$4 million went to single firm connected to Attorney General and Richard Quinn & Associates
By RON AIKEN
A review of more than 500 pages of financial records and legal documents obtained through the Freedom of Information Act by Quorum shows Richland County paid $5 million in legal bills from May 2016 to August 2017 to six different outside firms, the vast majority of which — $4 million — was paid to Willoughby & Hoefer, a firm whose deep connections to S.C. Attorney General Alan Wilson and political consultants Richard Quinn & Associates have been the subjects of recent reporting about the ongoing Statehouse corruption probe led by First Circuit Solicitor David Pascoe.
Willoughby & Hoefer’s fees — including a single payment $3.15 million on Aug. 1 — are more than 10 times the amount charged by the next highest-billing client, McNair Law Firm, which billed the County $355,000 over the same 16-month period.
Quorum’s review of the County’s legal spending from May 2016 to August 2017 showed payments to:
- McNair Law Firm (governmental affairs), $354,689
- Gignilliat Savitz & Bettis (employment and labor law), $252,125
- Attorney Malane S. Pike (governmental affairs, property tax/assessment issues), $260,933
- Nelson Mullins Riley & Scarborough (governmental affairs), $45,104
- Parker Poe Adams & Bernstein (governmental affairs, accounting and finance compliance), $207,979
- Willoughby & Hoefer (governmental affairs), $3,874,488.
The amounts are easy to discover.
The work performed for them is not.
For this story Quorum asked for both the latest invoice and copy of the contract between the County and each of the firms listed. In the 44 pages provided, any and every mention of specific work performed by a firm on invoices submitted was completely redacted. The only information even hinting at the nature of the work came in generalized summaries in the original contracts between the firms and the County, some of which were signed long after the firm or individual was receiving large, regular payments from the County.
For governmental watchdog John Crangle of the Progressive Network, the sheer amount of money spent on outside counsel is almost as extraordinary as the County’s redaction of specific work done.
“Five million dollars is unbelievable,” Crangle said. “That’s a lot. I don’t know why they’d be spending that much. It baffles me.
“As for whether the billing is legitimate, unfortunately we can’t say. (The firms) may very well be doing work to justify billing such large amounts of money, or maybe there’s what I call a lot of ‘cotton candy’ on the invoice. You need specificity, you need to know what work was performed. It’s all bull (expletive) to black that out.
“What’s the justification for that? If you say it’s because of attorney-client privilege, that only holds up for personnel or contractual issues. And the client in this case are the taxpayers, not staff or Council, because they’re the ones paying the bills. It’s outrageous that the County Attorney (Larry Smith) would agree to allow the attorneys providing public services to be excluded from discovery by the public. The public, the taxpayers, are entitled to know what services were being rendered to justify those fees. It’s irresponsible of Council to allow it.”
WHO’S DOING WHAT, AND WHO’S PAYING FOR IT?
The County has its own legal department headed by Larry Smith, who at $161,287 per year is the fourth-highest paid employee in Richland County behind Richland 2 Superintendent Debra Hamm, Richland County Library director Melanie Huggins and Sheriff Leon Lott.
Assisting Smith are Chief Deputy County Attorney Bradley Farrar ($135,200) and Deputy County Attorney Liz McLean ($93,600). The office had a budget of $1.2 million in FY2016-17 and claimed $708,780 in personnel expenditures, and those totals are budgeted to increase to $1.25 million and $808,651 for 2018-19.
According to its mission statement, the County Attorney’s office is to “provide comprehensive legal services to Richland County, its elected and appointed officials, department heads and personnel,” it reads. The office’s duties, it continues, include “counseling, litigating, representing County entities and personnel in administrative, judicial, and appellate proceedings, drafting pleadings, opinions, memoranda, briefs, motions, ordinances, resolutions, proclamations, deeds, contracts, leases, and other instruments.”
While its mission may be clear the role of outside firms isn’t, and because of the County’s generous interpretation of its redactive authority, only the contracts between the firms and the County offer glimpses of the type of work performed — contracts that invite more questions than they answer.
Even before it received two payments totaling $3.2 million last month, Willoughby & Hoefer already had been paid $702,000 through July — twice the amount paid McNair and nearly three times more than Pike, Gignilliat Savitz & Bettis and Parker Poe Adams & Bernstein.
The only references for the work product come in the subject line of a contract signed Feb. 4, 2015: “Legal Representation and Advice Regarding Right-of-Way and Condemnation Issues, Litigation, and Related Matters.”
