Council chair on Penny Tax allegations: 'Clarification' needed f - wistv.com - Columbia, South Carolina

Council chair on Penny Tax allegations: 'Clarification' needed from DOR

COLUMBIA, SC (WIS) -

A review of the Richland County penny transportation tax by the South Carolina Department of Revenue finds "multiple instances of illegal activity by individuals and/or companies associated with the Penny Program."

The Department of Revenue notified County Administrator Anthony McDonald of its findings in a letter dated December 3. County officials released the letter Monday. 

According to the letter, the Revenue Department started its review of the Richland County Penny Transportation Program in April. It looked at financial numbers from May 2013-October 2015. 

The review brought up three areas of concern: the procurement of the Project Development team, which, according to the letter, "raises questions of potential public corruption and fraud;" several instances of illegal activity by people and companies associated with the program; and certain expenditures that fall outside state and county law.

In reference to the first concern of public corruption and fraud, the DOR says it has contacted law enforcement.

Regarding the expenditures that "fall outside the parameters of both the transportation tax statutes and Richland County ordinance," the letter addresses the Small Local Business Enterprise Program and money spent on public information services. The letter states an estimated $619,457 in revenues from the Penny tax was used "as the exclusive funding source for the SLBE personnel and program start-up costs..."

"In effect, the Penny Tax program is paying $50,000 per month, $600,000 per year and $3 Million (sic) over five years for the equivalent of fewer than two full-time employees -- when an entire public information office already exists within the Richland County government and other PDT members also provide public relations services," the letter says. 

The letter concludes:

"As outlined above, Council has misappropriated a significant amount of Penny revenue and is scheduled to spend millions of additional dollars over the next several years for expenditures falling outside the parameters of the transportation tax laws.  The county should take action to correct these expenses both prospectively and by reimbursement for previously paid amounts."

"We are shocked and alarmed that DOR has found potential evidence of public corruption and fraud along with other illegal activities," said a response letter from McDonald to the DOR. He went on to address the procurement issue, saying "...the procurement and resulting contract complies with both the South Carolina Consolidated Procurement Code...and the Richland County Ordinance..."

Regarding allegations of illegal activity, McDonald went on to say, "The County stands ready and willing to provide any additional or assistance to TOR that it can."

McDonald addressed the SLBE program by saying, "The County's long-term plan is for the SLBE Program to support other undertakings in addition to Penny Tax projects, but, to-date (sic), the Program has been used for Penny Tax projects with de minimis non-transportation expenses potentially embraced in the start-up costs of the program."

You can read both letters attached to this story. 

Richland County voters narrowly approved the penny tax in 2012 to fund various transportation-related projects countywide

Click here to see Richland County's annual financial reports.

In a news conference Tuesday morning, Richland County Council Chairman Torrey Rush did not give specifics about the report, saying several times the county has asked DOR "for clarification." 

"We can only go by the information that was sent to us…We don’t know the specifics of that information."

"We will continue to assess those issues as we move forward," Rush said. "Council has given the administration the ability to move forward to getting a forensic auditor to review the Penny Sales Tax."

Rush said it would be in the county's best interest to hire an independent auditor for the job. In reference to the two public relations firms mentioned in the report, Rush could not give their names, but he said they were necessary.

"I think it was an important component to the project," he said. 

Rush also said the county had attorneys help craft the ordinance questioned by the DOR.

"We’ve consulted with legal. We’ve had legal counsel in relation to our ordinances...We feel we’ve been taking the proper steps that we’re in compliance with the law in regard to the procurement process…we’re trying to get clarification."

"The Penny Program is still moving," he said. "There’s still projects that are in process. Once we get clarification and get a better understanding of DOR’s perspective, then we can take the steps to address any issues."

Rush assured the residents of Richland County their tax money is being spent responsibly.

"I think the county has taken the steps necessary to ensure public confidence…I think we’ve tried to put all the processes in place to make sure we take care of the public dollars."

Copyright 2015 WIS. All rights reserved. 

  • Trending StoriesTrending StoriesMore>>

  • After Craigslist scam, man can't enter his own home

    After Craigslist scam, man can't enter his own home

    Saturday, July 22 2017 8:29 PM EDT2017-07-23 00:29:14 GMT
    Saturday, July 22 2017 8:29 PM EDT2017-07-23 00:29:14 GMT

    The people inside rented the home from a mystery person on Craiglist. As the law stands, because they refuse to leave, Keith Mills now has to go to court to prove he’s the rightful owner.

    More >>

    The people inside rented the home from a mystery person on Craiglist while owner Keith Mills was on vacation.. As the law stands, because the renters refuse to leave, Mills now has to go to court to prove he’s the rightful owner.

    More >>
  • Police: Parents gave newborn drugs to cover up addiction

    Police: Parents gave newborn drugs to cover up addiction

    Sunday, July 23 2017 1:52 AM EDT2017-07-23 05:52:55 GMT
    Sunday, July 23 2017 1:52 AM EDT2017-07-23 05:52:55 GMT
    Colby Wilde, 29, and Lacey Christenson, 26, face four counts each of child endangerment and felony drug charges. (Source: Utah County Sherriff’s Office/KUTV/CNN)Colby Wilde, 29, and Lacey Christenson, 26, face four counts each of child endangerment and felony drug charges. (Source: Utah County Sherriff’s Office/KUTV/CNN)

    The baby’s mother used heroin and prescription pain medication during her pregnancy, and the baby was born addicted to drugs, police say.

    More >>

    The baby’s mother used heroin and prescription pain medication during her pregnancy, and the baby was born addicted to drugs, police say.

    More >>
  • Restaurant's policy limits those with kids to one drink

    Restaurant's policy limits those with kids to one drink

    Sunday, July 23 2017 2:50 PM EDT2017-07-23 18:50:46 GMT
    Sunday, July 23 2017 2:50 PM EDT2017-07-23 18:50:46 GMT

    A long-standing rule at Peddlers Bar & Bistro limits anyone dining with children to one alcoholic beverage, in order to hopefully limit the danger children face from drunk drivers.

    More >>

    A long-standing rule at Peddlers Bar & Bistro limits anyone dining with children to one alcoholic beverage, in order to hopefully limit the danger children face from drunk drivers.

    More >>
Powered by Frankly