House Speaker Rigging Outcome of Ethics Case?

March 17, 2014

Investigative Reports

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JusticeS.C. House Speaker Bobby Harrell – arguably South Carolina’s most powerful lawmaker – was visibly angry after state Attorney General Alan Wilson announced that an ethics investigation of Harrell had been referred to the state grand jury.

“I believe it was intended to inflict political damage to me,” the Charleston Republican told a crowded room of reporters and others about an hour before the start of the legislative session on Jan. 14. “However, the facts still are that I have not broken the law.”

Despite his public profession of innocence, though, Harrell in recent days reportedly has been working behind the scenes to make his ethics case go away through a legal tactic that, a review by The Nerve found, hasn’t been tried in recent memory by a target of a state grand jury investigation, and doesn’t appear to be authorized under state law or by court order to be done in secret.

The State newspaper revealed last week, citing unnamed law enforcement sources, that Harrell’s lawyers want a closed hearing before Circuit Judge Robert Hood – a relatively new judge assigned to the state grand jury – to argue that Wilson should be removed from their client’s case because of an unspecified conflict of interest.

It’s not the first apparent move by Harrell to use his authority as House speaker to better position himself in his ethics case. The Nerve reported last month that if Harrell is indicted by the state grand jury, Supreme Court Chief Justice Jean Toal would select the judge to oversee his trial. Harrell actively campaigned for Toal, who beat Justice Costa Pleicones last month for another term as chief justice in a rare judicial race in the General Assembly.

Toal, through her court clerk, declined to say when questioned by The Nerve whether she would remove herself from Harrell’s case if he is indicted.

Harrell, the House speaker since 2005 and who was elected to the House in 1992, has repeatedly denied publicly he has done anything wrong, and he has not been charged with any criminal or administrative violations. At the January press conference, he called several times for the release of a State Law Enforcement Division report, which he contends exonerates him, though under the state grand jury law, the report has to be kept secret while jurors consider the contents of the document.

Harrell has resisted repeated media requests to release copies of his own expense records in his ethics case.

No Legal Basis for Secrecy

The state grand jury, launched in 1989 to investigate public corruption, multi-county drug offenses and certain other crimes, is a powerful investigative tool of the S.C. attorney general. Unlike county grand juries, the state grand jury, made up of 18 citizens, has the authority to subpoena witnesses and documents; and testimony is recorded, which means witnesses who lie can be charged with perjury. A state grand jury investigation can’t proceed unless both the attorney general and SLED chief agree to it, and convince the judge assigned to those cases to impanel the jury.

State grand jury proceedings are secret under S.C. law. Except for witnesses who testify before the jury, those involved in the proceedings, including prosecutors, are banned from revealing witness testimony publicly during an investigation; violation of the law is a misdemeanor punishable by a maximum penalty of a $5,000 fine and one year in prison.

The Nerve’s latest review, however, found that:

  • There is nothing in the state grand jury law (Sections 14-7-1600 through 14-7-1820 of the S.C. Code of Laws) or a 2000 administrative order by the S.C. Supreme Court dealing with the state grand jury that specifically allows a person under investigation by the grand jury to request a secret hearing on a purely procedural issue that doesn’t deal with grand jury testimony.
  • The state grand jury law authorizes the presiding judge of the grand jury – the chief administrative judge of the judicial circuit in which the state grand jury is sitting – to decide whether the attorney general has a conflict of interest in a grand jury investigation and prosecution if there is a dispute. But that law and another state law dealing with the attorney general and local solicitors spell out no criteria for determining conflicts of interest.
  • State court rules of professional conduct don’t specify what constitutes conflicts of interest for prosecutors. Under guidelines published by the National District Attorneys Association, prosecutors should withdraw from criminal cases if defendants were clients of the prosecutors when the prosecutors were in private practice, or if defense lawyers are related to the prosecutors.

Neither Harrell nor his attorneys – Bart Daniel and Gedney Howe, both of Charleston – responded to written or phone requests last week from The Nerve seeking an explanation about why Wilson should be removed from the case, and why Harrell is seeking a secret hearing on the matter.

Wilson spokesman Mark Powell declined comment on specifics when contacted last week by The Nerve, reiterating only the following prepared statement: “The Attorney General’s Office is strongly opposing both the request for a closed hearing and any disqualification of the attorney general.”

Hood, who has been on the bench for only two years, is a former assistant prosecutor in the 5th Circuit Solicitor’s Office in Columbia and worked in the Attorney General’s Office with the state grand jury. He didn’t respond to written and phone messages last week from The Nerve requesting notice of any court hearings involving Harrell.

The Nerve also verbally and in writing requested a copy of any procedural motions filed by Harrell with the state grand jury clerk’s office. In a written response Friday, James Parks, the grand jury clerk, said only, “As I discussed with you on the telephone late yesterday afternoon, the Clerk’s office has no comment.”

