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The N.Y. Libertarian who tried to hijack the S.C. General Election

New York City Libertarian Howard Rich plowed hundreds of thousands of dollars into campaigns for the Nov. 7, 2006 elections in South Carolina, urging those he supported to in turn support his personal agendas.

By Corey Hutchins

By Corey Hutchins

What is the definition of a Yankee?

It’s a quickie you do by yourself. Or so goes the old joke— but many South Carolina voters wouldn’t be laughing if they knew who the man paving the yellow brick road with gold was for the Republican candidates of the 2006 S.C. General Election.

But this isn’t Oz— it’s South Carolina.

And though the man behind the curtain was indeed a squirrelly bald man, he had a real name and a real profession outside of the money-green tinted glasses worn by this year’s Republican campaign consultants of Emerald City.

His name is Howard Rich and he is a Libertarian real estate investor from Manhattan who some believe is single-handedly hijacking the SCGOP and turning the Palmetto State into his own personal guinea pig lab.

Sitting high in his Manhattan apartment though, Howard Rich is not a household name in the state where friendliness flows and if there’s anyone Rich wants to keep his name clear from the mind of besides the average voter or local reporter in South Carolina it appears to be the State Ethics Commission.

According to state law, a single person or company is only allowed to donate a maximum of $3,500 to a political candidate during an election cycle. So how does a person donate up to $73,000 to just one candidate like Rich did for Gov. Mark Sanford alone?

One way, says S.C. political commentator and blogger Ross Shealy, is to set up a number of different “shell groups” in order to bypass the law.

“Rich makes the maximum legal contribution of $3,500 to a candidate under the name of Bradford Management. Then he makes another contribution to the same candidate as Spinksville LLC. And then he makes another as Ashborough Investors and another as 405 49 Associates— you get the idea,” he says.

“And there are more: Spooner LLC. Bayrich LLC, Dayrich LLC, 538-14 Realty LLC, West 14 & 18 LLC, 123 LaSalle Associates, just to name a few. Some of these shell companies list Howard Rich’s Big Apple apartment as their primary address. Others purport to be located at an alternate address but have a “principal” address at his New York residence.”

It was Rich’s use of the different shell groups, or his playing of “the shell game,” in order to bypass the state campaign contribution limit laws that prompted The State newspaper to publish a Dec. 8 editorial urging the State Ethics Commission to enforce the state’s campaign disclosure law after U.S. District Judge Mathew Perry dismissed a lawsuit filed by South Carolinians For Responsible Government (SCRG) against the SEC.

Why did they file a suit? Because the SEC simply asked SCRG to file a report detailing its spending for political ads that ran in the June primaries. After SCRG filed the suite, the SEC stonewalled and seemed to drop their inquiries into the entire matter.

SCRG is a group financed by Howard Rich— who often sets up and bankrolls groups with “down home state-sounding” names as a way to play puppeteer without having to get his own hands tangled in the strings. Another one in South Carolina reportedly financed by Rich is South Carolina Club For Growth. We’ll get into that one later.

PSSSST…follow the money.

Though SCRG has repeatedly refused to say whether or not they are financed by Howard Rich, the dots can be connected the old fashioned Bob Woodward/Carl Bernstein way. But deep-throated parking garage freaks need not apply; a simple “follow the money”— or in this case “follow the chummies”— will do.

In November, Sanford’s 2006 re-election campaign manager, Jason Miller, told The State that he had not seen Rich in years and could not say when he last spoke with the man. For two years in the late ‘90s Miller worked for a group called U.S. Term Limits. Howard Rich is the president of U.S. Term Limits and their goal is to cap the times a House member can run for re-election. While he was a member of the S.C. House, Gov. Mark Sanford also worked with U.S. Term Limits and, last year, during an Oct. 30 ETV gubernatorial debate, Sanford called Howard Rich a “good friend.”

The governor was such a good friend of Rich’s that he reportedly received around $50,000 in campaign contributions for re-election from Rich’s shell groups alone— over 10 times the legal limit.

Those of course are the only groups so far found to be related to the New York financer. (In 1997, S.C. Republican Bob Inglis disagreed with U.S. Term Limits and was told, “If you get in our way, we will mow you down,” according to CNN’s All Politics. Inglis did not necessarily disagree with term limits, he said, — only the number of terms.)

Meanwhile, while Time magazine was calling Sanford the worst governor in the country, a group called The Cato Institute listed him as one of their highest-scoring governors. Howard Rich is on The Cato Institute’s board of directors.

Reporter John Stossel once broadcast a story on ABC’s 20/20 called “Stupid in America” in which Sanford bashed the current running of the S.C. public school system on national television. Stossel also has ties to the institute (he has written for The Cato Institute and delivered the keynote address at their 25th anniversary dinner).

The program 20/20 is on ABC and ABC is owned by the Walt Disney Company. A man named George Mitchell is the Chairman of the Board of Directors for the Walt Disney Company and Mitchell is also a member of the Leadership Council of a group called the National Club For Growth (so is Howard Rich).

An offshoot of that group is the political action committee, South Carolina Club For Growth. A woman named Karen Iocavelli is on the board of directors for the S.C. Club For Growth. Who did Gov. Sanford appoint to the state’s Education Oversight Commission? Former member of United New Yorkers for Choice in Education… Karen Iocavelli. (Iocavelli also personally contributed $2,500 to Republican Candidate for Superintendent of Education Karen Floyd’s campaign.)

