Harrell Ethics Case Goes to State Grand Jury

January 14, 2014

Investigative Reports

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Bobby HarrellWhen interviewed by The Nerve last September, Bart Daniel, one of S.C. House Speaker Bobby Harrell’s attorneys, seemed confident about the outcome of a State Law Enforcement Division investigation of his client.

“We have been cooperating fully, and the investigation is sort of wrapping up,” Daniel, a former U.S. attorney for South Carolina, said at the time. “We expect a positive result in the near future.”

But Harrell, the House speaker since 2005 and who was elected to the House in 1992, wasn’t in a celebratory mood Monday after S.C. Attorney General Alan Wilson’s office announced that the ethics investigation was being referred to the state grand jury.

“At every stage of this investigation it was reiterated to us that investigators have found no areas of concern,” the Charleston Republican said in a prepared statement. “Given every indication we have received from SLED and the Attorney General, I am disappointed and shocked by this sudden change of course.”

Harrell contended that he “cooperated fully and voluntarily with this investigation,” noting that he “provided access to everything they requested and met with investigators for several interviews.”

Harrell called on Wilson to publicly release the SLED report on the investigation, contending that the probe has “drawn on far too long and been done behind closed doors.”

A source told The Nerve that SLED’s written summary of its investigation totaled about 30 pages, though the entire report was several hundred pages with various attachments.

Harrell in his statement accused Wilson of notifying the press Monday before contacting him or his attorneys “about this decision.” But Mark Powell, Wilson’s spokesman, told The Nerve that the Attorney General’s Office contacted Daniel “at least 30 minutes prior to the media advisory going out.”

Powell, however, declined to comment on specifics of the SLED report, releasing the following written statement: “This is an ongoing investigation and we cannot comment on the substance of it. We cannot and will not release any SLED report, or any other documents.”

The Nerve received a similar response Monday after verbally requesting a copy of the SLED report from SLED.

“Anything that is referred to the state grand jury, there will not be any comments made about any aspect of it,” said SLED spokesman Thom Berry.

Harrell, who is scheduled to be in Columbia today for the first day of this year’s legislative session, did not respond to a phone message from The Nerve late Monday afternoon seeking comment. Charleston attorney Gedney Howe, one of Harrell’s lawyers, didn’t respond to a phone message left at his law office.

Daniel, whose law office is in Charleston, declined comment when contacted Monday, referring The Nerve to Harrell’s prepared statement.

The Nerve on Monday also interviewed three veteran attorneys not connected with the case, including a former SLED director and an ex-prosecutor for the state grand jury, on issues related to the grand jury.

The Harrell Complaint

The South Carolina Policy Council – The Nerve’s parent organization – filed an ethics complaint against Harrell on Feb. 14 with Wilson’s office, which referred it to SLED. On Dec. 6, SLED provided its report to Wilson’s office.

Ashley Landess, the Policy Council’s president, initially announced in January last year that the nonprofit, nonpartisan think tank was considering filing a complaint against Harrell with the House Ethics Committee, though she expressed concerns then about the committee’s objectivity. The complaint was filed the next month with Wilson’s office.

The way state law is written, Harrell would not have to recuse himself from a House Ethics Committee investigation if he were the focus of the committee’s inquiry. The law would require the committee to report its findings on Harrell in writing to the speaker.

The Policy Council’s complaint filed with Wilson’s office asked authorities to investigate whether Harrell:

  • Used his office for his financial benefit or that of his family business;
  • Used campaign funds for personal purposes;
  • Failed to maintain required records documenting his campaign expenditures;
  • Adequately itemized campaign reimbursements as required by state law; and
  • Violated state law by appointing his brother to a state judicial screening panel.

Harrell’s use of campaign funds came under fire after The Post and Courier reported in September 2012 that Harrell had offered no details to the Charleston newspaper regarding more than $325,000 that he had reimbursed himself from his campaign account since 2008. Citing an email response from Harrell, the newspaper reported that many of the reimbursements he made to himself covered the cost of flying his private plane to political or legislative events.

The Associated Press later reported that Harrell returned about $23,000 to his campaign account after informing the State Ethics Commission in a letter that he didn’t have records supporting that expense amount. Harrell at the time said he believed all of those expenses were legitimate and later said those records were lost in an office move.

State law allows campaign funds to be used to cover “reasonable and necessary travel expenses,” and that those funds cannot be “converted to personal use.” Another section of the law requires that candidates for public office “maintain and preserve all receipted bills and amounts” required under the law for four years.

The Nerve in October 2012 reported, citing flight and House records, that in 2008, Harrell took at least nine weekly round trips with his private plane between Charleston and Columbia when the Legislature was in session, and also received car-mileage reimbursements for 21 weekly round trips.

The House was in session 23 weeks that year – seven fewer weeks than the combined total of Harrell’s weekly car and plane trips for the period – raising questions about his flying and driving patterns during that session.

