Grady Leslie Patterson Jr., a former South Carolina treasurer for 37 years who was the major force behind a Supreme Court case that had a significant impact on the municipal market, died Monday. He was 85.
Mr. Patterson won an open-seat election for state treasurer in 1966 and served until 2007. He was defeated in 1994 but was re-elected in 1998. Before becoming a public servant, he served in the National Guard and the Air Force. He flew P-51 Mustangs in the Pacific Theater during World War II and retired as a three-star general, according to Patterson’s spokesman, Trav Robertson.
Mr. Patterson served “as a public servant of the first order for more than four decades,” South Carolina Gov. Mark Sanford said Monday. “It strikes me as significant that his passing comes on the same day we remember the sacrifice and service of so many of his fellow servicemen in World War II at Pearl Harbor.”
Mr. Patterson’s death on Dec. 7 also marked the 22nd anniversary of oral arguments before the Supreme Court in South Carolina v. Baker — an event well-remembered by municipal market participants.
South Carolina and 23 other states had challenged a 1982 federal law, designed to limit tax evasion, that required municipal bonds to be registered in book entry or electronic form. Previously there were only bearer bonds in paper form. But the high court ruled against the plaintiffs and said that state and local governments do not have constitutional protection from federal income taxes for their tax-exempt debt.
Charlton deSaussure, a public finance attorney with Haynsworth Sinkler Boyd PA who was at the high court for oral arguments in the case, said yesterday that Congress could have brought tax-exempt bonds into electronic registration without imposing “as a sanction the removal of the tax-exempt status of state and local debt.” It could have provided a financial incentive rather than legal sanction to compel electronic registration or mandated the change through the states by threatening to withhold transportation funds for noncompliance.
Mr. Patterson felt the electronic requirement was outside of Congress’ jurisdiction and unconstitutional, deSaussure said.
William Youngblood, a public finance attorney with McNair Law Firm PA, remembered one of Mr. Patterson’s sayings about state government: “Even on a good day we’re like little tugboats trying to move the ship of state. You won’t get immediate changes of direction.”
As a member of the Southern State Treasurers, Mr. Patterson urged the Municipal Securities Rulemaking Board in 1994 to add public officials to its board. Financial reform legislation pending in Congress would require the 15-member MSRB to have a board with a majority of public-sector members, as opposed to the current makeup, which includes 10 broker-dealer and bank representatives,
Mr. Patterson is survived by his wife, Marjorie Faucett Patterson, and six children. A visitation will be held today at 7:00 p.m. at the Shandon Presbyterian Church in Columbia, S.C. The funeral will be tomorrow at Shandon Presbyterian Church followed by burial in Elmwood Cemetery.
