S.C. Attorney General’s Office Backing Off Harrell Case?

October 8, 2012

Investigative Reports

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AirplaneJohn Crangle didn’t have to wait long to get an answer from the S.C. Attorney General’s Office.

The longtime executive director of the government watchdog organization Common Cause of South Carolina asked the state’s top prosecutor to investigate the use of campaign funds by S.C. House Speaker Bobby Harrell afterThe Post and Courier on Sept . 24 reported 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.

In a Sept. 28 letter to Crangle, Chief Deputy Attorney General John McIntosh rejected Crangle’s request.

“As you may be aware, this office does not investigate except in certain limited areas where there are designated funds for those investigations; i.e., (M)edicaid provider fraud, (M)edicaid recipient fraud and criminal securities,” Chief Deputy Attorney General John McIntosh wrote in the letter, a copy of which Crangle provided to The Nerve. “Investigations are conducted by the respective law enforcement agency.”

Crangle, an attorney, told The Nerve last week that McIntosh’s answer was puzzling given the fact that the state grand jury, a powerful investigative tool of the Attorney General’s Office, indicted then-Lt. Gov. Ken Ard on state campaign-finance violations less than seven months earlier.

Historically, State Law Enforcement Division agents have been assigned full-time to the state grand jury. For example, the 2010-11 accountability report of the Attorney General’s Office listed at least three SLED agents as specifically assigned to the state grand jury.

As it turns out, McIntosh’s letter wasn’t the first “hands-off” statement on the Harrell case by the Attorney General’s Office.

In a statement published by The Post and Courier on Sept. 25, J. Mark Powell, spokesman for Republican Attorney General Alan Wilson, said Wilson would not take immediate action.

“By law, the House Ethics Committee would be the initial reviewing authority,” Powell said.

But several veteran South Carolina criminal lawyers told The Nerve last week that they were aware of no state law supporting Powell’s statement.

“To say that a state grand jury investigation takes a back seat to an administrative proceeding is something that is foreign to our criminal justice system,” said one of the attorneys, who asked not to be identified for this story.

In a Sept. 28 letter to state Rep. Roland Smith, R-Aiken and the House Ethics Committee chairman, Crangle requested that the Ethics Committee “waive jurisdiction over any ethics complaints relative to Speaker Harrell and refer all such matters to law enforcement.”

Crangle contended in the letter, a copy of which he provided to The Nerve, that the Ethics Committee has a conflict of interest in investigating Harrell in part because five committee members, including Smith, have received contributions from a political action committee associated with Harrell.

More Powerful Than County Grand Juries

The state grand jury, created by lawmakers in 1987, is made up of 18 citizens and four alternates whose names are drawn randomly by the clerk of the grand jury from a list of eligible jurors statewide, according to state law. The jurors, who meet in secret in Columbia, are impaneled by a circuit judge specifically assigned to handle state grand jury cases.

Unlike county grand juries, the state grand jury, or the state grand jury clerk at the request of the attorney general, can subpoena witnesses and documents; and testimony is taken under oath and recorded by a court reporter, which means witnesses can be charged with perjury if they lie.

Under state law, state grand jury cases can proceed only if the state attorney general and SLED chief jointly agree and convince a circuit judge assigned to those cases to impanel the jury.

State grand juries by law can issue indictments in certain types of criminal cases that typically aren’t suited for county grand juries, such as multi-county drug and pornography cases, computer crimes and securities fraud. An indictment is an official document charging someone with a crime.

The state grand jury also has jurisdiction in public corruption cases, defined by law as “any unlawful activity, under color of or in connection with any public office or employment,”  and involving any public official or public employee, or candidate for public office.

Then-Lt. Gov. Ard, for example, was indicted by the state grand jury on March 9 on four counts of unlawful reimbursement of campaign contributions, two counts of false filing campaign reports, and one count encompassing multiple acts of personal use of campaign funds – all violations of the State Ethics Act, according to the Attorney General’s Office.

On the same day, the Florence County Republican resigned his seat; pleaded guilty to all seven counts; and was sentenced to five years’ probation and 300 hours of community service, and fined $5,000.

Ard was accused of using campaign money for personal expenses, including a flat-screen TV, iPads, clothing for him and his wife, and a family vacation to Washington, D.C. The state grand jury began investigating the case after the State Ethics Commission in 2011 charged Ard with 107 ethics violations, according to media reports.

Harrell Denies Allegations

In Harrell’s case, The Post and Courier in its Sept. 24 story reported, citing an email response from Harrell, that many of the reimbursements he made to himself covered his costs of using his private, single-engine Cirrus SR22 airplane for legislative and political trips.

Harrell, a licensed pilot, repaid himself nearly $250,000 for travel expenses over the past four years, according to the newspaper, which noted that he provided no details about the purpose or destination of his flights on his campaign finance reports.

The newspaper reported that federal flight logs show that Harrell flew between Charleston and Columbia more than 110 times since 2008, and that other destinations included Miami, Key West and Augusta during the Masters Golf Tournament.