In January 2013, The Nerve revealed that Harrell in 2006 asked that state Board of Pharmacy, a division of the S.C. Department of Labor, Licensing and Regulation, in a handwritten note on his official House speaker letterhead for “urgent attention” to his request for a “new non-dispensing drug outlet permit.”

Harrell in recent years had been the president of a Charleston-based repackaging pharmaceutical company called Palmetto State Pharmaceuticals, which also goes by the name of PrimaryRX. The permit sought by Harrell in 2006 would have allowed his company to administer and store pharmaceutical drugs.

The Nerve’s January 2013 story also revealed that in a 2010 letter to hospitals statewide, Harrell pushed to expand his pharmaceutical business to emergency rooms, pointing out in the first sentence of his letter that he was “writing you today not in the capacity as Speaker of the House of South Carolina, but as a business owner.”

State law bans public officials from using their office to “obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.”

Under another state law, a public official cannot “cause the employment, appointment, promotion, transfer or advancement of a family member to a state or local office or position” supervised or managed by the public official. The same law bans public officials from participating in “an action relating to the discipline” of their relatives.

As House speaker, Harrell appointed his brother, John Harrell, a Charleston attorney, to the state Judicial Merit Selection Commission, which nominates judicial candidates for election by the General Assembly. By law, the speaker appoints half of the 10-member panel.

State law says non-legislative commission members are “subject to a right of removal at any time by the person appointing him,” which would mean Bobby Harrell would have the authority to remove his brother from the panel in contradiction to the other law banning public officials from disciplining their relatives.

Harrell had repeatedly denied publicly that he has done anything wrong, and he has not been charged with any criminal or administrative violations.

‘Powerful Tool’ for Prosecutors

Created by lawmakers in 1987, the state grand jury is made up of 18 citizens and four alternates whose names are drawn randomly by the clerk of the grand jury from a list of eligible jurors statewide. The jurors, who meet in secret in Columbia, are impaneled by a circuit judge specifically assigned to handle state grand jury cases.

Unlike county grand juries, the state grand jury, or the state grand jury clerk at the request of the attorney general, can subpoena witnesses and documents; and testimony is taken under oath and recorded by a court reporter, which means witnesses can be charged with perjury if they lie.

Under state law, state grand jury cases can proceed only if the state attorney general and SLED chief jointly agree and convince a circuit judge assigned to those cases to impanel the jury.

State grand juries by law can issue indictments in certain types of criminal cases that typically aren’t suited for county grand juries, such as multi-county drug and pornography cases, computer crimes and securities fraud. An indictment is an official document charging someone with a crime.

The state grand jury also has jurisdiction in public corruption cases, defined by law as “any unlawful activity, under color of or in connection with any public office or employment,” and involving any public official or public employee, or candidate for public office.

“It’s a powerful tool in a prosecutor’s hands,” said longtime criminal defense attorney Jack Swerling of Columbia, when contacted Monday by The Nerve.

But Swerling added that just because a case is sent to the state grand jury, “I don’t think anyone can make an assumption there’s going to be an indictment.” He noted that in his 40 years of practicing law, he has represented witnesses before state or federal grand juries “dozens of times” with no indictments issued against his clients.

Swerling said he believes it’s “telling” that Harrell called for the public release of the SLED report, theorizing that if the report is “favorable” to Harrell, Wilson might have decided to refer it to the state grand jury to “take it out of the political process and let the grand jury decide whether there is something there or not.”

Contacted Monday, Camden attorney Reggie Lloyd, a former state circuit judge and U.S. attorney for South Carolina who later served as the SLED director under former Gov. Mark Sanford, told The Nervethat in his experience, it was tougher to get state grand jury indictments in public corruption and environmental cases compared to drug cases.

“Usually it’s going to be a lot trickier (in public corruption and environmental cases) because you’re starting with the grand jury,” he said.

As for Harrell’s case, Lloyd said if Harrell met with SLED investigators several times and provided requested documents, it would be unusual for that type of case to go to the state grand jury, explaining that “targets” of grand juries typically don’t meet with investigators before the grand jury considers their case.

“My question would be: What other witnesses or documents would they need that they don’t already have?” Lloyd asked.

Contacted Monday by The Nerve, Jon Ozmint, the former S.C. Department of Corrections director under Sanford who previously spent more than five years as the chief prosecutor for the state grand jury, declined comment on specifics of Harrell’s case but said state grand juries can issue their own reports with or without an indictment, though it typically isn’t done with an indictment.

Ozmint, who runs a legal and consulting practice in Columbia, cautioned about reading too much into a case being referred to the state grand jury.

“It could mean that they (prosecutors) are just not certain there’s a violation of the law, so they basically want the collective wisdom of the jury,” he said. “It also could be they just need more investigation, and the grand jury is the best tool to do this.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.