Political Profiteering from S.C. floods?

October 26, 2015

Investigative Reports

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Flooding

Disgraced councilman, failed Haley appointee plotted $1M scheme

With both Richland and Lexington Counties conservatively reporting approximately $10 million each in damages related to historic flooding earlier this month, questions surrounding cleanup and relief efforts have taken a predictably political turn with predictably uneven results.

Two former Army command-level officers and Gov. Nikki Haley cabinet appointees have emerged in the past week as eager to play a role, though one of those roles controversially was scrapped once details came to light.

On Oct. 19, Haley appointed Kevin Shwedo to lead “Team South Carolina” as the governor’s point person for disaster-relief efforts, coordinating state and federal responses. Shwedo, a former Colonel and Deputy Commander at Fort Jackson, had been serving as Haley’s director of the Department of Motor Vehicles since 2011.

The move, Haley said, won’t cost taxpayers a dime of his yearly salary of $123,969, and Shwedo’s chief of staff John Laganelli will fill in as acting director for as long as Haley believes she needs Shwedo. Haley also issued an executive order last week allowing state workers to be paid for time missed from work due to flooding.

Those moves drew widespread praise, unlike a development a day later involving another former Fort Jackson commander and failed Haley appointee who, it would appear, contrived with a county council member to turn the flood into a money-making opportunity.

In partnership with Richland County Council member Kelvin Washington, former Maj. Gen. Abraham Turner’s consulting firm, AT Consulting, got a private hearing from the council for a $1 million no-bid contract – and a potential $194,000 payday for Turner himself – to help “coordinate” flood-relief efforts in the Lower Richland community, The State newspaper first reported last week.

In a copy of the proposal obtained by The Nerve, the period of the contract was retroactive from Oct. 14 through March 15 of next year. The $1 million contract would not be used to purchase any relief supplies whatoever. Instead, the money was to be used to fund salaries and expenses relating to “personnel manning for LROC (Executive Director, Deputy Executive Director, Operations Officer (3), Administrative Personnel (8), Logistics Managers (3), Media Representative (1)).”

Those personnel would then “coordinate, store and deliver disaster relief goods and resources (minus monetary contributions) to citizens in rural areas of Richland County, South Carolina.”

Besides salaries, the contract also calls for the county to:

  1. Provide Sheriff Substation located vicinity Lower Richland High School to be utilized as Lower Richland Operations Center (LROC)
  2. Provide desk, chairs, tables for LROC set-up and operation
  3. Provide IT equipment (telephone, desktop computers) for LROC operations
  4. Provide transport assets for travel throughout districts 10 and 11.

As executive director, Turner would be paid $90 an hour for 2,160 hours ($194,400) of work. A to-be-named deputy director would make $60/hr ($129,600), three operations officers would make $86,400 each and three logistics officers and a “media representative” would make $43,200 for five months of work. An additional eight part-time “administrative specialists” would make $21,600. The agreeent also stipulates that county pay for staff’s food and lodging for the duration of the contract. The only “deliverable” items the firm lists as going to Richland County citizens are “contributed items (minus monetary contributions).”

A monthly fee of $5,000 also is assessed for “transportation,” $2,000 for “billeting and” $1,000 each for “supplies,” “insurance” and “legal.”

In news reports from earlier this month, Washington told reporters it was he who “enlisted” Turner in mid-October to establish and run a makeshift “Lower Richland Operations Center” out of a warehouse at 1601 Shop Road, the location Washington recommended the county fund in the proposal.

After a lengthy consideration in executive session on Tuesday, Oct. 20 in which sources tell The Nerve that Washington fought for the proposal vigorously, including yelling and swearing at other members, county council chose to take no vote on approving the bid once it returned to regular session.

When contacted Friday about county flood-relief efforts, Richland County public information officer Beverly Harris said council had no relief role to play beyond directing people to established federal aid agencies and trusted charities. She said she knew of only one council member who had been involved in organizing donations for flood relief – Kelvin Washington.

