Long-Awaited SLED Report on Harrell Raises More Questions

November 26, 2014

Investigative Reports

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Bobby HarrellWhen questioned by a State Law Enforcement Division agent last year, then-House Speaker Bobby Harrell defended reimbursing himself $3,874 from his campaign account for using his private plane to fly a high school baseball coach’s wife and the siblings of two players to a high school baseball tournament in Ft. Lauderdale, Fla., in 2009.

“Going to Florida was a see and be seen trip with my constituents,” the Charleston Republican told the SLED agent about the March 18, 2009, trip.

Asked about another campaign expenditure for a June 17, 2010, trip to the opening of the “Wizarding World of Harry Potter” at Universal Studios in Orlando, Fla., Harrell said he took the trip with his wife to meet with “film company executives in regard to film legislation that was under consideration,” though he couldn’t provide SLED with “any documentation indicating who the film company executives were or where and when the meeting took place.”

The two trips were among a number of questionable campaign expenses detailed in a SLED investigative report released Tuesday afternoon to The Nerve and other media in response to state Freedom of Information Act requests.

Harrell, who was first elected to the House in 1992 and became the House speaker in 2005, resigned from office after pleading guilty on Oct. 23 to six misdemeanor counts of using campaign funds for personal expenses, including the 2009 trip to the Ft. Lauderdale baseball tournament, though the Richland County  indictments didn’t specify the 2010 Orlando trip. He was placed on three years’ probation under a plea agreement that requires him to cooperate with state and federal authorities in any ongoing investigations.

The SLED report, which is dated Dec. 5, 2013, was in response to a Feb. 14, 2013, public-corruption complaint filed by the South Carolina Policy Council – The Nerve’s parent organization – against Harrell with S.C. Attorney General Alan Wilson, who turned it over to SLED for investigation. The report indicates that four SLED agents were assigned to the case – Lts. Kevin Baker, Michael Greene and Brian Bolchoz; and senior special agent David Williams.

The report is 42 pages, though seven full pages are blacked out, as well as parts of seven other pages. The Nerve in FOIA requests to SLED and 1st Circuit Solicitor David Pascoe of Orangeburg, who prosecuted Harrell, sought copies of all SLED reports and other related documents that were part of the approximately 32,000 pages of discovery that Pascoe publicly said in September were turned over to Harrell’s attorneys.

Unfinished Business?

The report released Tuesday addressed five concerns raised in the Policy Council complaint, including Harrell’s campaign-account reimbursements for use of his private plane, use of campaign funds for personal expenses, documentation of campaign expenses, his contact with the state Board of Pharmacy concerning his former pharmaceutical business, and his appointment of his brother to the state judicial screening commission.

But the report blacks out two other topics, raising questions about whether an investigation is continuing into other areas. For example, the report noted that Policy Council President Ashley Landess in interviews with SLED agents “voiced concerns” outside the formal complaint “over Speaker Harrell’s connection to and possible benefit from the Palmetto Leadership Council (PLC), a non-candidate committee or Political Action Committee (PAC), based in SC.”

The report, however, notes only a $605 campaign payment by Harrell to the PLC; most of the blacked-out pages immediately follow that section. The Nerve has written several stories on Harrell’s affiliation with the PLC, the latest story published in May.

In addition, the SLED report said Harrell “deducted airplane expenses from his income taxes,” noting, “As of this report, the OAG (S.C. Attorney General’s Office) is still evaluating this information.” According to one of the indictments issued in September that Pascoe declined to prosecute per the plea agreement, Harrell reimbursed himself a total of $294,335 in “untaxed income from 2009 through 2012 and claimed that the payments were for legislative or campaign expenses.”

Harrell pleaded guilty to reimbursing himself a total of $93,958 from his campaign account from Jan. 1, 2009, through Jan. 10, 2013, for expenses related to the use of his private plane, which, according to an indictment, were “neither related to his campaign nor his office in the House of Representatives of the State of South Carolina.” As part of his plea agreement, he was ordered to repay the $93,958 to the state’s general fund, which would be considered reimbursement to his campaign account.

The other five indictments to which Harrell pleaded guilty all involved campaign reimbursements for use of his private plane, including, according to the indictments, four “non-existent” round trips between Charleston and Columbia in 2009.

“Harrell clearly is not from out under the cloud,” said John Crangle, director of the government watchdog organization Common Cause of South Carolina, when contacted Tuesday by The Nerve. “I think there is a lot more investigation that is ongoing.”

Still, Crangle said the relatively large amount of redacted material in the SLED report released Tuesday is “very confusing.” He speculated that besides ongoing investigations involving Harrell himself, the redacted material could have identified other potential suspects or possible conflicts of interest involving Wilson – an allegation made by Harrell in his unsuccessful attempt earlier this year to have the attorney general disqualified from the case.

