A letter to Aiken City Council regarding ongoing ethics issues

The following letter was sent today, April 12, 2023, by Don Moniak to Aiken City Council and City Manager Stuart Bedenbaugh.

“Dear (Aiken City) Council, 

After Council cancelled the Second Reading to dissolve the AMDC on Monday night, April 10th, I submitted prepared, written comments regarding that agenda item during the non-agenda portion of the meeting. I will be providing these comments and other relevant documentation to the State Ethics Commission, and the comments are provided for your reading pleasure below this email. (1)

Mr. (Gary) Smith’s request for an informal opinion from the Ethics Commission was the stated reason for deferring the Second Reading to dissolve the AMDC.  As of yesterday the Commission had yet to receive any request for an informal opinion from City Attorney Gary Smith regarding the conflict of interest issues involving City Council members, the Aiken Corporation, and the transfer of Aiken Municipal Development Commission (AMDC) properties and assets to the City of Aiken that will occur after the AMDC founding ordinance is repealed. 

A path forward that better complies with promises made by Council on January 17th for a fresh start is clear: void the Aiken Corporation contract and thus eliminate the conflict of interest issue. The Aiken Corporation can then compete with other interested parties for an economic interest in the Pascalis properties. 

A request for an informal opinion on ethics law means the spirit of this anti-corruption statute is, arguably, already under siege. The last informal opinion request to the State Ethics Commission by Mr. Smith was in February 2021.  For anyone who has not seen that opinion, it is at this link. 

In that request, Mr. Smith was very vague, referring only to the presence of a Council Member on the Board of a local bank that was building a new branch; and who was having work done on his home by the same builder.  There is a vague reference to the “The builder is purchasing a property in the City and it is anticipated that he will have to bring this property before City Council for approval of a zoning change and/or other matters.”

The Ethics Commission was unequivocal in its assessment that “the Council Member should recuse himself from any matter in which the builder has an economic interest.” 

Why Mr. Smith had to write in a hypothetical manner for a real issue would be up to him to explain. But since that was his approach, and the Ethics Commission was not provided any more concrete information, please correct me if I am wrong about stating the conflict of interest opinion involved Councilman Woltz. Here are the facts supporting that conclusion: 

1. The only bank (constructing) a new branch at that time was Carolina Coastal Bank, at its new 322 Richland Avenue West location. Councilman Woltz is on its Board of Directors, identified as owner of Precision Tune of Aiken. (SRP was also reconstructing a branch, but no Council members are on that Board). 

2. According to the city building permit, WTC of Aiken, LLC (Agent: Ray Massey) was the owner of the building, although it had sold the property to Coastal Carolina in April of 2020.  Tom Wyatt signed the deed at closing on behalf of WTC of Aiken,  and Mr. Smith’s partner Attorney Mary Guynn signed as closing attorney.  

As you all know, “WTC” stands for Weldon (Wyatt), Tom (Wyatt), and Chip (Thomas Goforth), and is routinely used by the Wyatt family for individual investment and development LLCs. There are more than forty different WTCs associated with the Wyatts that are registered in South Carolina.

For example, WTC Laurens, LLC (agent Thomas Goforth) purchased the former City of Aiken municipal office building on Laurens Street in 2020. Weldon Wyatt himself signed the deed when WTC Laurens (re)sold the parking lot portion of that property to R&O LLC (Agent Rick Osbon) in May 2021. This is all amply documented in The Cleaners: How Aiken City Council Got Taken to the Cleaners by the Wyatt Family. 

3. WTC Investments, LLC (Agent Ray Massey) was purchasing a property in the city at the time of Mr. Smith’s request for an ethics opinion: the “Anderson Property” (Newberry Hall) and “Shah Property,” (which actually consists of six properties) that are now officially owned by the AMDC. While WTC Investments never purchased those properties, it did assign the Purchase and Sale (PSA) agreements to the Aiken Chamber of Commerce, which in turn assigned the PSAs to the Aiken Municipal Development Commission.  

 WTC Investments business, in the form of the $10 million general obligation bond ordinance for “Parkway District” properties, did indirectly come before Council in August 2021. The bond money was used to pay for properties for which WTC Investments signed the original contracts.  Council decided to pay off that bond on Monday night, the final step in a deal initiated by Weldon Wyatt’s WTC Investments in cooperation with the City’s Economic Development department and the AMDC. 

So you can see the last request by Mr. Smith to the Ethics Commission for informal opinion has now opened up a new line of inquiry that keeps the dark grey skies over the Pascalis project, and the residual AMDC properties that Council is desperately trying to transfer to the City of Aiken. 

