by Don Moniak

On August 11, 2022, Clark W. McCants II from the law firm of Nance & McCants submitted the “Answer of Defendant Gary Smith” to the July 5, 2022 lawsuit Blake et al vs. City of Aiken et al. (1) Gary Smith is the City Attorney for Aiken now alleged in three lawsuits to have violated South Carolina state ethics laws by failing to recuse himself from a probable conflict of interest involving city business.  The Smith defense is marked by an assertion of an “innocent” mistake;  inconsistencies regarding past legal advice to City boards and commissions; and raises the new issue of lack of legal oversight. 

Three separate lawsuits filed since May 10, 2022, allege that Aiken City Attorney Gary Smith violated conflict-of-interest rules defined by South Carolina’s ethics laws by failing to recuse himself from proceedings involving the City of Aiken’s Project Pascalis. The primary basis for the contentions are that Mr. Smith’s law partner Ray Massey is an investor in, and represents, the project’s developer RPM Development Partners, LLC. Massey is also an investor in, and represents, Aiken Alley Holdings, LLC that is also heavily involved in the project. 

All three lawsuits focus heavily on the March 28, 2022 Aiken City Council meeting, when the first public hearing on the Newberry Street privatization ordinance was held. At issue in the litigation is Smith’s presence at this hearing as the City’s Attorney. The first two lawsuits were filed by Aiken area residents Drew Johnson (May 10, 2022) and Kelly Cornelius (May 21, 2022), both of whom are acting in a “pro-se” capacity without an attorney. 

In the response to the pro-se Johnson and Cornelius lawsuits, the firm of Nance & McCants only argued for dismissal on the basis of jurisdictional grounds, and did not offer any other defense such as denying the allegations. In response to Blake et al vs. City of Aiken lawsuit filed by three prominent South Carolina lawyers representing nine plaintiffs, Nance & McCants offered a more vigorous defense to the same basic contentions that includes both denials and one interesting admission. 

The Assertion of an Innocent Mistake

In regard to ethical conflict of interest allegations, Blake et al states: 

“Gary Smith, the City Attorney, participated in numerous meetings dealing with, and gave advice and numerous opinions regarding, matters related to Project Pascalis and matters related thereto after his law partner, Ray Massey, became and was an interested party in or before March 2021 by acquiring interests in Pascalis Project property and by representing WTC and RPM, and even though Mary Guynn, his law partner, owns a building on the Pascalis block and may represent other owners, investors and/or tenants in the Pascalis block.” (Paragraph 187) 

This specific allegation was denied by in the McCants defense of Gary Smith: 

“This Defendant denies the allegations set forth in Paragraph 187 and its subparagraphs, insofar as they may pertain to him.” (Paragraph 78). 

However, Smith’s attorneys had already answered the question differently, admitting that Smith was at one of the meetings and that if he did offer advice, it was an innocent mistake. Even though Smith was not mentioned in Paragraph 165 of Blake et al, July the defense responded: 

“With respect to the allegations set forth in Paragraph 165 of the Complaint this Defendant admits that he was present at the meeting of City Council held on March 28, 2022, but denies that he provided any specific legal advice to City Council regarding the Project given the fact that he believes that Mr. (Ray) Massey did possess an economic interest in the Project; this Defendant further states that if he did provide any such advice, such advice was offered innocently and by mistake, and without any intent on his part to create and / or violate any conflict of interest he may have had in his role as serving as the attorney for the City of Aiken. This Defendant further admits that members of the public spoke at the meeting of City Council on March 28, 2022 and voiced their concerns and objections regarding the Project which, upon information and belief, are set forth in the minutes of that meeting.” (Paragraph 74) 

This contention is one of seven in the Smith defense containing citations of “meeting minutes” as future evidence. While the minutes are a good reference, the City of Aiken’s meeting minutes are not verbatim transcripts of official meetings. The City does, however, record City Council meetings, which provide audio/video evidence of proceedings as well as the opportunity for a verbatim transcript. There are no references to “videos” or “video transcripts” in the Smith defense. 

Anybody can observe the You Tube recording of the March 28 meeting (2) where Gary Smith acted in his customary role as City Council’s Parliamentarian and provided legal counsel, as his job responsibilities require. If the lawsuit proceeds to a discovery and trial phase, it will be transcripts, and not minutes, that will provide definitive, reviewable evidence to determine how innocent a mistake it was to openly advance the ordinance after it was questioned by City Council member Ed Woltz. 

