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August 27, 2014

Lawmakers question decision in Benjamin ethics case, seek to strengthen law

Key legislators involved in trying to rewrite the state’s ethics law said Wednesday they want to consider tightening it in the wake of an ethics commission decision that Mayor Steve Benjamin did not have to disclose a free trip to Florida paid for by a developer interested in doing business in the capital city.

Key legislators involved in trying to rewrite the state’s ethics law said Wednesday they want to consider tightening it in the wake of an ethics commission decision that Mayor Steve Benjamin did not have to disclose a free trip to Florida paid for by a developer interested in doing business in the capital city.

“It’s obvious it does need to be clarified if that is the interpretation,” said Sen. Larry Martin, R-Pickens, chairman of the Senate Judiciary Committee.

Martin was responding to the State Ethics Commission’s 7-0 vote on Wednesday that Benjamin did not have to report a Dec. 10, 2010, trip to Orlando on developer Richard Zahn’s private jet.

The short visit included Benjamin and three S.C. State University officials being chauffeured in a limousine, taken to dinner and to a strip club, where they were provided with $5 bills to tip dancers, according to testimony in this summer’s federal public corruption trial of Jonathan Pinson, then chairman of the university’s board. Two women from the club were paid to return to the hotel with the group, witnesses said.

“Our job is to enforce the law as written by the Legislature, not to try to infer something from that,” ethics commission director Herb Hayden told reporters after the 11-minute meeting.

Sen. Wes Hayes, R-York, former chairman of the Senate Ethics Committee for 12 years, said he wants to determine if there is a loophole in the language of the law and then to close it.

Benjamin did not attend the commission’s meeting but issued a statement afterward.

“The South Carolina Ethics Commission’s unanimous decision has concluded what I have always maintained: that I complied with the law,” the mayor wrote. “I respect their decision and the rule of law.

“At the end of the day I’m proud of the fact that when faced with wild speculation and innuendo we stood up for the facts and, when it was over, the truth won out.”

Two of the newly appointed commission members decided not to participate in the vote because they know the mayor personally. Sherri Lydon and Regina Hollis Lewis recused themselves from the meeting, which was the first in the nine-member commission’s 38-year history to be convened as a teleconference, agency staffers said.

The issue before the commission was whether Benjamin had to submit a revised statement of economic interest reflecting that he, as mayor, received a gift, in this case a free trip.

The $8,000 trip became public in June during the Columbia trial of Pinson and fellow Greenville businessman Eric Robinson. Pinson and Benjamin have been friends and business partners for about a decade. The mayor met Zahn for the first time during that trip, according to evidence in the trial.

Benjamin was not charged or called to testify during the trial. Pinson was convicted on nearly 30 charges and is seeking to have the verdict overturned or to be granted a new trial. Robinson was found not guilty.

Hayden told the commission that he does not believe Benjamin should have disclosed the trip as a gift because Zahn did not have a contract pending before city government.

Hayden also said that what Zahn wrote or said afterward should not affect the agency’s decision.

“Anything that happened after the trip is irrelevant,” Hayden said, adding that the commission staff did not review transcripts of Zahn’s sworn testimony during Pinson’s trial or give much weight to a Dec. 17, 2010, email Zahn sent to Benjamin and others afterward.

Zahn wrote that it was “an honor to meet you and discuss your vision for the city of Columbia.” Zahn also said that he his financing team “are interested in development opportunities in Columbia, SC.”

He proposed a development workshop in January 2011 to discuss “a possible strategy for the city of Columbia.” No specific projects were mentioned in the email.

In 2010, the Columbia Housing Authority was considering whether to seek bids to redevelop Gonzales Gardens, Columbia’s oldest public housing complex. The agency ultimately rejected all the bids, including one submitted by Zahn, authority director Gil Walker has said.

“The Columbia Housing Authority is not the city of Columbia,” Hayden told The State newspaper in an interview after the meeting. “If there was no contract at the time the trip was taken, anything subsequent can’t apply.”

The housing agency’s board is appointed by City Council.

Hayden also said in making his recommendation to the commission before the vote, he did not factor in testimony from the trial.

The mayor’s lawyer, Greg Harris of Columbia, wrote a letter to the commission on July 16, citing portions of Zahn’s testimony in which the Florida businessman could not recall details about the mayor’s involvement with the trip.

“Evidently, Benjamin’s presence and role at the December 2010 trip was so insignificant that Zahn had no recollection of how or why Benjamin was invited,” Harris wrote.

