Another politician who was the beneficiary of business largess in
1982 was the current Democratic lieutenant governor, Mike
Daniel. Similar business support in 1986, which appears likely, could
propel Daniel into the governor's office for eight years.
          Daniel, a forty-four-year-old Gaffney attorney and the son of a
loom repairman, emerged as the favorite son of the state's
textile-and-banking establishment as he spent over $500,000 winning
the $34,000-a-year lieutenant governor's job two years ago. A
lieutenant governor in South_Carolina has few official duties, but it
has historically proved to be a key stepping stone to the
governorship.
          Daniel is already seen as the business cartel's designated
candidate in the crowded field seeking the governorship in 1986, a
race most state voters haven't given one thought to. It's an informal
endorsement, of course, but it could be crucial with up to a dozen men
who would be governor already itching to announce. The 1986 winner
will likely serve for eight years, since South_Carolina's new
gubernatorial succession law (as have others across the South) has
left incumbent governors virtually unbeatable for reelection.
          What kind of governor would Daniel be?
          His record shows that, politically, he will make no waves. And his
1982 campaign was a textbook example of how valuable well-heeled
friends in high places can be in a close, hard-fought statewide
election.
          Daniel's chief opponent for the job was former State Sen. Tom
Turnipseed, a controversial, confrontational and maverick populist and
an outspoken critic for ten years of the state's business
establishment especially utility com-

panies and big banks. (See
Southern_Changes, August/September, 1982)
          Daniel's campaign was built on a foundation of business support. At
cocktail party, after drop-in, after reception, Daniel raised over
$200,000 for the race in the early stages. Included was a
thousand-dollar-per-person cocktail party at Columbia's exclusive
Palmetto Club, with the invitations signed by Bankers Trust Chairman
Hootie Johnson and Citizens and Southern Bank Chairman Hugh Chapman,
member of a prominent state textile family.
          Still, Turnipseed led the first primary with forty-four percent of
the vote, drawing much of his support from among South_Carolina's
black_voters, who make up nearly thirty percent of the registered
voters. Daniel finished second with thirty-one percent of the vote in
a five-candidate field. Though Turnipseed seemed poised for victory,
he lacked the fifty percent majority needed to avoid a runoff. Daniel
and his supporters used the two-week interim to launch a
television-and-telephone campaign portraying Turnipseed as an
irresponsible and dangerous radical.
          It took money to organize and Daniel was able to raise it. In ten
days, Daniel raised at least $101,000, nearly half as much as he
raised in the previous four-months of the campaign. Much of the money,
about $70,000, arrived in gifts of a thousand dollars or more,
including gifts of up to $10,000 from Riegel Textile Corp., $6,000
from Springs Mills, $5,000 from Greenwood Mills, and $4,000 from
Liberty Corp., a Greenville-based insurance and holding company whose
board chairman, Francis Hipp, is a prime mover in the Chamber of
Commerce.
          One of Daniel's phone banks was based at the State Chamber of
Commerce headquarters in Banker's Trust Tower in Columbia, provided
free by Reese, who says now he'd do the same thing anytime to defeat
Turnipseed. Seventy-nine fulltime callers contacted registered voters
in key white, upper-middle-class voters, including Republicans, with
the message: "Can I tell Mike he can count on your vote Tuesday to
help us stop Tom Turnipseed?"
          Turnipseed, meanwhile, was able to raise little money for the
Democratic runoff, and depended on the momentum from his first
primary, when he led Daniel by 39,000 votes and swept thirty-nine of
the state's forty-six counties.
          But it wasn't enough. The new strategy--backed up by fresh
money--turned the election around. Daniel, who other House members
could never remember sponsoring or leading a major piece of
legislation through the chamber, won the nomination by eight-thousand
votes.
          "They just bought the election, that's the only thing you can say,"
said Turnipseed. "It was extremely negative politics, and if you've
got the money you can get the message out to defeat anyone."
          In the general election, running against maverick Republican State
Sen. Norma Russell, Daniel's advisors attempted to flesh out his fuzzy
image by linking him to reform legislation.
          At one press conference, Daniel called for stricter limits and
tougher disclosure rules for lobbyists working the State House. Later,
Daniel advocated more stringent guidelines for the burial of nuclear
waste in the state at nuclear dumps in Barnwell, SC.
          But late in the campaign, when Daniel's advisors decided he needed
an extra push from television advertising to ensure victory against
Russell, Daniel borrowed $100,000 from Bankers's Trust. His co-signers
were several veteran State House lobbyists, including one who
represents the nuclear waste dump.
          Daniel won the general election easily. Since then, Daniel has
joined Schwartz to become the two primary elected_officials pushing
the Chamber's tax and spending limitation in the General_Assembly and
to the public.
          Records show his $100,000 campaign debt from '82 is gradually
disappearing. During late 1983, while Daniel toured the state for the
Chamber pushing the amendment, he received thousand dollar
contributions from Hootie Johnson, Hamrick Mills, Burlington
Industries, and Spartan Mills Chairman Walter Montgomery, and dozens
of smaller contributions from textile executives, bankers, and their
political action committees.
          