An Oct. 16 news report on WLTX lists Washington as the organizer of a “donation drive” run out of the “Lower Richland Operations Center” on Shop Road. Disaster-relief stations opened by state and federal officials for the Lower Richland community include the Temple of Faith Bible Way Church and Lower Richland High School.

For public watchdog organizations like Common Cause and executive director John Crangle, the appearance of impropriety and profiteering is impossible to ignore.

“This looks like one of the most obvious rip-off schemes I’ve seen,” Crangle said. “This is an example of what can go on at a governmental level, not to mention just a local charity level.

“It’s hard to believe this incredibly expensive bill in advance for six months of relief work at a huge salary and with a no bid-contract is even possible, and yet it’s my understanding that it was fought very hard for.

“It’s obvious that FEMA and state government and private charities were already handling those activities, so it looked to be redundant and a raid on the treasury. Thank goodness it was seen for what it was and media attention killed it.”

Turner’s controversial two-year term as Haley’s choice to run the Department of Employment and Workforce ended with his resignation in February 2013 a day after pointed questions from legislators about why his agency closed one-on-one services in 17 rural counties while giving raises totaling nearly $440,000 to dozens of employees and a highly critical 100-page audit from the Legislative Audit Council.

Immediately following his resignation from DEW in 2013, Turner worked for three months for South Carolina State University – his alma mater – earning $29,000 to help coordinate efforts to make the school more friendly to veterans.

AT Consulting Group lists as its address 2601 Read Street, which is the same as Benedict College’s Business Development Center. On the BDC’s website, the center’s stated goal is to “increase business development and provide entrepreneurial opportunities for low- to moderate-income persons.”

AT Consulting Group’s website, which includes the slogan, “No Angles… Just Results,” was established in 2014 and while advertising itself as providing “professional speakers for all occasions and forums” lists only Turner as a contact. A Secretary of State filing for AT Consulting lists Turner as the registered agent with an establishment date of July 12, 2013. Under “testimonials,” it says “Content to Come.”

Contacted Sunday at the number listed on AT’s website, Turner declined to comment on the proposal, saying “I don’t wish to get tied into newspaper articles.”

Both Turner and Shwedo serve on the Board of Directors for Haley’s Original Six Foundation.

Washington was an employee of the Department of Transportation before leaving in 2012 after he and then-fellow DOT and Richland County Council member Norm Jackson were accused of violating the Hatch Act, which The Nerve wrote about in 2011 and which bans state employees from serving on partisan, publicly elected bodies if their duties are connected to projects funded with federal money.

Washington then went to work for South Carolina State, his alma mater, in their transportation center before leaving to be a business consultant. He is the son-in-law of former longtime Richland County Councilwoman Bernice Scott. He currently owes $75,100 to the S.C. Ethics Commission and has been publicly reprimanded by that body.

Several local fundraising efforts already have been a success, including an impromptu “Dinner on the (Gervais Street) Bridge” organized by entrepreneur and community activist Emile DeFelice that raised approximately $50,000.

The creator of the Soda City Market and an experienced event organizer, DeFelice said the key to the financial integrity of any event is third-party verification of money collection and distribution.

“You have to have an agreed-upon cash security plan,” DeFelice said. “Never let the cash and the inventory be in a single person’s hands or overseen by one person or group.

“Lock the money down, secure it and verify it in a trustworthy manner that’s transparent and fair. I’d be wary of any efforts that didn’t have that kind of accountability.”

Locally and statewide, those seeking disaster recovery are urged to contact the Federal Emergency Management Agency first. FEMA has 23 offices statewide and already has approved more than $49.7 million in direct aid to 16,229 individuals, with an additional $6.3 million of public assistance grants obligated.

A message to Washington left on Sunday was not returned as of press time.

Reach Aiken at ron@thenerve.org or call 803-254-4411. Follow him on Twitter @RonAiken and @TheNervesc.