Reynolds Williams and… that timber company

Reynolds Williams, The Timber Company And Our $25 Billion Pension Fund [Updated]

A Statement from AG Wilson’s Office: Based upon the nature of the allegations in the Treasurer’s letter, we are today forwarding the material we have on file to both SLED and the State Ethics Commission.  (The Treasurer’s letter alleges activity that would fall under each authority, criminal and ethical.)  When both entities have completed their reviews, we will then determine what, if any, prosecutorial action is warranted. 4:11pm Via Mark Plowden

By Paul Gable

S.C. Treasurer Curtis Loftis has requested S.C. Attorney General Alan Wilson to investigate the actions of S.C. Retirement System Investment Commission chairman Reynolds Williams with respect to a joint investment the commission made with American Timberlands, LLC.

Loftis said the investment seemed straightforward at the time, but information he became privy to after the commission vote brings to light possible conflict of interest problems for Williams and possible criminal violations.

The investment commission took up the matter of the investment during its November 2011 Wampee Reteat and business meeting. Commission members, less Williams who was not present for the vote, approved the investment.

According to information in the minutes of the meeting, Williams left the meeting early, before discussion and the vote on the investment. However, Williams said if he were present he would not participate in the discussion or vote because one of his law partners writes abstracts and title insurance for the companies and American Timberlands might use the same title insurance companies in the future.

However, it appears American Timberlands had already used the title insurance companies and other services of Williams law firm with respect to its investment in property that would become principal in the joint investment with the commission.

According to sources familiar with the investment, Williams called a commission staff member in December 2010 about American Timberlands and its partners. Throughout 2011, Williams’ law firm was involved in the acquisition of three pieces of property by American Timberlands, writing and revising contracts and ultimately closing the deals and forming corporations to hold the properties in December 2011.

For this work, Williams law firm received at least $88,000 in fees and commissions.

In trying to claim innocence of Loftis’ allegations, Williams said in a letter to The State newspaper that neither he nor anybody with whom he is associated has an ownership interest in the timber company. He further stated that he never asked anyone on the commission to vote for the investment.

Those statements appear to be absolutely true, but it is like comparing apples to oranges with respect to the fiduciary responsibilities of commission members and their relationships with companies who have business before the commission.

State law goes well beyond ownership interests and lobbying for votes in the case of the fiduciary responsibilities of commission members with respect to connections with businesses and associations with their interests being considered by the commission.

Specifically, S.C. Code of Laws Section 9-16-350(A), states, “It is unlawful for a member, employee, or agent of the commission or anyone acting on its behalf to use any information concerning commission activities to obtain any economic interest for himself, a member of his immediate family, an individual with whom he is associated, or a business with which he is associated.”

Additionally, Section 9-16-360(B) states, “A fiduciary or employee of a fiduciary shall take no action: (2) to invest retirement system funds in any share, or other security if the fiduciary or employee of the fiduciary, their family, or their business associates have an interest in, are underwriters of, or receive any fees from the investment; (3) have no interest in the profits or receive any benefit from a contract entered into by the fiduciary; (4) not use their positions to secure, solicit, or accept things of value, including gifts, travel, meals and lodging, and consulting fees for payment for outside employment, from parties doing or seeking to do business with or who are interested in matters before the fiduciary.”

In the interest of full disclosure, Williams and Loftis have a history.

Williams called, in Jan. 2012, for state lawmakers to remove Loftis from the commission when it was alleged that Loftis was involved in a pay for play scheme with state retirement system funds. An investigation into the allegations cleared Loftis of any wrongdoing. Actually, no pay for play scheme ever existed.

Williams called Loftis’ letter to the Attorney General “targeting him to settle an old political score.” On reflection, it might be more accurate to say that targeting Loftis was an attempted pre-emptive strike to remove him from the commission before he had the time to dig into the details of how commission members conducted business.

[Ed. Note: This is a rapidly developing story. Stay tuned!]