But in other testimony during the trial, Zahn described how Benjamin was helping him with his interest in the city.

Zahn said he and Pinson were focusing their efforts on Gonzales Gardens, though they had their eyes on the proposed Bull Street neighborhood, too.

Prosecutors played a Oct. 29, 2011, telephone call intercepted by the FBI.

On the tape, Zahn and Pinson are heard discussing Benjamin’s help with scouting an office location in town for the business Zahn and Pinson hoped to open.

“Steve got somebody looking for them so he should have some spots on Monday or Tuesday to kind of have us look at them on paper,” Pinson said to Zahn.

“Who is the Steve that you understood him to be talking about?” prosecutor J.D. Rowell asks Zahn on the witness stand.

“Mayor Benjamin,” Zahn answers.

“You all talk about putting an office in Columbia,” Rowell said. “Are you referencing an actual office space for your partnership?”

“Yes,” Zahn said.

“Based on this call, what was Steve looking for for you and Mr. Pinson?" the prosecutor asks.

“An office space close to the capitol or downtown,” Zahn answers.

Sen. Martin said the commission’s decision Wednesday does not fit with his understanding of the law requiring disclosure of gifts. Martin said he voted on the legislation when it was written in the early 1990s as a member of House of Representatives.

“It’s pretty easily understood,” he said. “If you meet someone and they don’t know you, they’re wanting something. Those of us in public office pretty much understand that.

Anything other than something of miniscule value, “you have to disclose it,” Martin said.

He said he will direct the staff of the Senate Judiciary Committee to review the commission’s decision on Benjamin and advise him whether to seek a change in the law. Hayes said he agrees with Martin’s approach.

Rep. Bruce Bannister, R-Greenville, the House majority leader, said he and most legislators interpret the reporting provision of the ethics law to require disclosure of a trip like the one Benjamin took.

Because of the commission’s decision, Bannister said the House, too, will revisited that provision as the General Assembly tries again next year to update the law.

“I suspect that will also be part of trying to get comprehensive reform,” Bannister said.

Rep. Kenny Bingham, R-Lexington and chairman of the House Ethics Committee, said he would withhold comment until he reads the state agency’s decision.

It is common practice in business recruitment at the state and local government levels to meet prior to a contract being signed.

Common Cause director and government watchdog John Crangle said he believes the commission didn’t apply the law strictly in this situation.

Crangle, who has testified on ethics many times before legislative committees, said the law is clear. But he added, “Maybe we need to have some overkill in the language and close the loophole that Benjamin slipped through.”

Wednesday’s decision by the commission reverses public statements by the commission’s chief attorney, Cathy Hazelwood. She told Columbia weekly newspaper Free Times in July that it was “a slam dunk” that Benjamin should have reported the trip.

“He didn’t get invited because he’s a nice person,” Hazelwood told the newspaper. “He got invited because he’s the mayor of Columbia.”

Hazelwood told The State at that time that she was sending Benjamin a standard letter “when a filer fails to disclose something.”

Asked Wednesday if Hazelwood could be interviewed to elaborate on her statements, Hayden said, “No. Cathy doesn’t speak for this agency.”

Hazelwood for years has responded to media inquiries about the state’s sometimes arcane ethics law and how it applies in specific cases. She no longer is allowed to speak to reporters after commission chairman James Burns of Columbia asked Hayden to review whether the agency needs a media policy. Burns referred questions Wednesday to Hayden.

Harris, the mayor’s attorney, also wrote in the July 16 letter that Hazelwood had twice told Benjamin in 2011 he did not have to disclose the trip.

Also in the letter, Harris wrote, “There have been numerous instances where actions taken by the SEC (State Ethics Commission) have been mischaracterized by the press. The same has occurred here.”

Harris would not specify in an interview with The State which mischaracterizations he is citing.

Hayden said a reporter provided Hazelwood with incorrect information that Benjamin had taken the trip “in his official capacity.” Hazelwood’s answer was accurate if the trip had met that standard, Hayden said.

Benjamin and his lawyer have argued that the trip was a personal one, not made in his capacity as mayor.

The State newspaper asked Benjamin and his chief spokesman Wednesday to elaborate after the meeting on his contention of “wild speculation and innuendo.” Neither responded by press deadline.

But in his statement, the mayor also said, “I am deeply humbled and grateful by the support I’ve received from my family, friends and the people of Columbia as we continue to move forward in serving them and making our city the very best it can be.”

 

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