DOT Commissioner Influences Project He Has Stake In

February 8, 2016

Investigative Reports, Ron Aiken

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By RON AIKEN

pothole in road

In emails, Wooten directs DOT staff, county council members to take ‘hard line’ against firm owing him money

According to emails obtained by The Nerve covering a two year period, South Carolina Department of Transportation Commission chairman Mike Wooten used his position to have DOT staff and elected officials pressure a local government entity engaged in a dispute with an agency over a $1 million contract of which Wooten’s firm was a subcontractor.

Over the course of months after being elected a DOT commissioner in January 2013, Wooten directed DOT staff and engaged members of state and local government to help resolve a dispute between Horry County Council and the leadership at Coast Regional Transit Authority, a Myrtle Beach-area agency, to ensure that Coast would be able to meet its financial obligations to its subcontractors of which DDC Engineering was one.

It’s precisely the scenario, critics allege, that is impossible to prevent in a legislatively controlled system set up to favor the business interests of a few politically connected commissioners over the wider needs of the state.

Any system, they argue, that not only condones but defends the appointing of commissioners who are relatives of legislators or who have active business contracts with DOT (or, in one case, both) is one that invites abuse of authority and conflicts of interest.

EXERTING UNDUE INFLUENCE?

First, some history.

Coast RTA is the public, non-profit firm that runs the buses for Myrtle Beach and receives funding from Horry and Georgetown counties and the cities of Myrtle Beach and Conway. Those funds match funds from DOT and federal sources.

Back in 2005, Coast RTA won a $1 million federal grant to install bus shelters and signage, with DOT administering the funds. Coast RTA then hired Stantec Consulting Services, which in turn hired DDC Engineering, of which Mike Wooten is the founding partner and principal.

For a number of reasons including certification and management issues, the project stalled with delay after delay before ultimately failing when DOT canceled the project in 2013. That left Coast RTA on the hook for $324,000, including payments it owed to various subcontractors.

As the process dragged on Wooten expressed concerns with then-Coast RTA CEO Myers Rollins over his handling of the project and explicitly expressed his fear that DDC wouldn’t receive payment.

In a Nov. 7, 2013 email to then-DOT director of intermodal and freight programs Doug Frate, Wooten made those concerns clear. Referring to a long list of items from then-Coast RTA CEO Myers Rollins coming out of a meeting with DOT personnel about project funding, Wooten emphasized item six, which read “Coast RTA is not responsible to pay Stantec. SCDOT will identify funds to pay Stantec.”

“The sixth item is of particular and ‘personal’ interest to me,” Wooten wrote the DOT staffer. “Coast owes Stantec and, in turn, Stantec owes my firm.

“I fear that if Myers is telling the truth, neither Stantec nor DDC or the other subconsultants will ever see a payday.”

Eight days later on Nov. 15, Wooten wrote an email to then-state Rep. Nelson Hardwick (who was later indicted for misconduct in office and resigned in May 2015) in which he copied Frate, Horry County Council members Gary Loftus and Mark Lazarus and others letting them know of his interest in the outcome of the project.

“I have been involved in this mess from the onset and have been in weekly contact with Doug Frate with SCDOT in an effort to stay informed and, if possible, provide assistance.”

“I just wanted you (Hardwick) to be aware of the issue in the event you are contacted by representatives of Coast RTA due to your role as Chairman of the GSATS (Grand Strand Area Transportation Study, which funds Coast RTA). For now, this project is totally off the tracks.”

“Based on my involvement, the SCDOT has no choice in the actions taken. The problem is clearly caused by Coast RTA’s failure to follow proper procedures.”

In a Nov. 22 email to Frate, Wooten was even more direct about his position.20160218_143808

“From my perspective, if (Coast RTA isn’t) willing to take responsibility, there shouldn’t be any ‘slack’ cut for them on the SCDOT side. You won’t hear a peep out of me if you take a hard line.”

The message got through to Loftus.

In an 8:07 a.m. email from Loftus  to Lazarus and Wooten on Dec. 12, 2013, Loftus says he will “do whatever is necessary to get rid of (Rollins). Any thoughts that you have on how you and Doug (Frate) can assist………..to get this done is appreciated.”

Wooten responded immediately, forwarding that email to Frate at 10:21 a.m. with the following text:

“Let’s discuss how we can work with Gary Loftus his objective (of removing Rollins) as described below.