“It is our goal to provide legal services of outstanding quality that will be effective in accomplishing Richland County’s objectives in land and right-of-way acquisition,” Mitchell Willoughby wrote in the contract.
Also included is an eight-page invoice, descriptions completely redacted, billing the County $176,673 and dated May 23, 2017.
With no way to know whether the right-of-way/acquisition work involved penny tax projects or not, the question of whether penny tax revenues were used to pay those fees remains open, and the principals involved aren’t saying.
This week Quorum asked Willoughby & Hoefer, County spokesperson Beverly Harris and County Administrator Gerald Seals whether any penny tax projects were in the scope of Willoughby & Hoefer’s work and whether any penny tax funds were used either to directly pay or reimburse other accounts used to pay Willoughby & Hoefer. Quorum has received no response from either party to the contract.
Whether penny tax funds were or have been used to pay legal bills is an issue with serious legal repercussions, especially as the County already is involved in a lawsuit with the South Carolina Public Interest Authority over whether the County’s governing ordinance (No. 039-12HR) allowing expenditures such as those made for public relations work and funding the bus system is constitutional or not given the narrow wording of the state law (SC Code of Laws § 4-37-30) allowing Counties to enact such special use taxes specifically for “highways, roads, streets, bridges, mass transit systems, greenbelts, and other transportation-related projects transportation or transportation-related projects.”
Even if no penny tax funds were used, either directly or indirectly, to pay the $4 million Willoughby & Hoefer billed, the issue of whether or not it worked on any penny tax projects is important because according to the County’s contract with Richland PDT, the LLC formed by three primary companies to run the penny tax on the County’s behalf, it — not the County — is responsible for all penny tax project right-of-way and acquisition issues.
“The PDT will provide Program Development Services and Program Management Services,” it reads. “The major components of Program Development Services and Program Management Services to be provided include … Right-of-Way Acquisition for Individual Projects.”
It is precisely to meet those needs that the County pays the PDT a flat “program management fee” of $6,020,000 a year, or $501,666 a month. In other words, due to the wording of the PDT contract, any firm doing legal work on penny tax projects would be obligated to contract with Richland PDT, not individually with the County, as Willoughby & Hoefer have done.
While the answers would appear simple — either Willoughby & Hoefer have worked on penny-tax projects or they haven’t, and either the County has or has not used penny tax funds to pay or otherwise reimburse itself for legal fees — the lack of any response whatsoever raises legitimate concerns.
“If the County has yet to answer where these funds are coming from and whether or not they’re coming from penny tax funds, that’s a problem,” Crangle said.
While it is unclear whether Willoughby & Hoefer has worked on penny tax projects, other firms Quorum identified have been front and center in the penny tax’s very public legal battles.
In its relatively short life, Richland County’s penny tax has come under significant legal attack from a number of angles and entities, the defense of which has involved several attorneys outside the County Attorney’s office.
- In December 2015, the Department of Revenue began a war of words with the County and attempted to withhold tax revenue from the County. The County fired back with a lawsuit of its own in May 2016 against DOR and won in June. McNair attorney Ned Nicholson led that effort on the County’s behalf.
- Also in 2016, the S.C. Public Interest Foundation sued Richland County for failure to produce Freedom of Information Act requests for penny tax documents in a timely manner and won.
- In December 2016, Richardson Construction filed a suit against Richland County alleging discrimination in a complex procurement case that is currently in appellate court. Attorneys Nicholson and Liz Crum of the McNair firm have been heavily involved in the case and won a ruling denying Richardson’s grievance before the County’s procurement review panel earlier this year.
- After claiming it wanted to fight the charges, Richland County settled a grievance case with former employee Justine Jones for $175,000. Gignilliat Savitz & Bettis assisted the County in that case.
Without invoices describing the hours billed for those cases, it is impossible to know how much the County paid in each circumstance, a fact Crangle is not comfortable with.
“With no descriptions of the work done, how do taxpayers know how much these cases cost?,” Crangle said. “And how do taxpayers know whether these juicy legal contracts the County signed are sweetheart deals for their buddies or not?
“Until the public is allowed to see or they answer, it’s impossible for citizens to determine that the fees are legitimate and taxpayers are getting fair return for their money. It’s taxpayer money to defend taxpayer interests, so why can’t the taxpayer know what he’s paying for and how much?
“Instead, it just looks like it’s party time. It’s a raid on Fort Knox.”
READ: The County’s complete FOIA response here: Outside Legal Spending FOIA Request 8-29-2017