Header Header Header ghghgh Subheader Subheader The Duel: Feuding prosecutors, and the meltdown of an ethics probe

David Pascoe

It was a long time coming, this grand jury, and the week before Easter special prosecutor David Pascoe was about to pull the trigger.

For months, Pascoe and agents with the State Law Enforcement Division had worked on a public corruption case targeting state lawmakers — a spinoff of one that took down Bobby Harrell, the Republican leader of the House, previously one of the most powerful men in South Carolina.

But 17 months had passed since Harrell’s guilty plea, and political observers had begun to question whether the probe would stop with Harrell. And if that happened, what would that say about other efforts to hold lawmakers accountable? State senators had already blocked reforms of the state’s loophole-ridden ethics laws.

But unknown to many Columbia politicos, Pascoe had worked quietly to move the investigation forward. He and SLED Chief Mark Keel had sought permission from Circuit Judge Clifton Newman to use the state grand jury. Newman had given his OK. Now, for the first time, Pascoe could take SLED’s findings before a group of state residents.

Then everything fell apart.

Last week, S.C. Attorney General Alan Wilson fired Pascoe from the case, publicly calling him a liar and saying he was “tainted.” Wilson then pitched the case to another solicitor, Dan Johnson, who said he wouldn’t go along unless the state Supreme Court gave a green light. The legal community was stunned. After all, Wilson had handpicked Pascoe to serve as a special prosecutor because of an unidentified conflict of interest involving several state legislators. Amid the confusion, stunned government watchdogs called for federal intervention.

“It was a monumental, catastrophic meltdown,” said John P. Freeman, a legal ethicist at the University of South Carolina School of Law. He remembered a comment from a senior judge who said that when lawyers recuse themselves because of conflicts of interest, they’re supposed to “stay on the curb.”

But Wilson waded directly into traffic, leaving the public wondering: Was it just a turf war, or is there legitimate legal issue at stake? Or is Wilson trying to protect someone? And beyond the feud, how would this affect SLED’s investigation? Have Wilson’s actions tainted it, possibly allowing the probe’s targets off the hook? And what does this feud do to the public’s trust?

Before the meltdown, Alan Wilson, 42, was a rising star in the Republican Party. He’s the stepson of Joe Wilson, a longtime politician who himself had risen from the S.C. Senate to the U.S. Congress. He’d served with the National Guard in Iraq, supervising convoys that came under fire. He’d burnished his legal credentials as an assistant attorney general under then-AG Henry McMaster, who once called him “fearless.” And in 2010, Wilson ran for the AG’s post himself, backed by Richard Quinn & Associates, one of South Carolina’s most connected political consultants.

Headed by Richard Quinn, Richard Quinn & Associates had clients such as Strom Thurmond, John McCain, Ronald Reagan and Lindsey Graham. And RQ&A had a record of helping candidates grab the attorney general’s post, starting with Charlie Condon in 1994, the first Republican to win since Reconstruction. Other clients included McMaster.

Meantime, Richard Quinn’s son, Rick Quinn, a Lexington lawmaker, had been House Majority Leader in the early 2000s. All told, Wilson would spend about $500,000 in campaign funds with RQ&A during his campaigns. With the consultant’s help, Wilson won in 2010, becoming the nation’s youngest attorney general and was re-elected in 2014. Adam Piper, who listed as a former associate with RQ&A on his LinkedIn profile, became a high-level aid and eventually Wilson’s deputy chief of staff.

After his election, Wilson, who declined to comment for this story, earned high marks for tackling public corruption cases. In 2012, he won guilty pleas from former Lt. Gov. Ken Ard, who among other things was charged with buying an $800 dress for his wife and filing it under “supplies” in his disclosure forms. Wilson’s office prosecuted former state Sen. Robert Ford, a Democrat from Charleston who used campaign funds to buy male enhancement pills and adult novelty items.

But Wilson’s biggest corruption case would be one against Harrell, a West Ashley insurance executive. As House Speaker, Harrell had accumulated tremendous power. He and his supporters fought back. Wilson was accused of abusing his office. And Wilson was vulnerable after making errors on his campaign disclosures. The errors triggered complaints from the State Ethics Commission, which eventually dropped charges after Wilson refunded improper donations and admitted his mistakes. But amid these questions, Wilson handed the Harrell case to 1st Circuit Solicitor David Pascoe, a Democrat.

“It was a gamble,” Wilson told The Post and Courier in early 2015. “I basically abandoned the most powerful investigative tool in the state.”

For Pascoe, who declined to comment for this story, the Harrell case presented its own high-stakes complications. Harrell’s son, Trey, had worked for him in 2013, prosecuting minor crimes. If Pascoe botched the prosecution, his reputation in his district and across the state would take a hit. And, like Wilson, Pascoe was an ambitious man. A graduate of The Citadel and USC’s law school, politicos in Columbia had wondered whether he might someday have his eyes on the attorney general’s seat.

