Business

EXCLUSIVE: Columbia city manager hired SC legislators as consultants

(From left) John Scott, Teresa Wilson and Mia McLeod
(From left) John Scott, Teresa Wilson and Mia McLeod

Columbia has hired two state lawmakers to do consulting work for the city, agreeing to pay their businesses up to $49,500 each.

City Manager Teresa Wilson said the city was not trying to buy influence in the Legislature by retaining state Rep. Mia McLeod, who is running for the state Senate, and state Sen. John Scott, both Richland Democrats.

Instead, Wilson said she hired McLeod and Scott for their expertise. Scott’s work, for example, includes advising the city on its application for transportation money from a state agency, she said.

In addition, Wilson also said she decided to hire McLeod and Scott because their businesses – McLeod Butler Communications and C&S Consulting Group – are owned by minority women. Scott’s wife is the president of C&S Consulting.

“This is to the benefit of the city when we can work with minority, women-owned businesses,” Wilson said. “It just so happens that they happen to be legislators.”

Nothing in state law bars a legislator from working for a city or county. Both McLeod and Scott disclose their city earnings on their state ethics filings, where public officials list direct income from government jobs and relationships they have with groups that lobby state government, including the city.

And McLeod and Scott are not the only legislators who do work for local governments or groups that lobby the Legislature. A review by The State newspaper found nine other lawmakers or their businesses were paid $3.6 million during the past eight years by local governments or groups that lobby lawmakers.

McLeod, who was a lobbyist for the city before she was elected to the Legislature, said her relationship with the city does not guide her legislative actions. “I’m not lobbying for the city. I’m doing public relations work.”

Scott said his “transportation management company” provides the city with “technical assistance in light rail, bus routing and administrative direction.”

However, the work that lawmakers do in their private professional lives for groups that lobby state government would cross an ethical line if the lawmakers’ influence actually is being retained, said the head of a good-government watchdog group.

John Crangle, executive director of S.C. Common Cause, said it is sometimes difficult to distinguish between a consultant and a lobbyist at the State House. “Hire them as a so-called consultant, pay them a substantial fee, and they really are a de-facto lobbyist.”

Council members differ on legislative hires

City Councilwoman Tameika Isaac Devine said she has no problem with the city manager retaining the legislators. The lawmakers, whose part-time legislative positions paid an average of $31,000 in salary and expenses last year, have to make a living, she said.

Two other City Council members said they wish they had known about the legislators’ contracts, brought to their attention by The State.

Councilmen Moe Baddourah and Cameron Runyan did not know about the contracts because Wilson retained the state lawmakers directly, agreeing to pay each up to $49,500. Only contracts for more than $49,999 need City Council’s approval.

(McLeod earned about half that before her contract expired in June.)

“The fact that they are public officials gives me huge concern,” said Baddourah, adding the city might need to review its policies. “Even though the salary is very minimal … the process should be open to the public and not (done) behind closed doors.”

“If we’re engaging a consultant, that is the kind of thing that should come to the council,” said Runyan. “It’s just letting the public be aware of the business of the city.”

Columbia Mayor Steve Benjamin said requiring City Council to approve every agreement is impractical. That’s why City Council expanded the city manager’s contract authority, lowering the number of matters coming before council, he said.

“In a perfect world, every single contract – starting at a dollar – in city government should be bid. But it’s not an efficient way to do business,” Benjamin said, adding he did not know the details of McLeod and Scott’s contracts.

“I do know the character of the two legislators,” he said. “Both are of high character, and I trust the judgment of the city manager.”

Lawmakers not alone

Wilson said McLeod and Scott are the only state legislators she has hired. But the Richland Democrats are not alone in finding employment with sources that care about how the General Assembly votes.

Nine other Midlands lawmakers or the businesses they own were paid a total of $3.6 million during the past eight years from public sources or groups that lobby state government, The State found in a review of financial transactions for Midlands’ jurisdictions.

For example, state Rep. Kenny Bingham, R-Lexington, co-owns an engineering design firm that has contracts with the city. Bingham says all his contracts go through a competitive bidding process and are approved by City Council.

Who employs South Carolina’s part-time lawmakers outside the Legislature has been the subject of controversy. For three years, lawmakers have shelved proposals that would make them report more of their income, including private sources and amounts.

Even when disclosed – as McLeod and Scott did – state legislators’ work for local governments or groups that lobby the state can create opportunities for abuse, raising ethical questions about the work the legislators are being hired to perform, ethics watchdogs say.

Lawmakers are allowed to sell their expertise, said Lynn Teague with the S.C. League of Women Voters. But a legislator would cross an ethical line “if what is purchased is the ability to have access” to legislative decision making.