After a 10-month investigation, SLED turned its report over to Wilson, who announced it January that it had been referred to the state grand jury for further investigation. But after the S.C. Supreme Court on July 9 ruled that the state grand jury investigation could continue, overturning a May 12 ruling by Richland County Circuit Judge Casey Manning, Wilson, for still publicly unexplained reasons, turned the case over to Pascoe, and Harrell agreed to drop a court motion to disqualify Wilson from the case, under an Aug. 29 court-approved agreement, as The Nerve first reported. A Richland County grand jury indicted Harrell on Sept. 10.

New Revelations

Among findings in the SLED report released Tuesday not contained in the earlier-issued indictments:

  • Harrell met with two state Board of Pharmacy employees in his State House office to discuss a 2006 application for a permit for his then-pharmaceutical business known as Palmetto State Pharmaceuticals, which one of the employees described to SLED as being “very unusual.” Harrell told the pharmacy board employees he held the meeting in his office because he was “very busy.” The report also noted that emails between pharmacy board employees “suggested Speaker Harrell and his staff were upset with the time it was taking to get the permit.” In January 2013, The Nerve reported that Harrell, then-president of Palmetto State Pharmaceuticals, in 2006 asked the pharmacy board 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.
  • Documentation provided by Harrell to SLED indicated that the direct operating cost of his 2001 Cirrus SR22 single-engine plane was $111.55 per hour, though he charged his campaign $615 per hour for his plane use, which he said included fixed costs, such as property taxes and depreciation expenses, contending it was below the prevailing market rate for leasing airplanes.
  • Harrell’s campaign books revealed that of 1,054 expenditures from February 2009 through December 2012, 285, or 27 percent, “did not contain receipted bills or invoices form the specific recipient of the expenditure.”
  • Harrell was charged, though he didn’t plead guilty to, with reimbursing himself $70,286 for salary paid from 2009 through 2012 to his administrative assistant at his State Farm business in Charleston. The SLED report said according to Harrell’s campaign books, the assistant spent 70 percent of her time on campaign or House-related business; State Farm recently dropped Harrell as an agent, according to media reports.
  • After initial media reports in 2012 about Harrell’s campaign expenses, Harrell reimbursed his campaign account $22,955.41, informing the House Ethics Committee of nine expenditures that he had changed. The SLED investigation found discrepancies in four of the nine expenditures. Harrell told the Ethics Committee in a letter that that he was reimbursing his campaign account “because of the misplacement of the necessary supporting documentation and receipts related to specific campaign expenditures,” though the SLED report noted several times that Harrell’s credit card statements indicated that “Speaker Harrell does possession documentation” on how the money was spent, “despite his letter to the House Ethics Committee.” Harrell maintained that none of the nine expenditures in question was for personal use, and that the unredacted credit card statements reviewed by SLED were “working copies.”
  • Between Nov. 2, 2009, and March 7, 2013, Harrell received taxpayer-funded mileage reimbursements of $6,853 and another $27,772 in state “subsistence” payments, which are supposed to cover hotel and food costs for lawmakers during legislative session weeks and other official business. The SLED report also noted that Harrell’s campaign books showed he reimbursed himself from his campaign account for “food, travel, and lodging while he was in Columbia, SC, for General Assembly business.” The Nerve in October 2012 reported about discrepancies between Harrell’s car-mileage reimbursements and his flying patterns during the 2008 and 2010 legislative sessions.

As for Harrell’s appointment of his brother, John Harrell, a Charleston attorney, to the state Judicial Merit Selection Commission (JMSC) in 2007, the SLED report cited a letter from Rep. Greg Delleney, R-Chester and former commission chairman, who said John Harrell has “never been supervised or managed by the Speaker of the House.” Under state law, the House speaker appoints five members of the 10-member commission.

But the report didn’t address the Policy Council’s main contention that state law bans public officials from participating in disciplinary actions against their relatives in public positions, and Harrell’s authority to remove his brother from the JMSC violated that law.

Until his guilty pleas last month, Harrell had repeatedly maintained his innocence publicly, and he had unwavering support from the 124-member chamber. At a closed House Republican Caucus meeting at a Myrtle Beach resort on Aug. 16, House members in attendance gave Harrell several rounds of applause after he made a surprise announcement that the state grand jury investigation of him had ended, and Wilson had transferred the case to Pascoe, as The Nerve reported.

“I have your commitments for speaker, thank you very much,” Harrell told GOP House members, according to an audio recording of the meeting obtained at the time by The Nerve. “Let me say again, I ain’t going anywhere. I’m going to be right here. God bless you. Thanks.”

The House meets on Tuesday and Wednesday next week in its post-election organizational session; among other things on the agenda, a new speaker will be elected. Rep. Jay Lucas, R-Darlington and the acting House speaker, is expected to win the position without opposition.

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

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