Meanwhile, a man named Joshua Gross, who moved here from California last year, happens to be the executive director of the S.C. Club For Growth and Gross’s Web log, The Body Politic (www.schotline.blogspot.com), is the opinion voice of one of South Carolina’s most popular statewide political news gathering Web sites, Schotline.com.

In effect, one blogger complained in an open letter to the SCGOP in November, “Mr. Rich has successfully positioned his S.C. mouthpiece, Joshua Gross, as the gatekeeper of political news and ideas in [South Carolina].” Interestingly enough, while both SCRG and the S.C. Club For Growth are backed by an out-ofstate Libertarian and tend to push his agendas, both groups paid for a negative TV spot to run in November that accused The State newspaper of being an outof- state-owned company that pushed that company’s (McClatchy’s) “liberal” agenda.

The ad was so off the wall that WIS-TV General Manager Mel Stibbens reportedly refused even to let it air on his station.

Could all this be just political paranoia by Web log junkies, or could Howard Rich really be a nefarious puppet master with dollar sign eyes and the state of South Carolina in his direct line of vision?

During his campaign for governor, 2006 Democratic Nominee Tommy Moore published Howard Rich/Gov. Sanford/Karen Iocavelli/Josh Gross connections on his campaign Web site calling it the “Endless Circle” and he repeatedly pressed Sanford about the governor’s ties to Rich in televised pre-election gubernatorial debates in October. But aside from a few Web sites and scattered opinion columns aimed with laser focus at political insiders, Howard Rich still remains under the radar of South Carolina’s voting public.

For his part, and understandably so, Rich seems to stay as far out of the press as he can. And while even the Wall Street Journal could not get a direct comment from him about his interest in financing local campaigns across the country, the High Country News did quote him once saying “I made a few bucks in business, so I am able to do this stuff.”

Making his money in real estate in the ‘60s, Rich, now 66, became active in the Libertarian party in the early ‘80s but has reportedly since left the party and is now a Republican.

Though he left the party, Rich and his wife Andrea took over the Libertarian Review Foundation, renaming it The Center for Independent Thought and have also helped fund the Libertarian magazine Reason, according to the Public Broadcast System. Since then he has immersed himself in the workings of politics, getting himself involved in races from Oregon to Nevada, Arizona to South Carolina.

Last year alone, Rich spent a reported $7.3 million on initiative campaigns and bankrolling groups with native-sounding names like “Oklahomans For Good Government,” “Missourians In Charge,” and “Montanans in Action.”

So can someone actually buy an election? That’s exactly what Rep. Bill Cotty (R-Richland) wanted to know when he found out Howard Rich was the one paying for negative direct mail pieces painting Cotty in poor light to members of his own constituency. Speaking about it recently to City Paper, Cotty recalled the ordeal as the “election from hell.”

“They [the negative direct mail literature] weren’t coming out every week, it was every day,” he said about the Rich-funded efforts to unseat him, also calling many of the claims out-right lies. “[Rich] spent a quarter of a million dollars on my election alone.”

Cotty also said the picture that unregulated groups funded by people like Howard Rich paint is that South Carolina may have the potential to be “for sale.” Cotty’s wife, he said, had just undergone two knee surgeries. When he asked her if it was painful she said “Yes, but not as painful as the election we just went through.” What Cotty wants to know about the elected officials who all took Rich’s money: “Is that going to influence their vote on an issue down the road?”

So now we wait and see

Every politician whose campaign Rich and his shell groups contributed loads of cash to except for one came out victorious on Nov. 7. Mark Sanford, Andre Bauer (though a very close race), Richard Eckstrom and Thomas Ravanel all pulled wins. The only anomaly was Republican Candidate for Superintendent of Education Karen Floyd who some believe Rich may have had the most personal vested interest in.

Rich’s view on public education— specifically, keeping the government entirely out of it—is one he seems to hold most dear to his heart and the hearts of many of the PACs and “[insert state name here] Club For Growth” and “[insert state name] For Responsible Government” groups he pumps money into to keep from financial cardiac arrest. And while Floyd’s campaign may have needed a few Rich-induced monetary defribulations, it ended up dying on the operating table. (Although it may have actually been the closest statewide race in S.C. history.)

While in New York last week, City Paper contacted Howard Rich who said he would “gladly answer questions.” When asked to comment on his contributions to S.C. statewide campaigns and members of the legislature or if he bankrolled the negative mail pieces for Rep. Cotty, Rich did not respond.

He also refused to dispel allegations that he pays Joshua Gross’s salary and would not comment on the use of shell groups to skirt campaign finance laws.

While Rep. Cotty says he believes the shell groups are “so unaccountable and irresponsible” that they need to be regulated, others say those who take Rich’s money should just come clean and admit it so they can be held accountable for their votes down the line and how that money may or may not affect it.

Similarly, Shealy believes that if you were to cross-reference Rich’s LLC groups and his friend’s contributions to members of the legislature in South Carolina against their individual votes on Put Parents In Charge, for instance, they would presumably all be “yes.”

City Paper plans to keep an eye on those elected officials with ties to Howard Rich and their voting record down the line.

In the words of Thomas Jefferson: “I sincerely believe … that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”

Ross Shealy contributed content to this article