          Some of the legislative and electoral activism by business groups
is considerably more circumspect than the Schwartz and Daniel
campaigns, or the red-white-and-blue conventions the Chamber of
Commerce sponsors each autumn for legislators at one of South
Carolina's coastal resorts.
          But it is a testament to the level of influence achieved by the
Chamber and allied business groups that on some key General_Assembly
votes they have been quietly able to win over the most skeptical of
enemies.
          Take the General_Assembly's Legislative Black Caucus, for
example.
          Most of the state's nineteen black House members are suspicious of
big business and its expanding role of influence in state affairs. In
part, that's because the state's business-and-banking community is run
by an almost exclusively white executive power structure. And, in part
it's because business's legislative agenda, including tax breaks,
means that other groups--including the poor--end up paying more. And
in South_Carolina the poor are often also black.
          "I think the influence of the special (business) interest groups
has increased substantially in the ten years since I got here," said
state Rep. John Matthews, forty-four, a school principal and farmer
who is chairman of the Black Caucus. "I don't think it's good for the
state. What happens is, they (business groups) don't tend to look at
the state as a whole, from a balanced point of view. They only look at
it from whatever position they are pushing.
          Yet when the Chamber and its allies speak, even some black
legislators tend to listen.
          In April, when the business lobby's constitutional tax and spending
limit package came up for a key House vote, it was expected to attract
little, if any, black support. But when the votes were counted, six
members of the caucus voted for the amendment on second reading and it
passed by eighty-three to twenty-four, one vote more than the
eighty-two votes (two-thirds of the House) needed for a constitutional
amendment. Even Matthews, who was absent on second reading, voted for
it on the routine third reading despite his reservations.
          "I was not totally sold on the idea," said Matthews later. "I still
have mixed emotions about it."
          Matthews and other blacks deny it, but one reason for 