The Charleston Republican has repeatedly denied that he violated any state ethics laws, and he has not been charged either criminally or administratively with any such violations. In his most recent public statement issued Friday, Harrell blasted The Post and Courier story as “nothing more than just another misguided, media-drive political attack.”

The truth is: I am in full compliance with all aspects of our state’s Ethics Act … and, not only are all these campaign expenditures publicly disclosed online, I have the documents to back them up,” Harrell wrote in a letter, which was released through his email list.

“My duties as Speaker of the House,” Harrell continued, “often require me to travel extensively. I regularly use private campaign funds, instead of public funds, to pay for official legislative expenses.”

The Associated Press reported on Sept. 26 that Harrell put about $23,000 back into his campaign account after informing the State Ethics Commission in a letter that he didn’t have records supporting that expense amount. Harrell said he although he couldn’t produce the supporting documents, he believed that all of those expenses were legitimate, according to the AP story.

State law requires politicians to maintain “all receipted bills, canceled checks or other proof of payment” for each campaign expenditure dating back four years, though it doesn’t require public disclosure of those records. Harrell showed some expense records to an AP reporter, though he declined to let the reporter copy those records, according to the Sept. 26 AP story.

‘Ferret Out Corruption’

The Nerve last week interviewed four people with years of experience dealing with the state grand jury: Former longtime SLED Chief Robert Stewart; Reggie Lloyd, the immediate past SLED director who also has served as the U.S. attorney for South Carolina and a state circuit judge; former S.C. Attorney General Travis Medlock, who helped create the state grand jury system; and veteran criminal defense attorney Jack Swerling of Columbia.

All four declined to comment on specifics of the Harrell case, though Medlock said he has “high respect for Attorney General Wilson and any decision he makes on the issue.”

Lloyd, who served as the SLED director from 2008 to 2011, said the state grand jury must have specific criminal allegations to investigate, noting, “You don’t want to use the criminal-justice process to do a fishing expedition.”

“Because otherwise,” he explained, “the investigation is upside-down: The person is presumed guilty until we find enough evidence to clear him.”

While the SLED director, Lloyd declined to pursue criminal charges against then-Gov. Mark Sanford, who appointed Lloyd to the SLED position, regarding allegations that the GOP governor misused state funds on trips to see his mistress, including a 2008 Commerce-organized trip to Brazil and Argentina, during which he made a side trip to see his mistress.

“When we looked at the witnesses … we independently were able to prove what they were saying was not true,” Lloyd said, noting that his investigation found that Sanford used his personal funds in meeting with his mistress.

Sanford was hit with the largest ethics fine in state history – $74,000 – after a State Ethics Commission investigation found that he violated state ethics laws 37 times by misusing state planes on various occasions, using expensive airfares on foreign trips, failing to disclose some private plane trips, and not publicly disclosing why he reimbursed himself more than $1,800 from his campaign account. In paying the fine, Sanford admitted no wrongdoing.

Ard, the former lieutenant governor, paid a $48,400 fine in his ethics case.

Asked if the state grand jury could investigate a politician accused of converting campaign funds to personal use by padding reimbursements of legitimate expenses, Lloyd, who now runs a private law practice in Kershaw County, replied, “That certainly would be a proper topic for the grand jury to investigate.”

Stewart, who retired as the SLED chief in 2007 after serving 20 years in that position, said there’s good reason why the law requires the SLED chief, state attorney general and circuit court judge assigned to state grand jury cases to agree to a grand jury investigation.

“You have a duty and an obligation to ferret out corruption, but you also have a duty and an obligation not to sully or damage an honest person’s reputation or career,” he said.

Stewart, who is the CEO of a governmental and law enforcement consulting firm called Stewart Konduros & Associates,  said state grand jury investigations must “go beyond normal investigate means,” meaning that an investigation could not proceed without the grand jury’s authority to subpoena records or witnesses.

The state grand jury has been used relatively sparingly in recent years, records with the Attorney General’s Office show. According to the office’s fiscal 2011 year-end accountability report, of the 19,732 active cases and reports handled by the office that year, 11 were listed as state grand jury cases.

Still, Stewart said it was not uncommon when he was the SLED chief for apparent political enemies of public officials to request SLED investigations of those officials during election seasons.

“We would have people call and tell us stuff that no way anyone could go and prove,” he recalled, “and then turn around and publicly announce they called for a SLED investigation when they knew we couldn’t investigate it.”

Swerling, an attorney for nearly 40 years who has handled numerous criminal cases in state and federal courts, said a state grand jury is much like a federal grand jury, which also has the power to subpoena records and witnesses.

“It (the state grand jury) was created by the Legislature to have the ability to investigate, not just indict,” he said, adding that “not every investigation leads to an indictment.”

Medlock, a Columbia attorney who served as the state attorney general from 1983 to 1995, said the main focus when the state grand jury was created was to attack a drug-trafficking problem in the state.

“You needed certain powers that county grand jurors didn’t have – the power of subpoena, the power to grant immunity,” he said.

Medlock said the state grand jury was intended to be used “only in extraordinary circumstances,” noting, “It would be used when it was something that a local entity could not effectively handle.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.