July 12, 2014

Developer’s email raises questions about Benjamin’s 2010 Florida trip

An email from a Florida developer that surfaced during a federal public corruption trial last month is raising questions about Columbia Mayor Steve Benjamin’s assertion that a 2010 trip to Florida was a “personal business trip.”

An email from a Florida developer that surfaced during a federal public corruption trial last month is raising questions about Columbia Mayor Steve Benjamin’s assertion that a 2010 trip to Florida was a “personal business trip.”

The email, dated Dec. 17, 2010, was a surprise exhibit at the trial of former S.C. State University board chairman Jonathan Pinson, a longtime business partner of the mayor. The trial ended July 3 with Pinson’s conviction on multiple counts, including bribery and soliciting kickbacks.

The email – addressed to Pinson but copied to Benjamin – was sent two days after Pinson, Benjamin and several other S.C. State officials returned from a trip to Orlando, paid for by developer Richard Zahn. In it, Zahn tells Benjamin it was “an honor to meet you and discuss your vision for the city of Columbia,” and Zahn proposes a development workshop the following month to discuss “a possible strategy for the city of Columbia.” No specific Columbia projects were mentioned in the email.

But Benjamin’s attorney, Greg Harris of Columbia, said Benjamin went on the trip because he was interested in possible private business opportunities and did not go in a mayoral capacity. Benjamin – in his only public comment about the trial – released a statement July 3, insisting the Orlando trip “was not related in any way” to city of Columbia business.

At the request of the State Ethics Commission, Harris said he is putting together documents about the trip – documents he said will show the trip did not qualify as city business. State ethics law requires disclosure by public officials of trips that others give to them, because of the officials’ public positions, or because the trips concern government business.

But if ethics officials find otherwise, Harris said last week, “we will file an amended disclosure form within 24 hours.”

An Ethics Commission spokeswoman said last week the commission has not yet received the materials from Harris, declining further comment. A timetable for the review was not known.

John Crangle, a Columbia lawyer versed on ethics and public corruption matters, said there were other ways Benjamin could have handled the matter.

Since Benjamin may have found himself in a gray area, Crangle said, the mayor should have disclosed the trip and asked the Ethics Commission for a written advisory opinion as to whether he (the mayor) should reimburse the developer.

“If a trip is a mixture of public and private business, the prudent thing is report it as public business and make full disclosure,” said Crangle. “The law basically says if it’s government business, it should be disclosed – I don’t care whether it was 1 percent government business or 99 percent.”

‘A possible strategy’

At the time of the Dec. 15, 2010, trip, Pinson was S.C. State’s board chairman. The university’s police chief, Michael Bartley, was an old friend of Zahn’s and knew he was looking for development opportunities in South Carolina. Bartley arranged the Orlando trip, getting Zahn to invite Pinson.

In the days leading up to the trip, Pinson told Zahn he was inviting Benjamin, his longtime business partner and Columbia’s mayor. The two were partners over the years on several projects, sharing interests in several restaurants, the Columbia Hilton Hotel and, at one time, Columbia’s Village at River’s Edge public-private housing development. In 2009, as Benjamin readied for a race for mayor, Pinson bought Benjamin’s share in the Village at River’s Edge.

The overnight trip, estimated to cost $8,000 or more, according to trial testimony, was intended to introduce Zahn to potential business partners. Trip expenses included a private plane, hotel, dinner and a visit to a strip club, according to trial testimony. At the hotel, Zahn paid $1,000 for the two young women who worked at the club to visit with him, Benjamin and another man in a hotel room, according to testimony.

Two days after the trip, Zahn sent the email, as chief executive of ZMG Construction, starting off, “I enjoyed meeting the team and I appreciated time (well spent) getting to understand the needs of Columbia, S.C.”

Zahn goes on to say that just after the trip to Orlando, he talked with three potential financing partners “to discuss Columbia opportunities.” He does not specify those opportunities.

Those financing teams, Zahn tells Pinson and Benjamin and the other email recipients, “along with our development and construction team are prepared to meet with you in January to perform a development workshop” to lay out “a possible strategy for the city of Columbia.”

Zahn continues, “Please let me know of your availability in January for a one- or two-day period.”