the
unexpected and ultimately critical shift of black votes on the issue
could have been lobbying by the state's large banks on another,
unrelated program.
          The day before the House vote on spending limits, a black lobbyist
arrived in the House to meet with the Black Caucus.
          The lobbyist was Moses Clarkson, a well-known black businessman and
chairman of the SC Department of Health and Environmental Control, who
also lobbies for the Chamber of Commerce on certain projects.
          Clarkson was there to explain a ten-million-dollar loan program for
minority-owned businesses in South_Carolina, a proposal being
considered by a group of SC bankers.
          Both Matthews and Clarkson denied any connection between
discussions of the loan program and how black members voted on the
constitutional amendment (which must still pass the SC Senate this
year to go on the ballot).
          But one member of the caucus told reporters there was definitely a
quid pro quo.
          "It was a bone being tossed out . . . come out and help us and
we'll sweeten the pot on the other side," one legislator told
The State newspaper of Columbia, saying Clarkson had
"indicated what could open on the horizon, depending on the outcome of
the (spending limit) vote.
          Why would seven black legislators vote for a constitutional
amendment which critics say could freeze or cut social program which
have greatly benefited SC minorities over the last fifteen years?
          "Some of them just thought it was an idea whose time had come,"
explained Matthews recently. "Some thought it may work."
          Of course, neither hardball lobbying nor passing out campaign
donations to politicians is anything new for business--in South
Carolina or any other state.
          For years, big utilities such as Duke Power, SC Electric and Gas,
and Carolina Power and Light gave not only campaign donations, but
also kept many legislators who were also lawyers on healthy
retainers. This practice is now largely abandoned, mostly because of
pressure from Turnipseed and other activists in the early 1970s.
          But the size of the current campaign gifts, the increasingly formal
network collecting and disbursing the donations, and the level of
access and influence in the General_Assembly this organized activism
seems to be giving business, is unparalleled.
          A study of campaign contributions to members of the SC House in
1981-82, conducted by University of South_Carolina-Aiken political
science professor Robert Botsch, found that eighty-three percent of
all campaign funds given to winning SC House candidates in 1982 came
from interest groups--business, lawyers, or health_care groups with a
direct interest in legislation.
          "There are virtually no labor groups, no consumer groups, no
environmental groups in South_Carolina," said Botsch. "And I think the
biggest surprise to me was no agricultural groups. Put all the
business and corporate contributions together and it amounts to
$270,000." Botsch's figures don't include donations from private
individuals who are major corporate chiefs, such as Milliken, who
prefer to give under their own names.
          "In effect, you have a very conservative estimate of the amount of
money given by business groups (eighty-three percent)," said
Botsch. "And it's still by far the most of any state I've ever heard
of. One study found fifty-four percent in Arizona. That's about the
highest previous figure from interest groups."
          There are contributing questions about the motives driving business
to assume their new role in politics in South_Carolina.
          Businessmen, particularly professional spokesperson like Executive
Director Reese of the Chamber, insist industrialists are interested in
expanding the state's shaky economy and lifting the quality of life in
the state for everyone.
          However, critics, including former Greenville mayor and state
Development Board Chairman Max Heller, an Austrian immigrant and
self-made millionaire, describe the new role of business as one of
self-interest and obstruction to prosperity.
          "They (the state Chamber of Commerce) have been an advocate of tax
reduction. They have been an advocate of greater incentives. They have
been an advocate of investment tax credits. They have been advocates
of reducing taxes . . . regardless of what they are," Heller, now
retired and living in Miami Beach, told the Greenville News last
year. "To the best of my knowledge, they have never helped to bring an
industry in."
          Industry's role in obstructing the recruitment of new business is
an old but largely untold story in South_Carolina.
          On the presidential campaign trail earlier this year, US
Sen. Ernest "Fritz" Hollings of South_Carolina talked about his
experiences as governor (from 1959-63), telling audiences he not only
had to fight poverty and undereducation, but the state's business
establishment as well, in finding and persuading new industry to come
to a job-starved state. It's a story Hollings has rarely, if ever,
told publicly in South_Carolina.
          Recently, when the Japanese auto firm Mazda selected Greenville as
one of three possible sites for its first US auto plant, some upstate
businessmen were upset. Eugene Stone, the seventy-seven-year-old
patriarch of Stone Manufacturing Company of Greenville, warned of
unions, a 

higher wage base, and a shortage of workers if the
four-thousand employee plant arrived in town.
          "We wouldn't like to see a big union plant coming in here in a big
way," said Stone. "We'd much prefer our boys and girls not to have a
union." Stone Manufacturing is active enough in SC politics that one
of its executives, Tom Marchant, is a member of the General_Assembly
and spends much of his time in Columbia.
          Some members of the General_Assembly, though unwilling to criticize
the Chamber and its business brethren publicly, say many executives
don't understand the function of government.
          "They say they want to run the state like a business, but how many
businesses have to worry about 400,000 people on food stamps?" asks
one legislator privately. "The functions of government are very
broad. You can't look at it like a profit-and-loss statement. We're
dealing with human lives, and a lot of our people are untrained,
illiterate and losing out."
          For years, surveys have ranked South_Carolina's business climate
among the best in the country, but Chamber officials continually cite
surveys and their research showing the state faltering.
          Recently, State Senator Tom Smith drew up a list of at least $115
million in business tax exemptions already on the books in South
Carolina. Included were five-year exemptions from property taxes for
new and expanding industries, exemptions on certain inventories not
sold on retail level, exemptions for pollution-control equipment,
fuels used in production, and equipment used in mining and quarrying,
and many others. Up to $5.6 billion statewide is exempt from county
property taxes, according to Smith, costing counties thousands of
dollars.
          Smith, standing outside the Senate chamber, had to excuse himself
quickly and get back to the floor for a debate.
          Inside, the Senate was considering repeal of the state tax. On
retail inventories. Merchants and business groups said it would give
the state an advantage over North_Carolina and Georgia in recruiting
new industry.
          Business lobbyists have been after the General_Assembly for years
to approve the exemption. This year, it looked like it just might
pass.
          
            Jim Walser, thirty-four, has been a member of The
Charlotte Observer's bureau in Columbia since
1979. From 1972 until l977, he was managing editor of Osceola
Newsweekly, also based in Columbia.
          
        