Senator helps seek money for roads

Scott and McLeod do different work for the City of Columbia and report that work differently before getting paid.

In the five invoices the city provided to The State in a public records request, Scott’s company billed the city $4,125 for “consulting and technical assistance services rendered” during the previous month. The invoices provided no other details of the work performed.

McLeod billed the city on an hourly basis, providing the specific dates worked, tasks performed and hours the work took.

A member of the Senate Transportation Committee with a degree in accounting, Scott said he can work with engineering or management teams – whoever the city needs him to work with.

He referred The State to Wilson, the city manager, to talk in further detail about the work that he and his wife are doing for the city.

Wilson said sometimes the city needs “very nuanced technical services that no one else on my staff can provide.”

If the contracts are “in the best interest of the city and ... under the threshold (that requires council’s approval), I will do it,” she said, adding, “I can count the number of times that I do it. It’s not often.”

Wilson said Scott has helped the city with transportation projects, including offering advice on how to apply for money from the S.C. State Transportation Infrastructure Bank. That state agency was created by the Legislature to pay for roads and is funded with state money.

In partnership with other Midlands governments and entities, the city applied to the Infrastructure Bank last year for $325 million to help pay for pedestrian, safety, traffic and railroad improvements at three Midlands “gateways.”

The application still is pending. The Infrastructure Bank meets next later this month but has no plans to take action on the application.

Wilson said she has not asked Scott to contact the state agency directly, adding the city uses Scott’s services internally.

“He’s been able to give us some feedback on ... the types of projects” that would be better to apply for than others, she said. “When we’re deciding whether we need to streamline the application, having a professional” – like Scott – “who’s used to putting together applications like that, working with S.C. DOT (Transportation Department),” gives the city “an added level of guidance.”

Scott’s transportation consulting business, which he co-owns with his wife, was paid $49,500 from August 2014 through June, divided into equal monthly payments. C&S Consulting recently renewed its agreement with the city for another year at the same amount.

Scott did not respond to requests to discuss the work that Wilson said he was doing for the city.

‘Nobody else who has the expertise’

Wilson said McLeod had the expertise she needed when the city was conducting a search for a police chief after the former chief resigned amid ongoing turmoil.

Thinking about who might be able to help, Wilson said she thought of McLeod. The law school graduate and former employee in the S.C. Attorney General’s Office had “a vested interested in the community, and she understands the issues that I’m dealing with,” Wilson said of McLeod.

Wilson also knows McLeod professionally. The two worked together before McLeod was elected to the state House: Wilson oversaw the city’s governmental affairs team, which lobbies state government, and McLeod was a contract lobbyist for the city.

In her more recent role as a consultant, McLeod worked closely with the search committee tasked with identifying a qualified candidate for police chief and ensuring that the community had input in the process, she and Wilson said.

To help with the search, McLeod was paid $200 an hour, totaling $24,300 for work completed November 2013 through April 2014.

After Police Chief Skip Holbrook was hired, McLeod was hired to assist the chief. She was paid $150 an hour for up to 300 hours.

McLeod did not bill for all those hours, which would have totaled $49,500. Instead, she billed for $26,025 for work completed from November 2014 through June when her contract expired.

McLeod said she has discussed with Wilson the possibility of renewing her contract.

Holbrook, the new police chief, said McLeod brought skills to projects with which the Police Department needed help.

McLeod helped Holbrook create a strategic plan and annual report, did copy-editing and gave other guidance, he said. As the Police Department struggled with its transition and efforts to rebuild the community’s trust, McLeod also helped with that messaging, he said.

“I found her to be very helpful in terms of her knowledge of the pulse of the community, business, (the) private sector and government,” said Holbrook, whose department has only one public information officer, who handles media requests. “There’s nobody else who has the expertise” in the department, he added.

McLeod says her work is well documented.

For example, in an invoice for $1,800 provided to The State, McLeod says she spent 12 hours over two days last December reviewing the Police Department’s communications documents, preparing for the department’s media day, reviewing and preparing notes on an MSNBC documentary on officer-involved shootings, continuing “communication and coordination” with the city and police department, and standing by “for media interviews; press release and final edits.”

Wilson approached her because she is good at what she does, McLeod said. “We were successful with the police chief search and the police chief initiatives.”

McLeod said she could not recall a single time her consulting work interfered with her decisions as a lawmaker. Her public and private-sector jobs do not overlap, she said.

With ethics focus, heightened scrutiny

Ethics watchdogs and lawmakers agree that state laws governing how public officials behave are too vague, making it easy to mask conflicts of interest.