Within two months of getting the Harrell case, Pascoe took SLED’s findings to the state grand jury. The grand jury indicted Harrell on charges that he used campaign funds to pay for his private plane and other personal benefits. About one month later, Harrell pleaded guilty to six misdemeanor charges. He resigned his House seat and agreed to help SLED in a continuing corruption investigation.

Pascoe then handed the case back to Wilson, thinking he was done.

But months passed without any additional charges, and then last summer, Wilson asked Pascoe to take over the spin off probe. In a statement, Wilson’s office said he recused himself “out of an abundance of caution” because the case involved “certain legislative members” mentioned in SLED’s report.

The SLED report blacked out sections identifying the lawmakers, a tantalizing void that set Columbia’s rumor mill on fire.

As the Harrell case unfolded, a chorus grew louder over ethics reform. In the previous session, several lawmakers introduced bills to tighten ethics laws, but the 2015 session ended with the bills stuck in the Senate.

Reformers cited the Harrell, Ard and Ford cases as examples of a wider culture of ethical abuse. Last fall, The Post and Courier and The Center for Public Integrity revealed in “Capitol Gains” that some lawmakers used their campaign war chests like personal ATM machines, money machines that dispensed nearly $100 million since 2009 and bought lawmakers everything from AARP memberships to GoPros.

The “Capitol Gains” investigation also found that Rick Quinn, the Lexington lawmaker, spent 80 percent of his campaign money on companies run by him and his father. Former House Majority Leader Jim Merrill of Charleston earned more than $215,000 from fellow lawmakers who in many cases simply described the Republican’s public relations work as “campaign expense,” “consulting” or “mail.” Quinn and Merrill declined to comment for this story.

At the same time, a number of lawmakers padded their paydays by profiting from business deals with state and local government. Twenty current and former lawmakers pulled in about $16 million from such contracts since 2009 — some from the very agencies whose budgets they oversaw.

In the wake of “Capitol Gains,” government watchdogs wondered whether Pascoe’s investigation would energize the ethics reform debate. Would any other lawmakers be indicted?

But more time passed without a word.

Until Pascoe cracked open a window.

In December, and without naming names, Pascoe asked Alan Wilson’s office for a formal legal opinion about two questions:

Was it legal for a member of the General Assembly to spend campaign money on a business operated by the lawmaker or a family member?

And was it legal for a House majority leader to “cause or influence” a legislative caucus to hire “a business in which the Majority Leader has an economic interest?”

They were the first hints about the direction of Pascoe’s case — and that legislative caucuses might be at the center of SLED’s findings.

In simple terms, caucuses are meetings where lawmakers gather to talk about legislative tactics and strategies. But few things are simple about South Carolina politics, including legislative caucuses.

The largest caucuses have staff and slick websites. They spend large sums on conferences at resorts. Much of their inner workings are behind closed doors and not subject to state open records laws, though several media organizations have challenged this in recent years.

“The legislative caucuses basically decide what parties are going to promote and what they’re going to oppose,” said Mike Rose, a state lawmaker for 13 years who now sits on the board of directors for Common Cause South Carolina.

They also handle millions of dollars. Since 2009, legislative candidates have poured at least $680,000 from their campaign accounts into caucuses, a Post and Courier analysis shows. State candidates and lawmakers spent an additional $121,000 on caucus retreats, meetings and meals since 2009. Many retreats took place at such resorts as Charleston Place and The Sanctuary on Kiawah Island and meals at such restaurants as Ruth’s Chris Steak House. Meantime, corporations and other special interests chip in even more cash — contributions that are all-but-secret. Last year, The Nerve, the investigative arm of the S.C. Policy Council, reported that the House and Senate Republican and Democratic caucuses spent nearly $9.5 million from 2008 through 2014.

“They can be used as political slush funds,” said John Crangle, Common Cause’s executive director in South Carolina.

In a letter to Wilson, Pascoe said he thought it was a criminal offense for lawmakers to steer caucus money to businesses they ran or were operated by family members.

The attorney general would say otherwise in a 46-page opinion.

The opinion was remarkable for its length and for its selection of precedents, including a case from 1876 in Alabama. The attorney general argued that caucuses were private organizations. And because they were private, lawmakers didn’t run afoul of the law simply because they make money doing business with the caucuses.

Government watchdogs such as Crangle rolled their eyes. The opinion was more proof that the state needed stronger ethics laws.

In January, with a fresh session under way, Gov. Nikki Haley in her State of the State speech asked senators to stand if they supported ethics reform.

Most stayed in their seats.

Just before Easter, with state lawmakers poised to take another look at various ethics bills, Pascoe’s role as special prosecutor was thrown into disarray.

