Sentinel Progress

State Ethics Commission investigates Rec Fund misuse

PICKENS COUNTY — Sometimes, even when you think you’ve beaten a story to death, it just won’t die. Such is the case with the Pickens County Recreation Fund and former County Councilman G. Neil Smith.

It was revealed Monday night at the regularly scheduled County Council meeting the State Ethics Commission has found “probable cause” in a complaint filed against the former Councilman.

“The complaint alleges that Neil Smith directed $25,000 of taxpayer funds to BMI, a private company where Mr. Smith sits on the board of directors,” said County Attorney Ken Roper following a brief conference with the Council in executive session. “The complaint also alleges that Mr. Smith attempted to send an additional $65,000 of taxpayer money to BMI, but County staff refused to do so until his (Smith’s) term expired.”

First off, a bit of history …

In a story The Sentinel-Progress broke over a year ago, it was revealed through documents obtained under South Carolina’s Freedom of Information Act (FOIA) that just after the November election, then Councilman-elect Roy Costner approached County Administrator Gerald Wilson with concerns about the then-named Liberty Civic Auditorium (LCA.)

“He (Costner) stated he had been contacted by a citizen about some issues with the Civic Auditorium that may have legal issues,” Wilson’s documentation log read. “I instructed Ken (Roper) to pull all records related to this matter and see if he saw anything that looks suspicious.”

Documents from the county showed a series of bookings to the auditorium through two companies: Broadcast Music Incorporated (BMI) and O.S. Productions.

Besides the discovery that Smith sat on the board of directors for BMI, there was also a concern about O.S. Productions. Namely, that the company itself was actually just a front.

“I was concerned that Neil (Smith) was OS Productions and actually the person running the operations,” wrote Wilson in his log.

On Nov. 14, 2016, Wilson and Roper met with Smith to address their concerns.

Let’s just say it was a “colorful” meeting.

“During the meeting CM (council member) Smith became very upset that we were even bringing the matter before him,” Wilson documented. “He stated that the recreation fund he was using was his money and we did not question other Council members when they spend their money.”

Wilson said that he, as administrator, had the responsibility to investigate every complaint to determine its validity.

“… Smith looked at I and Ken and flipped a bird at both of us and stated he was coming after us,” the log read. “He was talking in a loud rude tone.”

At this point, County Finance Director Ralph Guarino attempted to find out who was cashing the checks issued to O.S. Productions and Pickens County Sheriff Rick Clark was made aware of the situation.

Wilson, in the meantime, began requiring invoices for recreation expenses.

Smith didn’t disappoint.

In December of that year, Smith turned in a stack of invoices including — among others — one from BMI for $65,000, five from O.S. Productions totalling $31,726.78, and one for $1,400 from the “City of Six Mile” — Six Mile, of course, being a town.

The invoices, also obtained by this newspaper under FOIA, appeared to have all been generated from the same or similar computer programs. Additionally, none of them contained any official letterheads or authorizing signatures.

Wilson insisted the invoices were never paid.

“We took vacations about then,” he said at the time. “Those invoices never made it out of the hopper.”

How did this whole mess get started? Well, according to Wilson, in the past, the recreation fund was divvied up between the six districts — $50,000 per district, per year — with funds “rolling over” from one year to the next.

Spending was at the sole discretion of that district’s councilperson.

Fast forward to Nov. 28, 2016, when Wilson met with Councilman Trey Whitehurst and discussed, among other things, O.S. Productions and the LCA: Wilson noted in his documentation log that Whitehurst said “Neil was concerned that after the first of the year the new council would come in and try and take control of Neil’s rec account funds.”

A month later, at a special called Council meeting on Dec. 30, Smith attempted to secure “his” funds on his last day in office by transferring $38,735.25 to Whitehurst in executive session.

It didn’t work.

Although county officials admitted to this publication they were never able to produce any actual evidence of illegal activity, they agreed there was certainly the appearance of questionable practices.

When Ken Roper was asked why — as county attorney — he did not report any of his finding to the S.C. Ethics Commission, he cited attorney/client privilege.

“It is always important for an attorney to remember who his client is,” he said at the time. “My client is Pickens County, the organization — not individuals within that organization. In situations such as the one you describe, the rules that govern the practice of law would not allow me to disclose attorney client information to others. Instead, my duty would be to advise the highest authority within the organization of my concerns.”

But someone did.

On Monday morning — before the Council meeting — The Sentinel-Progress obtained a copy under FOIA of the original complaint filed with the Ethics Commission.

According to the filing, it was Gerald Wilson who submitted the complaint under the direction of current Council Chairman Roy Costner.

The complaint was processed on April 18 of last year. On April 27, the Ethics Commission determined the facts were “sufficient to warrant an investigation.”

Why didn’t anyone know? Well, in accordance with Section 8-13-320(9) and (10), all complaints, investigations and their accompanying documents to the Ethics Commission are actually confidential — until probable cause is determined.

In fact, in an email to Wilson, dated April 27, 2017, Interim Executive Director Steven W. Hamm of the S.C. Ethics Commission wrote “the willful release of confidential information is a misdemeanor, and any person releasing such confidential information, upon conviction, must be fined not more than one thousand dollars or imprisoned for not more than one year.”

In the months that followed, one of the first things the “new” County Council did was to freeze the rec fund and completely re-vamp the way funds were dispersed — adding a committee as well as a series of checks and balances to ensure fairness and transparency.

“I am glad to see our new process is working and hope we never return to the ‘good old boy’ system of spending taxpayer money that existed for years,” said Costner at Monday’s meeting. “I look forward to voting on the committee’s recommendations tonight.”

Former County Councilman G. Neil Smith.
https://www.sentinelprogress.com/wp-content/uploads/2018/04/web1_032-1.jpgFormer County Councilman G. Neil Smith. File photo | The Sentinel-Progress
Many of the allegations of improper spending revolved around the then-named Liberty Civic Auditorium.
https://www.sentinelprogress.com/wp-content/uploads/2018/04/web1_205-1.jpgMany of the allegations of improper spending revolved around the then-named Liberty Civic Auditorium. File photo | The Sentinel-Progress
https://www.sentinelprogress.com/wp-content/uploads/2018/04/web1_PickensCountySCseal-1.jpgFile photo | The Sentinel-Progress
Former County Councilman Neil Smith investigated for ethics violations conducted while in office.

By Kasie Strickland

kstrickland@championcarolinas.com

Reach Kasie Strickland at 864-855-0355.