Two of South Carolina’s top prosecutors rekindled their long-standing rivalry on Thursday over plans to give outside lawyers a $ 75 million payment for helping the state sue the federal government for not getting rid of unwanted plutonium.
In a landmark letter, First Circuit attorney David Pascoe urged Attorney General Alan Wilson to reconsider the planned payment, calling it an “unfair” amount. Pascoe argued that the measure “smells of political patronage” because it would benefit Wilson’s political allies and a company the attorney general used to work for.
The $ 75 million payment is scheduled to come out of a $ 600 million agreement reached between South Carolina and the United States Department of Energy, after a years-long struggle over a plutonium stockpile for weapons near Aiken that the state wants to remove. The agreement gives the US government more time to withdraw the material; South Carolina may not be able to sue until 2040.
Pascoe, a prominent critic of Wilson, argues that the attorney general has no authority to split the money. According to him, under state law, the state legislature has control over all of the $ 600 million and must be allowed to decide how to spend it. Wilson’s office says the attorney general is in his power to hire outside lawyers – and to pay them.
Pascoe’s objections echo concerns raised last week by Republican Governor Henry McMaster, who suggested that the deal had less to do with the success of the state’s legal strategy and more to do with the “zealous defense and coordination” of its political leaders.
South Carolina’s top leaders have long sought to force the Department of Energy to process the plutonium or move it elsewhere. Members of the state Congressional delegation, including U.S. Senator Lindsey Graham, tried to use their influence on the federal budget and, more recently, their close relationship with the Trump administration to force the issue.
The defense netted them a 2018 White House meeting with President Donald Trump, Wilson, McMaster, Graham and other members of the state delegation. The governor credited the effort for getting the government’s attention.
Wilson dismissed concerns about the size of payments to outside lawyers, saying it is a consequence of securing the largest settlement in state history. In a letter responding to McMaster last week, Wilson said the lawyers’ agreement was signed in 2016, “long before we believed the agreement would be so high.” The deal was updated last year.
“I hope to be criticized for this deal, but leaders must be willing to make difficult decisions, regardless of the political consequences,” Wilson wrote in his letter to the governor.
Wilson also argued that the agreement between his office and outside firms follows a pattern the state has been using since McMaster was attorney general. The larger the agreement, the lower the percentage that lawyers receive. McMaster proposed this fee schedule after his predecessor was criticized for allowing a payment of $ 82.5 million to the law firms that represented South Carolina in a national tobacco deal.
But, for the plutonium dispute, Wilson agreed to increase the percentage back if the legal fight got complicated. And so it was.
According to the lawyers’ agreement, firms were entitled to a further reduction if the case was appealed and the matter spread to other jurisdictions. The plutonium issue was heard in three district courts, and South Carolina even appealed to the Supreme Court, which decided not to hear the case.
Often fighting
Pascoe and Wilson have often found themselves in conflict since they met – sometimes bitterly – during the recent corruption investigation at the Statehouse.
Wilson appointed Pascoe to oversee the case as a special prosecutor, but later tried to withdraw him from the investigation after accusing him of being “tarnished” in his zeal to pursue charges related to influence peddling. Pascoe, a Democrat from Orangeburg, countered by accusing the Republican attorney general of meddling in a case in which he refused because of a conflict.
More recently, Pascoe and Wilson discussed an opinion by the Attorney General’s Office that determined that the Confederate flag hanging in the Summerall chapel of the Citadel is protected by the State Heritage Act. Pascoe, a Citadel graduate, called a “flawed” defense of a racist symbol in a July letter to the school’s president.
In his letter attacking the plutonium deal, Pascoe went after Wilson using the same legal argument that the attorney general used against him to criticize the deals Pascoe made with companies named in the corruption investigation. Wilson argued that Pascoe had no authority to enter into agreements with companies that allowed them to bypass the process in exchange for financial payments to support the investigation.
That money, Wilson argued, belonged to the state’s general fund. Now, Pascoe argues that the money from the plutonium deal as well.
“This is public money,” said Pascoe. “It belongs to the citizens of South Carolina.”
Pascoe argues that the sum is “unscrupulous” because it is more than state promoters and public defenders receive in combined annual funding.
The $ 75 million will be split between two companies in Columbia: Willoughby & Hoefer and Davidson, Wren and DeMasters. A spokesman for the attorney general said his office had not disclosed how the payment would be split. Company representatives did not respond to requests for comment on Thursday.
Previous connections
Mitch Willoughby, founding partner of Willoughby & Hoefer, was Wilson’s former boss before becoming attorney general. He was also president of a Lexington bank that lent Wilson $ 250,000 days before the 2010 run for attorney general.
The loan dramatically inflated Wilson’s campaign chest, giving him the appearance of financial strength that helped him defeat two opponents in that year’s Republican primaries. Willoughby never answered the Post and Courier’s questions about the loan and it is still unclear what help he provided Wilson to secure it, if any.
Willoughby won $ 7 million representing the state in a lawsuit accusing a New York bank of mismanaging South Carolina’s pension investments. Work on that process began during McMaster’s tenure as attorney general, and Wilson, a Republican Lexington, said he had little involvement in the case after he took office.
Between the time Wilson took over in 2011 and 2017, Willoughby’s firm earned nearly $ 1.2 million representing the attorney general’s office on three other matters – making the firm the second biggest winner among outside lawyers hired for cases hourly wage, according to figures provided by Wilson’s Office.
Wilson’s office said Willoughby & Hoefer was hired because the company approached the state with a plan to sue the federal government and a pre-written lawsuit. He said Wilson and former governor Nikki Haley decided in 2016 that the state should pursue the case. The deal was updated last year because the scope of the case had increased.
“Both agreed that Willoughby & Hoefer should take care of the case because they had already done all the legwork,” said spokesman Robert Kittle. “Outside companies took all the financial risks in advance, with no risk to the state if they lost the case.”
Ben Mustian, another outside lawyer involved in the case, also worked for Willoughby’s firm before starting his own practice. Mustian is the son-in-law of Richard Quinn, an influential political consultant who was a central figure in the Statehouse’s corruption investigation. Quinn’s company worked on Wilson’s attorney general campaigns.
Wilson’s office says Mustian will not be paid directly for the deal because he no longer works for Willoughby.
“There is absolutely no patronage involved in this case,” said Kittle.
Mustian is married to Quinn’s daughter, Rebecca, who was finance director and accountant for her father’s consulting firm. She continued to work for Wilson’s campaign after the attorney general severed relations with her father, who was indicted in the investigation.
Senator Dick Harpootlian, a Democrat from Columbia, said he wanted to know more about the terms of the lawyers’ fee schedule and the adequacy of the deal as a whole.
“I think this is something that needs to be examined by the Senate,” he said.
Senator Tom Davis, Republican of Beaufort, said it is difficult to say whether the rates are fair without knowing how long the companies have invested in the work, the experience they brought to the case and the novelty of the strategy they devised. The case has legal and political components, pitting the state against the federal government – “a superior enemy with unlimited resources,” he said.
“Do these lawyers have a history of going against the federal government and forcing them to make a deal?” he asked. “Do they have that weight and credibility?”