After he and SLED chief Mark Keel asked Newman to OK use of the state grand jury, Wilson’s deputy attorney general John McIntosh, drove to the Lowcountry to speak with Newman in person. It’s unclear what they discussed. Meanwhile, in Columbia, McIntosh ordered James R. Parks, clerk of the state grand jury, not to swear in anyone — a move that effectively blocked use of the grand jury.

On Good Friday, Pascoe asked the state Supreme Court to intervene, accusing Wilson of impeding his investigation.

Then, last Monday, in a letter to Pascoe, McIntosh wrote he was “deeply troubled that you have sought without authority to initiate a State Grand Jury investigation regarding the redacted portion of the SLED investigation.”

McIntosh argued that only the attorney general can do this, “and you have neither sought nor received such authority.” He said that Pascoe was off the case.

That same Monday, Pascoe fired off a letter saying the “Attorney General misunderstands the posture of our current dispute” and needs to reconsider. “To allege that I (along with the Chief of SLED and a Circuit Court Judge) unlawfully attempted to initiate a State Grand Jury investigation is not consistent with the facts or the law.”

Pascoe continued: “As you know, your office recused itself from this matter and designated me to investigate and prosecute it the Attorney General’s stead. ... To attempt to un-recuse your office is in my opinion inconsistent with the law concerning recusal and an extraordinary position to take.”

Pascoe said he intended to “proceed on my current course.”

Furious, Wilson on Wednesday took his side public.

Wilson held a press conference in the state grand jury room. Behind him were three other attorneys general: Travis Medlock, a Democrat who helped create the state grand jury system, and two Republicans, Charlie Condon and Henry McMaster. Medlock later said he was there to protect the authority of the grand jury.

“I hatched that fella and I like to stand for its integrity.” McMaster declined to comment and Condon referred questions about his presence to Wilson’s office.

Wilson’s voice was tight. Pascoe was “tainted,” he said several times. “He clearly did not know what he was doing” with the case. In fact, Pascoe wasn’t even his first, second, third, fourth or even fifth choice to handle the corruption probe. He’d bungled the one case against Harrell, he said, without explaining how. Pascoe’s submissions to the Supreme Court were “filled with half-truths, misinformation and at least one outright lie.” He dismissed that he was trying to impede an investigation.

“We have no clue whatsoever what is going on,” Wilson said, declining to mention that his office had once had more than 1,500 pages of documents from SLED’s investigation. The situation, he summed up, was “nothing but a glorified turf war.”

On Friday, Haley’s press secretary, Chaney Adams, defended SLED chief Mark Keel as “an exceptional chief” who “has always proven to be a professional, that he has never allowed politics to interfere with any investigation, and that his integrity and management of SLED are above reproach. He absolutely has her complete confidence.”

Many in the state’s legal community remain stunned by Wilson’s actions and say he may have irreparably harmed SLED’s investigation.

“Why are you holding a press conference?” said Freeman, the USC law professor who has taught ethics for 35 years. “Why are you out there on the field playing when you said in writing that the thing for you to do is to sit on the sidelines and recuse yourself?”

Freeman cited a case in which a former Family Court judge in Charleston, F.P. “Charlie” Segars-Andrews, recused herself from a domestic law case because of a conflict but later stepped in again. A defense lawyer challenged this, and she eventually lost her family court judgeship.

Lawyers typically don’t go after each other with such sharp knives, Freeman added.

“We have a civility oath that says we’re supposed to be brotherly and sisterly to each other.” And the word “liar” has special power among lawyers. “If you lie to a judge, you can lose your license,” he said. But now, “this term ‘liar’ is out there now and being used like it’s a third grade playground, and it’s amazing to me.”

Worse, Freeman and others said, Wilson’s statements could affect the probe itself.

Calling Pascoe a liar and tainted could allow defense lawyers to challenge the prosecution of any future cases.

It also chips away at the public’s already shaky trust, he and others have said.

“I don’t know how much the public confidence has in anything the state does,” said Rose. “Are people thinking now that (the targets of the SLED investigation) are going to get off now?”

Rose and others say the federal government may have to get involved, as it did in the early 1990s with its Operation Lost Trust investigation into Statehouse corruption.

“It’s very surreal,” said Lynn Teague, vice president of issues and action for the League of Women Voters of South Carolina. The group has pushed hard for ethics reform, and she fears that state lawmakers will use the feud to justify inaction — that it shows state lawmakers can police themselves better than the attorney general and a special prosecutor. “They’ll say, ‘Look at the meltdown.’ ”

Many lawmakers are honorable people who work hard to improve the state, she said, but “we have an issue of public trust. Legislators have told me over and over, ‘We’re not hearing from (constituents) about ethics reform.’ But I tell them, yes, you’re hearing from them when they say they don’t trust the government.”

Cynthia Roldan, Schuyler Kropf, Gavin Jackson and Glenn Smith contributed to this report.