Will this latest request by Mr. Smith illuminate this latest ethical quandary through specificity and clarity, or be phrased in a hypothetical manner that functions to obfuscate the situation? 

Thank You, 

Donald Moniak
Contributor at: aikenchronicles.com

(1) Comments regarding AMDC properties and assets submitted in writing to City Council during the Monday, April 10th Council Meeting

1. The language in SC Ethics Law is quite clear: “No public official, public member, or public employee may knowingly use his official office, membership, or employment to obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.” And, “No public official, public member, or public employee may make, participate in making, or in any way attempt to use his office, membership, or employment to influence a governmental decision in which he, a family member, an individual with whom he is associated, or a business with which he is associated has an economic interest. A public official, public member, or public employee who, in the discharge of his official responsibilities, is required to take an action or make a decision which affects an economic interest of himself, a family member, an individual with whom he is associated, or a business with which he is associated shall recuse themselves.”

SC 8-13-700 states
The key word here is economic interest, which is defined as: 
“an interest distinct from that of the general public in a purchase, sale, lease, contract, option, or other transaction or arrangement involving property or services in which a public official, public member, or public employee may gain an economic benefit of fifty dollars or more.” Ethics Laws are anti-corruption laws, just like fire codes are fire prevention measures. 

2. Members of this Aiken City Council have recused themselves for reasons as varied as

a. Working in a building next door. 
b. Owning property on the same street.
c. Having a “friendly competitor”

d. Being the Council liason to a non profit group during disbursement of City funds to non profit groups. 
e. for belonging to the Kiwanis Club, although this appears to have been a joke. 
f. being related to somebody who had a conflict. 

That is a short list. 

City Attorney Gary Smith recused himself in October 2021  because a partner in his law firm was involved in the closing of a real estate deal on the property in question. This same recusal was made for the Rutland Avenue Aiken Village development in late 2022. 

Councilmembers Lessie Price and Gail Diggs properly recused themselves from the Aiken Corporation contract vote on March 13 because they are on the board of the Aiken Corporation. 

These are examples of good governance. 

3. On both February 8 and March 8 of this year, the Aiken Corporation Executive Committee voted to pursue an economic interest in AMDC property that was paid for with city funds, and which will soon become city property.  The contract between the Aiken Corporation and the City of Aiken creates a two-fold economic interest for the Aiken Corporation: 

a. Up to $250,000 as the Developer in the Pre-Development stage of the proposed SRNL project. 

b. As much as $500,000 to $600,000 a year in rental income from SRNL or other third parties on City property leased by the Aiken Corporation. 

There can be no doubt these are economic interests. 

Resignation from the Board of Directors of the Aiken Corporation does not erase the act of having voted for the contract, and having served on the Aiken Corporation until now. 

Resignation from the Board only confirms that a conflict of interest was present during the first reading. 

4. At the March 13th AMDC meeting, these conflicts of interest, which are real and not potential, caused this Council, as AMDC, to avoid voting on the resolution to transfer AMDC properties and assets to the City. City Attorney Smith offered the ordinance at issue today as an alternative and an end run around that vote. The purpose of this vote today is not just to dissolve the AMDC. The greater purpose is to transfer the properties.

5. City Attorney Smith is also in an ethical bind here, because his law firm was involved from the very beginning in obtaining properties that ultimately became AMDC properties: 

a. Members of the firm were paid an unknown sum, at least $6000, to negotiate and prepare PSAs on behalf of Weldon Wyatt’s WTC Investments. Wyatt’s development firm GAC was the first Pascalis developer. 

b. Attorney Ray Massey led an investment group that purchased properties in the Alley that were in the first Pascalis project, and property on Newbery Street that were a part of both projects.

c. SMBGM was the escrow agent for the WTC PSAs with the Shah and Andersons. 

d. Attorney Mary Guynn was paid through the city’s contract with Mr Smith to conduct the title search, and worked with Mr Smith on the property assignment to the Chamber of Commerce. 

e. Ray Massey and his “group,” as Tim O’Briant callled them, recruited developers for the second project, and Massey submitted a proposal on SMBGM Letterhead. 

f. Gary Smith prepared the city ordinance authorizing the bond, and signed the legal opinion validating the bond issuance. 

g. Ray Massey signed the PSA between RPM and the AMDC.

According to Tim O’Briant, this PSA is still exempt from FOIA disclosure because the city’s position is that until the deed is executed and the AMDC does not own the property, any release of information can provide a competitive advantage. 

So once again, the only ethical path forward is to render the Aiken Corporation contract null and void, put forth a redevelopment plan, hold a real public hearing on the Pascalis properties, and start anew. 

Thank You,

Donald Moniak