In the email, Zahn said he would like to see teams “on your side of the equation” participating in the workshop, among them members of the mayor’s economic advisory/downtown development team, chairman and/or president/chief operating officer of the Columbia Housing Authority, head of city grants, and “other relevant city or private team member whom the mayor’s office deems critical to an effective development workshop.”

In a closing paragraph personally addressed to Benjamin, Zahn tells the mayor, “I find your vision and passion focused and on point. Our team and I look forward to the upcoming development workshop.”

A review of the facts

Harris, in an interview last week at his Columbia office, emphasized the mayor’s trip concerned personal business.

Harris, a defense lawyer who formerly served as State Ethics Commission chairman, said he is forwarding information to the commission, because officials there recently had asked for clarification. The Ethics Commission learned about the trip roughly three weeks ago from media reports during Pinson’s public corruption trial.

Among the papers Harris said he plans to send to the Ethics Commission to support Benjamin’s assertion of the trip’s personal nature are emails to and from Zahn and transcripts from the trial. Benjamin said in his statement released July 3 he is “confident that after a thorough review of all of the facts,” ethics officials “ will determine that it was a personal business trip and as such, not a matter to be reported.”

Harris also said:

• Pinson and Benjamin were longtime business partners and, at least on Benjamin’s part, he was interested in possible private business opportunities in going to Orlando. Zahn had not met Benjamin until the trip and only learned he was going on the trip a few days before, when Pinson informed him.
• During the trip, Benjamin no doubt mentioned the city of Columbia and his vision for it, but it was in the normal enthusiastic way that any mayor would discuss and promote his growing city. Nothing specific to any potential Columbia city project was mentioned, Harris said.
• There was no trial testimony that Benjamin discussed any specific Columbia project at the Orlando meeting.
• Sometime in 2011, Benjamin wondered whether he should disclose the trip on his financial disclosure statement. At that point, he telephoned an Ethics Commission staff members and had an informal conversation, giving the staffer a generic (non-specific) description of the trip and asking whether he should disclose it. The staffer, whom Harris did not identify, told Benjamin that he did not have to disclose the trip. Unfortunately, Harris added, there is no record of Benjamin having made that phone call. However, Harris said Benjamin has a pattern of telephoning Ethics Commission officials and getting informal opinions, so such a call is in keeping with the mayor’s practices.

If the Ethics Commission does not find in favor of Benjamin’s assertion, Harris said officials have the power to levy a civil fine. But Harris said he hopes Benjamin’s filing an amended disclosure would satisfy the commission.

After the Ethics Commission rules, Harris added, he will make available to the media all the material he sent to the Ethics Commission.

Harris added that the only reason Benjamin’s name surfaced in Pinson’s trial was to support a major prosecution theory of the case – that Pinson had a pattern of using his public position and his associations with other public officials like the mayor as a way to get money illegally.

Pinson was found guilty of numerous charges involving matters like bribery, soliciting kickbacks, wire fraud, extortion and bank fraud. At the trial, Zahn – who had earlier pleaded guilty to his part in Pinson’s schemes – was a government witness who testified he had offered Pinson a bribe for the Greenville businessman’s help in a land deal involving S.C. State University.

Although Benjamin’s name surfaced several times during the trial, he has not been charged with any crimes, and no specific allegations of wrongdoing have been directed at him.

‘You need to act with an abundance of caution’

Crangle, director of citizens’ group Common Cause of South Carolina of Common Cause, said disclosure forms are important, because they let citizens know who the public official potentially could be accepting favors from.

“It’s designed to show a potential conflict of interest – to notify the public and the news media. And when a politician is aware that the public knows about a potential conflict, the politician is more careful to act correctly,” Crangle said.

It is not prudent to get an oral opinion over the telephone and keep no record of it, Crangle said.

“If it is important enough to make a telephone call, it is important enough to get it in writing,” Crangle said. “Something in writing creates a ‘safe haven’ for you if a question comes up later.”

And neither is a generic, non-specific inquiry sufficient, Crangle said. “You should not give the Ethics Commission a general hypothetical situation –- you should make it fact-specific.”

Crangle said the simple thing for Benjamin to have done was to disclose the trip at that time.

“Any time a prominent public official tries to keep his activities secret, he is probably doomed to failure,” Crangle said. “You need to act with an abundance of caution, and always err on the side of caution.

“Instead,” Crangle added, “the mayor has wound up with egg on his face – a public relations disaster.”

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