More Inconsistencies

The Smith defense contains more inconsistencies, particularly in regard to his representation, or lack thereof, of the Aiken Municipal Development Commission (AMDC).

First, the Smith defense claims that he was uninvolved with the AMDC after June 20, 2020: 

“With respect to the allegations set forth in Paragraph 108 of the Complaint this Defendant did not provide legal counseling to the AMDC after June 2020“ (Paragraph 57) 

But while the defense references “meeting minutes” seven times, they failed to heed the meeting minutes from the AMDC’s August 20, 2020 public meeting which reported that the City Attorney was consulted by then AMDC Chairman Tim Dangerfield: 

“Mr. Dangerfield pointed out that he had talked to the City Attorney about the concern at the last meeting regarding voting. He pointed out there are nine members; one member was absent at the last meeting; one member recused himself, and three members abstained from voting. He noted that Gary Smith, City Attorney. had stated that four members was the number needed to vote on a matter at the last meeting. Because three members abstained, they counted as being present.” (3) 

Second, the Smith defense claims he was uninvolved with any part of Project Pascalis after learning that his partner, Ray Massey, had an economic interest in the Project. The defense never defines when that knowledge was obtained, nor when Smith actually recused himself, a trend typified in Paragraph 55: 

“This Defendant denies, however, that he served as counsel for AMDC, or he counseled the City of Aiken beyond a point in time when he became aware that Mr. (Ray) Massey possessed an economic interest in any business entities involved in the Project.”

As reported in “The Pascalis Attorneys,” (4) at least two partners in the law firm of Smith, Massey, Brodie, Guynn, and Mayes were directly involved in property acquisition efforts on behalf of WTC Investments, LLC (5). Ray Massey also held recently obtained property within the project area, and stayed involved with recruiting a new developer after Weldon Wyatt’s development firm GAC, LLC withdrew from the project in May, 2021. During this recruitment process concerns were raised about Gary Smith being present at meetings with developers. 

The Inconsistency of City Attorney Oversight and Responsibility

Equally concerning to the inconsistencies in the defense regarding conflict of interest allegations are references to a lack of legal oversight by the City Attorney. In Paragraph 35, the defense sets this tone by stating: 

“this Defendant denies that he has repeatedly advised the City of Aiken, the AMDC and the DRB with respect to the redevelopment projects and matters that the Plaintiffs allege are the subject of this civil action.”

The defense also states nine times the: 

“Defendant’s belief the AMDC did not violate such applicable law in carrying out its duties and responsibilities.” 

These contradictory statements raise two key questions and associated issues: 

1. If Gary Smith was not advising the City during the redevelopment efforts, (see Transparency index, below) who was? The Design Review Board did not hire Attorney Jim Holley until April 28, 2022; and the AMDC did not have a written agreement with Attorney Gary Pope, Jr. until October 10, 2021. City Attorney Gary Smith was the only person in a position to review city business and render legal counsel during a period of time when the AMDC conducted nearly two-thirds of its meetings in closed-door executive session (6), negotiated $9.5 million worth of property purchases without conducting a single appraisal, and pursued a replacement developer after the first one exited the project. 
2. If Gary Smith was not advising the City during redevelopment efforts, how did he arrive at the belief that no applicable laws were violated by the AMDC or any other branch of city government? 

____________________

References: 

(1) The Answer of Defendant Gary Smith may be read at: https://publicindex.sccourts.org/Aiken/PublicIndex/PIImageDisplay.aspx?ctagency=02002&doctype=D&docid=1660244567099-308&HKey=8384536975737184101707480801116511710174796512212110586111120718067105115721027067804810771120818581

Following is information pertaining to the three lawsuits, from Footnote 1 of “The Pascalis Attorneys,” https://aikenchronicles.com/2022/08/13/the-pascalis-attorneys/

Aiken City Attorney Gary Smith has been named in three lawsuits this year alleging violations of South Carolina State Ethics Laws  in relation to his partnership with Project Pascalis investor and developer Ray Massey, who is also the listed agent for RPM Development Partners, LLC. 