But three years of legislative proposals to toughen the laws have failed.

State lawmakers – because of their positions of power – may gain access to business opportunities without breaking a single law, said Teague, whose organization is among the group’s pushing for changes to the state’s ethics law.

One way for the city to avoid the appearance of currying favor with state lawmakers is to make contracts open and competitive, Teague said.

McLeod and Scott are “certainly within the law” since they disclose their contracts, she said. “But one would like to see things awarded competitively ... to ensure taxpayers are getting what they should be getting for their money.’’

Reach Self at (803) 771-8658

Lawmakers in the Midlands

At least nine other Midlands lawmakers, or companies they own, earn income from governments or groups that lobby state government.

State Rep. Todd Atwater, R-Lexington

Business: Chief executive officer and president of S.C. Medical Association, a nonprofit that spent $252,000 from 2013 to 2015 to lobby the state Legislature.

Atwater earns about $400,000 a year in salary and benefits, according to tax filings for the association and its subsidiaries, which include a health insurance company, where he says most of his focus lies.

Atwater, who held that same job before he ran for office, says he has created a “Chinese wall” separating himself from the nonprofit’s lobbying activities, but sometimes he chooses not to vote when he thinks there is a conflict of interest.

For example, in 2011, Atwater recused himself from voting on a bill that would allow the state health and human services agency to lower Medicaid payments to providers. He said he would have supported the bill. In the House journal, he said he did not vote because he wanted to avoid the appearance of a conflict of interest.

State Rep. Kenny Bingham, R-Lexington

Business: Owner, with two partners, of American Engineering Consultants, an engineering-design firm with more than 20 employees

American Engineering was paid at least $2.9 million from July 2007 to present by state agencies, Cayce, Columbia, the Town of Lexington, West Columbia, and Lexington and Richland counties. Bingham said the contracts that his company gets are competitively bid.

State Rep. Kirkman Finlay, R-Richland

Business: Owner of Pinebelt LLC

Finlay was paid $31,097 by Richland County in rent from July 2014 to June. Prior to being elected to public office, Finlay bought a building the Richland County magistrate’s office was renting. The purchase included the magistrate’s lease, first entered in 1998 and renewed in 2008.

Editor’s note: The description of this lease has been updated to correct an error.

State Rep. Ralph Kennedy, R-Lexington

Business: Kennedy Law Firm

Since Kennedy was elected to the State House in 2013, his firm has done very little business with public entities. But Kennedy did handle a right-of-way condemnation case and was paid $98,000 by the S.C. Department of Transportation. The money mostly went back to his clients as part of the settlement, but he also was paid some fees, he said.

State Sen. Shane Massey, R-Edgefield

Business: Partner in Nance, McCants and Massey law firm

The firm was paid about $129,000 from state agencies in legal fees from July 2007 to June 2015.

State Rep. Russell Ott, D-Calhoun

Business: Consultant for S.C. Farm Bureau, an agriculture association that spent $408,000 to lobby the state Legislature from 2013 to 2015.

Ott worked for the Farm Bureau as a lobbyist before he was elected, but resigned during his campaign for the State House. Ott then started a consulting company so he could work for the Farm Bureau as a contractor, being paid $75,000 a year to run the association’s youth-farming operation.

Ott said he opposed and voted to kill a bill that would have regulated the amount of water that large farms can withdraw from rivers when it came before a subcommittee he serves on. The Farm Bureau also opposed that bill. Ott said the proposal would not benefit the bureau financially, so he did not feel the need to sit out on the vote or the discussion.

State Sen. Nikki Setzler, D-Lexington

Business: Partner, Setzler and Scott, law firm in West Columbia

Setzler’s law firm was paid $112,000 by West Columbia from July 2012 to June 2015 for Setzler’s services as city attorney. The firm was paid $93,000 by the Town of Lexington for legal services from July 2010 to August 2015 and $9,300 by state agencies from July 2008 to June 2010.

State Sen. Katrina Shealy, R-Lexington

Business: Shealy’s husband is co-owner of Shealy and Brothers Electric

Shealy and Brothers was paid $123,000 by state agencies between July 2009 and June 2015.

State Sen. Vincent Sheheen, D-Kershaw

Business: Partner in the Savage, Royall and Sheheen law firm

The firm was paid about $36,000 by state agencies from July 2007 to June 2010 and about $51,000 by the City of Camden from July 2013 to August 2015 for legal work. That work was done by another attorney in the firm.

SOURCES: Financial records from the S.C. Comptroller General’s Office, Cayce, Camden, Columbia, Lexington, West Columbia, Lexington and Richland counties, federal tax records and state ethics filings

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