Richland Penny Sign

A Richland County Council member is asking for the full release of an audit of the county's transportation penny tax program, portions of which were only shown to Council members after they signed a non-disclosure agreement.

Republican District 6 Councilman Joe Walker III sent a letter to accounting firm Cherry Bekaert asking for the full release of a 2017 audit of the penny program's Project Development Team, the collection of private companies that has, since 2014, been paid $6 million a year to manage the county's transportation penny initiative.

The transportation penny program, which was approved by voters in a contentious 2012 referendum, is a 1 percent sales tax that is set to raise $1 billion over a two-decade period for road and other transportation projects in the Midlands. It is also a critical source of revenue for the COMET bus system.

The county's relationship with the PDT is coming to a close. Its agreement with the private companies ends on Nov. 3, and the county plans to bring administration of the program in-house.

In his letter to the accounting firm, Walker notes that members of Council were only allowed to see certain findings in the 2017 audit after signing a non-disclosure agreement. He says Council members received a "mandate" to sign the NDA before viewing the information.

"I question the validity of forcing an elected public official to maintain confidentiality as it pertains to the results of a publicly funded audit on a public tax program," Walker wrote in his letter to Cherry Bekaert. The councilman went on to say that the public "deserve(s) to know" the full findings of the audit and that, if the full findings aren't made public, he has constituents that are prepared to go to court to compel them to be released.

On July 29, Walker sent letters to state Attorney General Alan Wilson and U.S. Attorney Sherri Lydon, asking for state and federal criminal probes into possible corruption in Richland County government. 

Richland County has recently been in the headlines in connection with a lawsuit against the county over the settlement it paid to former County Administrator Gerald Seals, who was fired in 2018. 

As noted by The Post and Courier, Seals received a $1 million settlement after his dismissal, in part, to protect council members from potential lawsuits. Council members who voted to remove him cited his decision to have the county invest in acquiring real estate for a new county building without council’s approval.

Seals has said that he was removed because he would not acquiesce to illegal and unethical council requests.

Seals has alleged that he refused a land deal and other actions that would have violated the law and county guidelines, according to a deposition he gave in the lawsuit that seeks to dismiss his $1 million settlement.

In his letter to the accounting firm calling for the release of the penny program audit findings, Walker referred to his request for the criminal investigation.

"I have requested that Attorney General Alan Wilson initiate an investigation into questionable practices and allegations of impropriety at the Richland County Council level," Walker wrote. "I believe this audit and the associated mandate for secrecy fall square into those questionable activities and have provided [Wilson] a copy of this letter as a supplement for my initial request for investigation."

Walker is a first-term councilman. He won the District 6 seat in 2018. That seat was long held by Councilman Greg Pearce, who retired from Council last year.

Richland County's transportation penny program has long been dogged with controversy.

Questions about the initiative began to fester in 2015, when the state Department of Revenue began to look into penny spending. Rick Reames, who was director of the state tax agency at the time and has since moved on to the private sector, said the department’s probe into the penny “uncovered millions of dollars of potential fraud, waste and abuse.”

The county and DOR subsequently shot lawsuits back and forth at one another, and the legal escalation eventually led to a March 2018 opinion from the state Supreme Court. That opinion called into question a number of expenditures that were being paid with penny tax money, including monthly $25,000 payments to a pair of public relations firms, $550,000 in penny money used to establish a small business leadership fund, and cash for what the court called a “vague and duplicative” mentor-mentee program.

Years of rancor about those expenditures came to a head in February, when County Council agreed to begin reimbursing the county's transportation fund for millions of dollars in penny tax expenditures that were unallowable per the S.C. Department of Revenue and state Supreme Court. Council authorized an initial $1 million payment from the county’s general fund, likely the first of several. Thompson told County Council that there are “approximately $3.4 million of expenses that should not have hit the penny fund budget.”

Meanwhile, the county is struggling to fund all of the projects that were promised in the initial penny referendum. It is looking for ways to handle a roughly $140 million increase in costs since the measure initially passed.

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