In February 2013, the South Carolina Policy Council – The Nerve’s parent organization – filed a complaint with Wilson, asking for an investigation of, among other things, whether Harrell’s campaign reimbursements connected with his private plane use violated state ethics law.

State ethics law allows campaign funds to be used for “reasonable and necessary travel expenses” for political events, though it doesn’t define “reasonable and necessary.” The law also says that campaign funds can’t be “converted to personal use.”

From 2008 through 2012, Harrell reimbursed himself more than $234,000 from his campaign account for legislative and other trips, according to campaign expenditures reviewed by The Nerve.

The quarterly reports filed with the State Ethics Commission don’t say whether Harrell, a licensed private pilot, flew his single-engine Cirrus SR22 to any of the events, though the records show that of the 40 travel-expense reimbursements to himself, nine were for at least $10,000 each and three were for more than $20,000 each, as The Nerve reported in October 2012.

The Policy Council’s complaint also requested an investigation into whether Harrell violated state ethics law by using his office for his financial benefit or that of his family business. In January 2013, The Nerve reported that Harrell, then-president of a Charleston-based repackaging pharmaceutical company called Palmetto State Pharmaceuticals, in 2006 asked the state Board of Pharmacy in a handwritten note on his official House speaker letterhead for “urgent attention” to his request for a permit that would have allowed his company to administer and store pharmaceutical drugs.

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,” The Nerve’s January 2013 story revealed.

The Nerve reported two months ago that S.C. Secretary of State records show that Palmetto State Pharmaceuticals dissolved in December, though no reason was given; and that Harrell reported no campaign-account reimbursements to himself in 2013 for travel expenses, as he had done in previous years.

Handling the ‘Hard Cases’

Contacted last week by The Nerve, Travis Medlock, who served as the Democratic state attorney general from 1983 through 1994, declined comment on Harrell’s ethics case, though he said he recalled no instances during his 12-year tenure in which a target of a state grand jury investigation made a motion requesting that he withdraw from a case because of a conflict of interest.

Jon Ozmint, who served for five years as the state grand jury chief during then-attorney general Charlie Condon’s tenure (1995 through 2002), told The Nerve in a written response to questions that he couldn’t recall any such recusal motion when he was with the Attorney General’s Office, though he added, “However, similar motions to remove prosecutors are not uncommon in other venues and jurisdictions.”

“In this case, it appears that no warrant or indictment was issued,” said Ozmint, a Republican who served from 2003 through 2010 as the S.C. Department of Corrections director under then-Gov. Mark Sanford. “There is not yet a prosecution, only an investigation. This motion is unusual because the motion apparently precedes any indictment or other action by the State Grand Jury itself.”

Asked what would constitute a conflict of interest for an attorney general, Ozmint, who runs a Columbia legal consulting firm, replied: “I suspect that removal of a duly elected attorney general from his constitutional and statutory role will require more than proof of political friction, budget disagreements or even an active and acrimonious personal dispute. Since our Attorneys General are elected in partisan, statewide elections, any public official being prosecuted by the Attorney General could make such a claim.

“Our Constitution and statutes presume that elected prosecutors and law enforcement officials at every level will not allow such matters to unduly influence their investigative and prosecutorial decisions.”

Contacted Saturday by The Nerve, former state attorney general Henry McMaster said he couldn’t recall any time during his eight-year tenure when the target of a state grand jury investigation asked the presiding judge to remove him from a case. He added, though, there were outside calls for him to appoint a special prosecutor to handle an ethics investigation of then-Gov. Sanford.

McMaster, a former state Republican Party chairman, didn’t transfer the case and declined to prosecute Sanford, though the former GOP governor agreed in 2010 to pay $74,000 in fines to settle ethics charges brought by the State Ethics Commission alleging the improper use of campaign money, the purchase of business-class airline tickets in violation of state law, and the improper use of state aircraft.

Sanford, now a U.S. congressman, admitted no wrongdoing in agreeing to pay the fines.

“They elect you to handle the hard cases,” said McMaster, who was the state attorney general from 2003 through 2010. “Just because a case is difficult because of personal connections … that’s no reason to abdicate your responsibility.

McMaster, who served with Medlock as co-chairmen of the S.C. Commission on Ethics Reform, which was created by Gov. Nikki Haley in 2012 to propose changes in state ethics laws, said although he had supported Sanford politically in the past, he believed he could be unbiased in handling Sanford’s ethics case.

Although he declined to comment on specifics of Harrell’s ethics case, McMaster said he knows of nothing in state law that would allow a secret hearing in a state grand jury case involving a purely procedural matter. He noted that when he first publicly proposed the creation of the state grand jury in 1985 as he was returning to private practice after serving as the U.S. attorney for South Carolina from 1981-85, he intended any secrecy provisions to apply only to grand jury witness testimony and the identity of grand jurors.

“The reason for secrecy is that you might have a grand jury investigation with people being completely innocent,” he said. “It is to protect citizens from adverse exposure.”

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