Lost Trust shook state 20 years ago
COLUMBIA -- Drugs and booze flowed freely among a boastfully corrupt group of South Carolina lawmakers who called themselves "the Fat and Ugly Caucus."
They were known to cut deals in the halls of the Legislature, or after hours in hotel bars where cash and bribes helped push through favors.
Unknown to most of them, the FBI was watching. When the Statehouse sting known as "Operation Lost Trust" snapped shut in the summer of 1990, more than two dozen lawmakers, lobbyists and others would be caught in what participants recall as the largest legislative public corruption prosecution in U.S. history.
Today, 20 years later, many of those involved in the prosecution look back with pride. "It was absolutely a snake pit," said former U.S. Attorney Bart Daniel, who led the federal government's Lost Trust prosecution and now is a Charleston defense lawyer.
Most of the legislators back then were an honest bunch, Daniel said. "But there were a number of players who went by their own rules or no rules, and they did it with impunity. They didn't care if anyone knew. It was pretty dang close to being that out in the open."
Lost Trust ended with 27 convictions or guilty pleas -- 17 of them from state legislators, one of whom had become a judge. Many of those caught spent months in federal prisons. The crackdown eventually triggered a drastic change in the state's ethics laws. Gifts that once flowed freely were cut off. Even accepting a cup of coffee from a lobbyist became illegal.
The central character in the sting was lobbyist Ron Cobb of Greenville, a former lawmaker who favored cigars and expensive suits. He stood 6 feet, 5 inches tall and drove a shiny Jaguar. After he was arrested for trying to buy a kilo of cocaine, Cobb became a wired government operative who was paid to continue his role as a flashy lobbyist.
As the months went by, Cobb drew lawmakers in with envelopes stuffed with hundred-dollar bills as bait to support an FBI-monitored pari-mutuel betting bill, or legalized horse track betting in South Carolina.
Cobb told authorities he was reluctant to go after his close friend, state Sen. Jack Lindsay of Marlboro. Lindsay, now deceased, was one of the most powerful senior members of the Senate and a target the FBI considered corrupt but was never charged. So Cobb countered that he could provide many more members of the General Assembly for taking improper payments.
"They wanted the Rolls," Cobb said at the time. "I told them I had lots of Cadillacs."
For Cobb, Lost Trust is a distant memory. "That's history and I don't care to discuss it," he said last week in an e-mail exchange with The Post and Courier. He declined to state where he is living and what he is doing now.
Lost Trust went public after the primary election season ended on July 18, 1990, when FBI agents began issuing subpoenas for the campaign records of members of the state House and Senate. They were looking for lawmakers who had reported accepting cash in connection with the failed betting bill. By late August, the first of several rounds of bribery and conspiracy indictments were issued.
During the trials and pleas that followed, lawmakers repeatedly were seen on grainy FBI surveillance tapes accepting wads of money, most of which was never reported. In all, about $30,000 was distributed.
One local payoff recording showed former Rep. Danny Winstead at a North Charleston restaurant stuffing an envelope filled with bills into his back pocket. He was given the money by former local Rep. Bob Kohn, who at the time had been turned into a cooperating government witness.
Like Cobb, Winstead is reluctant to discuss Lost Trust. "Long time ago, long since over with and that's all," he said last week. Kohn added, "It really is so much history so long ago, no one cares anymore." Winstead and Kohn still live in the Charleston area.
While successful in exposing Statehouse corruption, Lost Trust had its critics. Some accused prosecutors of being overly zealous and withholding evidence. Others said the results were racially skewed. Eight of the 15 blacks elected to the 1990 House of Representatives were caught in the sting. Nineteen whites also were convicted. One lawmaker, state Rep. Tim Wilkes of Winnsboro, was found not guilty.
Another Lowcountry figure caught in Lost Trust was former Rep. Tommy Limehouse of Summerville. He was sentenced to 20 months for his role in the bribery scandal, eventually losing his law license. He currently is general manager of an auto auction business.
Limehouse said he also doesn't like to look back. "I don't play 'what if,'" he said last week. But he added that Columbia was a different place in 1990, with different operating norms than today.
"There was white and black, and gray," he said. "And they (the government) came in with a marking pen and drew a line in the gray area. That is not an entirely fair way to do it. I willfully accept my responsibility for drifting into that gray area, but in the culture that Columbia was, the gray area was a safe area."
Enacting the no-cup-of-coffee rule was a good step toward creating a separation between lobbyist and legislator, said John Crangle of the watchdog group Common Cause in South Carolina. But two decades later, Crangle contends that powerful interests have found other ways to buy influence. Political action committees, where money can be collected and doled out to lawmakers, have become the new power wagon, he said, including ones run by the most influential Statehouse leaders, known as leadership PACS.
"What we had back then was 'entrepreneurial corruption,'" Crangle said, describing how lawmakers could be approached one at a time with offerings of cash. "Now it's been institutionalized," he said, saying votes are mobilized or lined up by caucus or lawmaker rather than by one individual interest at a time.
Current members of the Statehouse who were in Columbia during Lost Trust say the state is better off for what happened.
"I don't see the coziness, if you want to use that word, between lobbyists and members of the General Assembly that was there." said Sen. Hugh Leatherman, R-Florence. "It was sad that Lost Trust happened, but it's probably good long-term for our state."