a. On May 9, 2021 Kelly Cornelius filed a civil appeal complaint against Aiken City Council in the Court of Common Pleas alleging conflict of interest involving City Attorney Gary Smith for failing to recuse himself during the March 28, 2021 Aiken City Council hearing regarding the partial privatization of Newberry Street as an integral part of Project Pascalis. https://publicindex.sccourts.org/Aiken/PublicIndex/PIImageDisplay.aspx?ctagency=02002&doctype=C&docid=355397&HKey=571108168697967115105821168212047785082505287679788897473511088249111659775105112528648556910581

In response, City of Aiken attorneys from the law firm of Nance and McCant’s filed a motion to dismiss, claiming the suit was filed in the wrong jurisdiction. No denials of conflict of interest allegations were made. https://publicindex.sccourts.org/Aiken/PublicIndex/PIImageDisplay.aspx?ctagency=02002&doctype=D&docid=1654010154581-647&HKey=8710510389103655512210111680117106977371767356121119527311711584667012112148691047310187867649678011565

b. On May 10, 2022, John “Drew” Johnson filed a civil appeal complaint against Aiken City Council, Mayor Rick Osbon, City Attorney Gary Smith, and City Manager Stuart Bedenbaugh, in the Court of Common Pleas. Johnson also alleged a conflict of interest involving City Attorney Gary Smith for failing to recuse himself during the March 28, 2021 Aiken City Council hearing regarding the partial privatization of Newberry Street as an integral part of Project Pascalis. 

The same response from the same legal firm was made in Cornelius vs Aiken City Council. Again, City of Aiken attorneys did not dispute the allegation, and sought to have the case dismissed on jurisdictional grounds. https://publicindex.sccourts.org/Aiken/PublicIndex/PIImageDisplay.aspx?ctagency=02002&doctype=D&docid=1654010197155-602&HKey=109102721011208011566114991224366110521191141187886505011767836648741021075285987051515281851086984115

c. On July 5, 2022. David W. Blake, Luis E. Rinaldini, Dudley Richard Dewar, Jenne Stoker, Beatrice B. McGhee, Gail King, Historic Aiken Foundation, Inc., Green Boundary Foundation, and the South Carolina Public Interest Foundation, filed a lawsuit in the Court of Common Pleas, Second Judicial Circuit of South Carolina, against the City of Aiken. The lawsuit named twenty-eight defendants ranging from Aiken Mayor Rick Osbon to RPM Developers,LLC. One of the defendants was Gary Smith. https://publicindex.sccourts.org/Aiken/PublicIndex/PIImageDisplay.aspx?ctagency=02002&doctype=D&docid=1657032061451-750&HKey=1225510198105101819811411111368116736686988811779851011126650118568710782105981141011085499115100111699969

(2) The You Tube video for the meeting is at: https://archive.org/details/coasc-City_Council_Meeting_March_28_2022

(3) AMDC Agenda for September. , 2020 containing Meeting Minutes for August 20, 2020 AMDC meeting. 

Click to access 2020-09-15-Municipal-Development-Commission-Agenda.pdf

(4) “The Pascalis Attorneys.” https://aikenchronicles.com/2022/08/13/the-pascalis-attorneys/

(5) Just as the “RPM” in RPM Development Partners stand for Raines, Purser, and Massey, the “WTC” in WTC Investments is believed to stand for Weldon, Tom, and Chip. 

Weldon Wyatt is a well-known local investor and developer; his son Tom Wyatt is often cited as the “manager” of this and other WTC firms, and Thomas “Chip” Goforth represents more than a dozen other related WTC entities and was the primary contact for WTC Investments, LLC during the first phase of Project Pascalis. Ray Massey was the registered agent for WTC Investments, LLC when the firm assigned its purchase and sale agreements for Project Pascalis properties to the Aiken Chamber of Commerce. 

Likewise, the “CTR” in CTR, LLC is believed to stand for Craig (Heath), Todd (Gaul), and Ray (Massey).  The K in CTRK, LLC, which is the firm that developed the upscale 419 Hayne Avenue AirBandB,  is believed to stand for Kevin (Kisner). https://www.postandcourier.com/aikenstandard/news/419hayne-the-site-of-new-luxury-suites-in-downtown-aiken/article_8c32b558-024f-5390-94dd-8a3af245a201.html

(6) Project Pascalis Transparency Index. 

Project Pascalis Transparency Index