New Legal Twist Emerges in Harrell Ethics Case

April 4, 2014

Investigative Reports

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Bobby HarrellThere apparently will be a Round 2 in the court battle between S.C. Attorney General Alan Wilson and state House Speaker Bobby Harrell, who is trying to stop Wilson from handling his ethics case before the state grand jury.

In a prepared statement issued this afternoon, James Parks, the state grand jury clerk, said a hearing “will be scheduled for additional oral arguments,” though he didn’t specify the issues in question or a hearing date.

Attorney Gedney Howe of Charleston, one of Harrell’s lawyers, confirmed this afternoon when contacted by The Nerve that Circuit Court Judge Casey Manning, the administrative judge of the state grand jury who is overseeing Harrell’s case, will consider whether the case should be transferred from the state grand jury, which handles criminal matters, to the House Ethics Committee, which deals with non-criminal, ethical matters involving House members.

“That’s one of several questions,” Howe said, though he declined to comment further on specifics of the issues to be addressed at the yet-to-be-scheduled hearing.

“What Judge Manning is looking to do is to have a full hearing and let everybody be heard before he makes up his mind,” Howe said.

“When it comes to criminal matters, I can’t possibly see how he (Manning) could remand it to the House Ethics Committee,” said John Crangle, attorney-director of the government watchdog organization Common Cause of South Carolina, when contacted this afternoon by The Nerve.

Asked whether Manning on his own requested both sides to address the issue of transferring the case to the House Ethics Committee or whether the request came from his client, Howe replied: “There was a lot of talking going on. Who exactly brought it up, I’m not exactly sure.”

Howe said that issue was raised during “sidebars,” or private meetings at the bench, during Harrell’s court hearing in Richland County Circuit Court on March 21. Harrell’s attorneys initially tried secretly to have Wilson removed from the case, according to testimony by Wilson, which confirmed an earlier story inThe State newspaper.

In explosive testimony, Brad Wright, an attorney and Harrell’s chief of staff since 2011, said he felt threatened by Wilson during a closed-door meeting last April at the Attorney General’s Office. Wright testified that Wilson was angry that an ethics bill at the time didn’t include a proposal by Wilson to create a multi-agency “Public Integrity Unit,” and that Wilson also had talked about the referral of an ethics complaint against Harrell to the State Law Enforcement Division.

In his testimony, Wilson, a Republican and the son of U.S. Rep. Joe Wilson, denied he threatened Wright. Manning made no ruling at the end of the approximately two-hour hearing, asking both sides to submit proposed orders to him.

One extension was initially granted at the request of Harrell’s lawyers; another extension has been made by the Attorney General’s Office, Parks said in his prepared statement today.

None of the court documents has been released publicly, despite a formal request last month and again today by The Nerve.

Parks and Mark Powell, Wilson’s spokesman, declined comment when contacted this afternoon by The Nerve.

Harrell, a Charleston Republican who has been the House speaker since 2005 and who was elected to the House in 1992, did not respond to a phone message this afternoon from The Nerve seeking comment.

In a June ruling last year, the S.C. Supreme Court upheld a ruling by Manning, a Richland County judge who has been on the bench for 20 years, dismissing a lawsuit brought by John Rainey, who sought a court declaration that Gov. Nikki Haley violated state ethics laws when she was a House member.

The House Ethics Committee in 2012 cleared Haley of charges that she used her legislative position to lobby for Lexington Medical Center, where she once worked for $110,000 a year as a fundraiser for its foundation, or for Columbia-based Wilbur Smith Associates, where she was paid $48,000 as a consultant.

In its 2013 ruling, the Supreme Court said that generally, “ethics investigations concerning members and staff of the Legislature are intended to be solely within the Legislature’s purview, to the exclusion of the courts.”

But in a separate concurring opinion, Justice Donald Beatty said Rainey’s lawsuit should have been dismissed in part because Rainey lacked the authority to “criminally prosecute” Haley.

“Although (Rainey) was not the proper party to pursue the criminal action, his concern for the public was not without recourse as the Attorney General’s office, either on its own initiative or via a referral from the House of Representatives Legislative Ethics Committee, could have sought a criminal determination of the alleged misconduct,” Beatty wrote.

No criminal charges were brought against Haley, a Republican. Unlike Haley’s case, Harrell’s case was referred to the state grand jury, a division of the Attorney General’s Office, which, by law, can decide whether to issue criminal indictments in public corruption cases.

The South Carolina Policy Council – the parent organization of The Nerve – in February 2013 filed an ethics complaint against Harrell with Wilson, who turned it over to SLED. After a 10-month investigation, SLED submitted its report to Wilson, who referred the case in January to the state grand jury.

Harrell has maintained he broke no laws, and he has not been charged with any criminal or administrative violations.

Among other things, the Policy Council asked Wilson to investigate whether Harrell violated state ethics laws in reimbursing himself from his campaign account for use of his private plane. 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.

The Policy Council’s complaint also requested an investigation into whether Harrell violated state ethics laws 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 Sate 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.

Wilson’s office in 2012 initially declined to take the case, saying that it should go first to the House Ethics Committee, though The Nerve pointed out then, citing legal sources, that Wilson’s office had the authority to accept it without waiting for a House Ethics investigation.

Wilson’s office eventually agreed to accept the case after Ashley Landess, the Policy Council president, raised concerns about inherent conflicts of interest if the House Ethics Committee handled the case.

For example, state law would require the committee to report its findings on the speaker, which would include an order of punishment, in writing to the speaker. If the speaker decided to appeal the recommended sanctions against him, he would be required, under the law, to convene the entire House to either uphold or reject the committee’s action.

Given that the speaker controls House committee appointments, though not the Ethics Committee, and thus has considerable influence over legislation, many House members likely would be pressured to side with the speaker.

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