Company that led Richland dirt road program was involved in W. Va. bribery scheme
The former manager tasked with paving Richland County’s dirt roads previously pleaded guilty in federal court to being involved with kickbacks paid to a West Virginia highway official.
The Dennis Corp. of Columbia, which managed the county’s dirt roads program as part of the penny tax program from 2015 to 2017, was caught up in a highway kickback scandal that led to sentences against the company president and two former employees, federal court documents show.
Company president Dan Dennis pleaded guilty in a February 2017 hearing to the felony charge of conspiring to impede the IRS in collecting taxes on illicit income paid out in bribes. He was sentenced to two years’ probation and fined $5,000.
In Richland County, management of the dirt roads program was transferred from the Dennis Corp. to the county transportation department after the company’s contract expired in 2017. County officials have said they will need to re-do the design work the Dennis Corp. completed on 21 dirt roads as part of the county’s penny road tax program.
Also, a preliminary audit of the penny road program by the state Department of Revenue flagged $648,292 in public relations payments made to the company. The audit said penny tax money should not have been spent on public relations. Dennis has not been accused of doing anything illegal with either effort.
At the 2017 hearing in West Virginia, an IRS agent testified that Dennis knew about illegal payments from his firm to a West Virginia Department of Highways official to “steer work towards Dennis Corporation,” according to a transcript of the hearing viewed by The State. Dennis’s attorney, Sherri Lydon, did not dispute those findings in the executive’s guilty plea hearing.
However, in an interview with The State last week, Dennis said he was unaware of the kickbacks before he was contacted by the IRS. He said the arrangement was the work of two former Dennis Corp. employees who worked in its West Virginia office, James Travis Miller and Andrew Nichols, who were placed on probation for their role in the kickback scheme, according to the Herald-Mail of Hagerstown, Maryland.
The West Virginia case resulted in federal charges being brought against five people, the Dennis Corp. and a West Virginia firm in a scheme to pay an employee of the West Virginia Division of Highways to funnel highway work towards the Dennis Corp.
Dennis said he pleaded guilty because a prosecution of the Dennis Corp. itself risked putting the company out of business.
“I took responsibility. I own the company, it happened on my watch,” Dennis said in a three-hour meeting with The State reporters last week.
Lydon, then a Columbia-based attorney, went on to be appointed the U.S. attorney for South Carolina and then named a federal judge by President Donald Trump.
Dennis said the scandal helped improve internal procedures at the company, with Dennis now signing off on spending personally.
Closer to home, the Dennis Corp. was sued along with several other companies and the town of Irmo after 3-year-old Jacoby Latta was killed by a falling tree branch in Irmo Community Park in 2014.
Dennis Corp. did the design work for the park during construction as a subcontractor of Grimball, Cotteril & Associates, including assessing the trees around the site. The company was accused of negligence in its design of the park in a 2016 lawsuit.
After Jacoby’s death, Dennis and a field inspector went to the park to determine where the tree was located, Dennis said. Finding the hole where the tree had been removed, Dennis determined the tree was in a part of the park where the corporation’s design called for the tree to be removed.
Dennis said he apologized to Jacoby’s parents when he saw them, and the corporation’s insurance policy paid out $750,000 to the boy’s family in 2017.
He said he felt for the Lattas because his family had adopted a young boy the same age as Jacoby. “I design things to help people, not kill them,” he said.
Dennis managed the county’s dirt roads program as part of Richland County’s $1 billion penny tax roads program, tasked with paving 560 dirt roads in the county. To date, 62 roads have been paved, a total of just over 10 miles, out of a total of 223 miles scheduled for paving.
In 2012, Richland County residents voted to approve a penny sales tax on every dollar spent in the county, designed to raise $1 billion over 22 years. The money was to go to roads, mass transit routes and bike and pedestrian improvements.
The program has been plagued by spiraling costs that on many projects threaten to outpace the money approved in the referendum, and accusations of improper spending by the county. The state Department of Revenue has said the county has paid for services that state law says cannot be funded by penny tax revenue, including public relations.
Currently, Richland County is redesigning 21 dirt roads from the Dennis Corp.’s initial package, saying the current designs can’t practically be built. The Dennis Corp. said its initial work was designed to S.C. Department of Transportation standards as requested by the county, even on shorter, less-trafficked dirt roads Dennis said could be more flexibly designed.
Public relations payments to the corporation included money for a series of public meetings on the dirt road program. Besides seven meetings required in the contract, the Dennis Corp. conducted an additional 13 at a cost of $7,000 each. Most of those meetings were added at the request of former Councilman Kelvin Washington for his large Lower Richland district, Dennis said, some of which were scheduled to take place just two days and a few miles apart.
Dennis said the $7,000, split between the engineering firm and two consultants, was calculated based on the number of hours of preparation that went into the meetings.
This story was originally published February 10, 2020 at 10:31 AM.
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