JTRC Member’s Multimillion-Dollar Ties to DOT

June 15, 2015

Investigative Reports

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Road WorkSince 2007, Banks Construction Co. has received a total of more than $76 million from the S.C. Department of Transportation, records show.

And since 2007, Reid Banks, president and CEO of the North Charleston-based asphalt paving and land grading firm, has been a member of the legislatively controlled, 10-member Joint Transportation Review Committee (JTRC), which nominates candidates to the DOT Commission.

The eight-member DOT Commission approves contracts for large road and bridge projects, and sets policy for the 4,300-employee, $1.6 billion agency.

The Nerve’s review of state comptroller general records found that in fiscal years 2008, which started on July 1, 2007, and 2009, Banks Construction received a total of $2.1 million and $3 million, respectively, from DOT.

That amount jumped to $14 million, $21 million, $13.5 million and $14.4 million in fiscal years 2011 through 2014, respectively. Through April of this fiscal year, the company had received $7.2 million, records show.

The company’s major projects, as listed on its website, include drainage, water and sewer work at Boeing’s 787 Dreamliner assembly plant site; and asphalting and other improvements on a stretch of Interstate 526.

Banks Construction is a member of the Carolinas AGC, which describes itself on its website as the “premier construction industry association of the Carolinas.” The association’s website lists Reid Banks as serving on a joint DOT-association committee that “(f)ocuses on policy and program issues with SC DOT operations.”

In addition, Banks Construction is a member of South Carolina Alliance to Fix Our Roads (SCFOR), which supports an increase in the state gasoline tax, and has a link on its company website to an SCFOR video.

The Nerve in March reported that Banks Construction was among the top-six recipients of DOT funding among corporate SCFOR members over the previous 32-month period.

The Nerve on Friday left phone and written messages for Banks seeking comment on his position on the JTRC and DOT contracts with his company, but received no response by publication of this story.

Contacted Friday, Leslie Hope, a Carolinas AGC spokeswoman, told The Nerve that Banks has not regularly attended joint DOT-association meetings over the past two years, though he typically sends a company representative in his place.

“Our goal is we want to be effective and efficient because it is state money,” Hope said.

State ethics law (Section 8-13-1110 of the S.C. Code of Laws) generally requires state board, commission and council members to file annual income-disclosure reports, called statements of economic interests (SEIs), with the State Ethics Commission, though Herb Hayden, the Ethics Commission’s executive director, told The Nerve in a written response Friday that the law doesn’t cover JTRC members.

Banks hasn’t filed any SEIs since joining the JTRC, records show, though legislative members of the JTRC have done so because state law requires it for lawmakers.

State law defines a state board, commission or council as an “agency created by legislation which has statewide jurisdiction and which exercises some of the sovereign power of the State.” But in a 2009 written opinion, then-S.C. Attorney General Henry McMaster, who is now the lieutenant governor, said “while the Legislature established the (Joint Transportation Review) Committee by statute, we believe the Committee lacks a majority of the factors indicating an office.”

“Furthermore, and most significantly,” according to the opinion, “we do not believe the Committee exercises a portion of the sovereign power of the State.”

The opinion was requested by then-House Speaker Bobby Harrell, R-Charleston, who resigned from office last October after pleading guilty to using campaign funds for personal expenses. Harrell appointed Banks and Harrell’s father, Robert Harrell Sr., to the JTRC, according to the official 2008 Legislative Manual.

Under state law, legislators in the state’s seven congressional districts elect one DOT commissioner from each district; the governor also has an appointee to the commission. The law covering the JTRC (Section 57-1-740) mandates that nominations by the committee are “binding on the congressional district delegation,” and the delegation “shall not elect a person not nominated by the review committee.”

As with Banks, state Sen. Larry Grooms, R-Berkeley, chairman of the JTRC and Senate Transportation Committee; and Senate President Pro Tempore Hugh Leatherman, R-Florence, have been JTRC members since the committee’s creation in 2007, records show. There are no term lengths or term limits specified in state law for JTRC members.

Leatherman exerts considerable influence over transportation projects in South Carolina as a JTRC member, the Senate Finance Committee chairman, a member of the Senate Transportation Committee, a member of the state Transportation Infrastructure Bank Board of Directors, the Joint Bond Review Committee chairman, and a member of the governing panel of the S.C. Budget and Control Board, chaired by Gov. Nikki Haley.

The Nerve in April reported how Leatherman’s son-in-law, DOT Commissioner John Hardee of Columbia, who previously served on the commission from 1998 to 2007, quietly regained his commission seat last year after being nominated by the JTRC. The Nerve also revealed in April that a subsidiary of a company where Hardee works as an executive has a lucrative advertising contract with DOT for highway business-logo signs statewide.

The 10-member JTRC is split evenly between Senate and House representatives. The Senate side automatically includes the chairmen of the Finance, Judiciary and Transportation committees, or their designees; two other members are appointed by the Senate president pro tempore upon the recommendation of the Senate majority and minority leaders.

On the House side, the JTRC automatically includes the chairmen of the Ways and Means Committee and Education and Public Works Committee, or their designees; as well as three appointments by the House speaker – one House member and two members from the state at large.

Besides Banks, the only other current “civilian” JTRC member is Patterson Smith, owner of the Patterson Smith real estate agency in Charleston. Contacted Friday, Smith, a JTRC member since 2009, declined to say who initially appointed him, referring The Nerve to Grooms on that question.

Harrell appointed Smith to the JTRC, according to the official 2010 Legislative Manual.

South Carolina Policy Council Research Director Jamie Murguia and research intern Danny Morris contributed to this story. Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.