Newman gives up $398,000 contract, steps down as lawyer for penny tax program

Former Columbia City Councilman Brian DeQuincey Newman voluntarily stepped down as a contracted attorney for Richland County’s transportation penny program the day before pleading guilty of failure to file state income taxes.

In so doing, Newman gave up a job that was estimated to provide him a total of $398,000 over five years.

Newman informed the county’s penny program development team Monday evening that he was immediately removing himself, at least temporarily, from his role of producing and updating property title opinions related to county transportation projects, according to transportation penny program manager David Beaty.

On Tuesday, Newman pleaded guilty to charges of failing to file income tax returns and failing to pay state taxes on more than $200,000 in unreported income in 2012 and 2013. He is now serving six months probation and likely faces a temporary suspension of his law license. On Tuesday, he repaid the S.C. Department of Revenue $9,843 for back taxes due for those two years.

Giving up his contract with the penny tax program “was the appropriate thing to do as he looks forward to rebuilding trust and rebuilding his career,” Newman’s lawyer, Bakari Sellers, said Wednesday.

Tax charges against Newman and against Richland County Councilman Kelvin Washington stemmed from an ongoing Department of Revenue investigation into the county’s transportation penny sales tax program.

Washington is slated to appear in court Feb. 22. He is charged with three counts of failing to file state income tax returns and failure to pay state income taxes. Each count carries a maximum one-year prison sentence and as much a $10,000 fine.

DOR director Rick Reames, asked Wednesday if his agency’s investigation is nearing an end, said, “Our investigation continues to be quite active.”

Reames in December asked the State Law Enforcement Division to investigate evidence of potential criminal wrongdoing within the program. To that, SLED Chief Mark Keel said Wednesday, “Our investigation is ongoing.”

The DeQuincey Newman Law Firm, in which Newman is the sole attorney, was hired as a subcontractor by the penny program’s development team of M.B. Kahn Construction Co., ICA Engineering and Brownstone Construction Group. He is contracted with the development team, not with the county, Richland County officials say. The county pays the program development team, which selects and pays its subcontractors.

Newman’s work for the penny team has consisted of researching property owners and providing title opinions and updates for any instance in which the county needed to acquire a right of way for a transportation project, Beaty said.

In the year since the program development team’s contract was executed with the county, Newman’s firm has been authorized to do about $107,000 worth of work, billed by product, not hourly, Beaty said. To date, Newman has performed roughly $100,000 worth of work.

The program development team contract signed in November 2014 by the county and the three engineering firms includes an estimate of $398,000 worth of work to be done by Newman’s firm over five years. That money was not set aside by the county for immediate payment, but was to be paid according to periodic work authorizations from penny revenues.

Newman’s separation from the penny program is at least temporary, Beaty said. In the meantime, “we will utilize the services of another attorney,” with the approval of county officials, he said.

On Wednesday, The State newspaper asked both Beaty and the Richland County government to provide reporters with Newman’s actual contract with the penny tax program and the paperwork he had submitted to be reimbursed for his work.

That material has not been released by either Beaty or Richland County.

Newman was on City Council until last week, when his successor was sworn in. He did not run for re-election for a second term.

This story was originally published January 6, 2016 at 7:54 PM with the headline "Newman gives up $398,000 contract, steps down as lawyer for penny tax program."