Thanks, Mike.”

“YOU DON’T JUST IGNORE A COMMISSIONER”

It’s also clear that DOT staffers such as Frate understood that when Wooten needed them to act on an issue, he was doing so in his capacity as commissioner.

In a Jan. 16, 2014 email, Wooten asked Frate to “provide me with information regarding the financial implications associated with Coast’s failure to properly perform on 1) The Bus shelter issue, & 2) The multi-modal issue.”

Responding  to that email in a message sent from his iPhone, Frate addressed Wooten as “Commissioner Wooten” and said he told his assistant to pull him out of any meetings if Wooten called or stopped by.

“With the multimodal study, Coast is on the hook for roughly $40,000 of the invoices they received from Stantec before they terminated that contract,” Frate wrote Wooten regarding funds owed DDC Engineering.

Outgoing SCDOT Commission Chairman Jim Rozier, left, passes the gavel to newly elected Chairman Mike Wooten, center, and Vice-Chairman John Hardee. (Photo by Rob Thompson/SCDOT)

Outgoing SCDOT Commission Chairman Jim Rozier, left, passes the gavel to newly elected Chairman Mike Wooten, center, and Vice-Chairman John Hardee. (Photo by Rob Thompson/SCDOT)

Later in January, Frate agreed to meet with Horry County Council at Wooten’s request despite his own misgivings about getting involved.

“Thoughts on my attending as requested by Commissioner Wooten?,” Frate wrote. “I am sensitive to deferring local issues to the locals and not getting unnecessarily drawn in, but if I attended I would only stick to the facts as I have done to this point.”

In a Jan. 23, 2014 email, Wooten specifically asked Frate to travel to the coast for a special meeting between Frate, Wooten and Horry County Council members.

“Doug, I spent some time speaking with Gary Loftus this morning. I think it’s time for Horry County Council to hear the rest of the story.”

“Can you possibly come down to Conway next Tuesday or Thursday for a meeting (sic) the Admin Committee of County Council? We will go into executive session (contractual matter) but they need the opportunity to hear directly from you what the story is.”

That meeting took place on Feb. 6, 2014, at 5 p.m. at an Horry County Council workshop. An agenda posted online for that meeting indicates an executive session was held, though no contracts with Coast RTA were on the agenda for that meeting and Coast RTA is not a county agency.

State law Section 30-4-70 regarding open meetings is specific about what matters may be entertained in executive session:

“Before going into executive session the public agency shall vote in public on the question and when the vote is favorable, the presiding officer shall announce the specific purpose of the executive session,” the law states.

“No action may be taken in executive session except to (a) adjourn or (b) return to public session. The members of a public body may not commit the public body to a course of action by a polling of members in executive session.

The reason given for executive session, according to council chairman Mark Lazarus in a video of the meeting available online and reviewed by The Nerve, was that it was a “matter of most importance (sic) we must talk about,” Lazarus said. Council voted unanimously to go into executive session, and upon coming out Lazarus asked Horry County attorney Arrigo Carotti to explain the session.

“While in executive session council engaged in discussions incident to proposed contractual arrangements, and while in executive session no decisions were made and no votes were taken,” Carotti said.

At the end of Horry County Council’s next full meeting on Feb. 18, Lazarus announced the formation of a committee to “look into” Coast RTA.

Mark Lazarus, Horry County Council.

Mark Lazarus, Horry County Council.

“I’ve got some serious concerns after talking to council members in light of some of the recent news articles and some of the things that have been going on,” Lazarus said at the meeting. “I’ve got some concerns about the future funding that we fund from this body for Coast.”

“I want to make sure we’ve got a fresh set of eyes looking at this so they can bring some information back to us as council as we begin our deliberations on our budget and make that we’ve got some good information.”

The committee, which included Coast RTA board chairman Bernard Silverman, was tasked with completing its work “by mid- to end of May,” Lazarus said.

Rollins was fired by the Coast RTA board in April 2014 despite having received “excellent” performance reviews from the same board in 2013 and 2014, according to records obtained by The Nerve.

Just last week, DOT removed Coast RTA from its list of “high risk” agencies where it had been since 2011, thereby assuring state funds continue to flow to the coast.

“We’re pleased with the direction that Coast RTA is moving in,” Frate told the Myrtle Beach Sun News on Feb.2.

Rollins has sued both Coast RTA and the DOT. His case has not been assigned a trial date as yet, and a scheduled deposition of Wooten did not take place when Wooten cancelled according to Rollins, who is representing himself in the case.

A one-time candidate for DOT commissioner and current executive director of the Coastal Conservation League, Dana Beach said the lengths Wooten took as a DOT Commissioner fly in the face of best industry practices in general.

“If you’re on a board, you work to guide that organization’s mission hand-in-hand with the executive director or CEO or secretary, in the case of DOT,” Beach said. “You don’t have board members going directly into an organization internally and telling people what to do and asking them to do things they’re uncomfortable with.

“To go down the chain and ask someone on staff to intervene on a project you have a personal financial stake in is a huge cause for concern and a serious ethical issue. The protocol there has to be different than that and involve Secretary (Christy) Hall or at least get an opinion on how to proceed from the DOT legal office. You don’t just ignore a commissioner.”

“THIS IS WHY WE NEED REFORM”

For critics, meddling in the affairs of local governments and DOT projects one has an economic interest in is precisely what DOT commissioners should not be doing.

“If you’re going to be on the DOT commission you should not be involved with any business dealings with the DOT,” said John Crangle of Common Cause SC, a government watchdog group. “There needs to be an abundance of prudence when it comes to that, but this case sounds like (Wooten) was very involved with influencing an outcome favorable to his business.

“I think even if you’re not using your position to affect the outcome, there’s always the appearance that you could be, and the appearance of conflict of interest is hugely important. Appearance is reality in many cases, and so it would be advisable for him not to have been involved at all.”

“I think he should resign from the commission and have the legislature pick a replacement, because this situation doesn’t just suggest a conflict of interest, it demonstrates it.”

Dave Schwartz is the South Carolina director for Americans for Prosperity, one of many groups calling for DOT reform.

“I’m shocked and appalled by this,” Schwartz said of Wooten’s interference in a DOT deal of which he had a financial part. “Mike Wooten is now the chairman of the transportation commission, and unfortunately this type of behavior is entirely representative of how business is done inside our transportation system in South Carolina.

“It’s using taxpayers’ dollars and resources to benefit themselves instead of doing what taxpayers expect, which is to fix the roads. At the end of the day, that’s what really upsets people and makes folks hesitant to send more of their hard-earned money to a corrupt system.”

Commissioners are nominated by their respective legislative delegations then screened by the legislatively controlled joint transportation review committee, which interviews candidates about such issues as conflicts of interest before qualifying them.

Wooten serves the seventh congressional district and was elected in 2013 over four other candidates screened by the JTRC: Robert L. Castles Jr. of Myrtle Beach; Rick F. Elliott of Little River; Edward F. Holowacz of Myrtle Beach and Byron Yahnis of Florence.

Wooten was elected chair of the DOT commission in January. The vice chair is John Hardee, Sen. Hugh Leatherman’s son-in-law whose business, Lamar Outdoor Advertising, has millions of dollars in contracts with DOT.

Before 2010, a sitting governor could remove a DOT commissioner for “malfeasance, misfeasance, incompetency, absenteeism, conflicts of interest, misconduct, persistent neglect of duty in office, or incapacity,” according to Section 1-3-240 of state. In 2010, however, legislation sponsored by then-Rep. Jay Lucas, R-Darlington, removed the DOT commissioners from gubernatorial authority.

For citizen activists such as Talbert Black, president of S.C. Campaign for Liberty, the lack of any option for taxpayers when abuses of power come to light is troubling.

“When lawmakers do something wrong, like when (former House Speaker) Bobby Harrell used his position to try and influence the Board of Pharmacy to approve his business, voters can vote someone out of office and the Attorney General can act,” Black said.

“But with DOT commissioners, there’s no direct connection to the people, no recourse other than complain to your legislative delegation, and they can always say it wasn’t up to them. This is why we need reform. There has to be transparency and accountability from the people who oversee our transportation dollars. You just cannot use your position to go in and directly influence a local project you have business with.

“As a business owner or partner, you have a recourse as a subcontractor if you don’t get paid. There are appropriate channels for that. You don’t use your position as a DOT commissioner to send someone from DOT down to twist arms and make something happen. It’s a simple abuse of power.”

Wooten did not respond Sunday to messages left on his cell phone or email.

Reach Aiken at 803-200-8809. Email him at ron@thenerve.org. Follow him on Twitter @RonAiken and @TheNerveSC.