Arrigo speaks

Horry County attorney Arrigo Carotti speaks with Horry County Council members Tuesday night.

Horry County Government paid outside law firms nearly $1.5 million to represent the county in 136 cases over the last three years, according to a report released by the county on Thursday.

That amount is not unusual given the size of the county and the complexity of some of the cases, county officials said. They also pointed out that the county attorney’s budget — which includes funding for hiring private sector lawyers — hasn’t seen dramatic increases. Records show the proposed attorney’s office budget for the next fiscal year is nearly identical to what it was in 2009.

Yet in recent weeks the amount of lawyer spending has become the subject of an internal council debate, one that spilled over into the public sphere this week when council members suddenly voted to adjourn a meeting just before councilman Al Allen was scheduled to discuss the topic.

Allen, who received the attorney spending report Thursday, maintains that some council members shielded him from public information that should have been made available sooner. Other councilmen have questioned how Allen, who has publicly criticized the county attorney, would present the report’s details and why he requested the research at all. Most council members did not object to releasing the two-page document, which county staff provided to myhorrynews.com a day after the news outlet submitted a public records request.

“There’s nothing salacious here,” councilman Dennis DiSabato said.

The report lists the law firms hired by the county since Jan. 1, 2018, how much each office has been paid since that date and the types of cases each worked. The largest amount — $605,406.48 — was paid to Burr & Forman, one of the firms that represented the county in the hospitality fee lawsuit filed by the city of Myrtle Beach. In that case, the city sued to stop the county from collecting a 1.5% levy on hotel rooms, restaurant meals and admission tickets sold in the city limits. The lawsuit was settled last month, clearing the way for the county and the city to keep the revenues collected in their respective jurisdictions.

Of the 23 law firms listed in the report, just five have been paid more than $50,000 since 2018:

• Harrison White received $133,699.99 for representing the county in a lawsuit against Myrtle Beach over the city’s plans to continue redeveloping the former Myrtle Beach Air Force Base. Along with the school district, the county filed a lawsuit in 2018 accusing Myrtle Beach officials of misusing tax dollars and removing a new school from their redevelopment plan. That case is still pending.

• Kelaher, Connell and Connor, another firm that represented the county in the hospitality fee case, was paid $117,243.71.

• Womble Bond Dickinson has received $99,519.46 for representing the county in its legal action against Myrtle Beach over one of the city’s land deals. The city has proposed selling nearly 145 acres that have historically generated millions for Myrtle Beach International Airport, which the county runs. The county filed a lawsuit in December requesting that the court stop the sale. A circuit judge ruled against the county in January and the county dropped its case last month. However, the county has asked the Federal Aviation Administration (FAA) to investigate the property sale.

• Along with its work on the hospitality fee case, Burr and Forman also handled three county cases involving employment or employee pay. For that work, the firm was paid $74,132.72.

• The Battle Law Firm has been paid for $130,156.52 for representing the county in 27 nuisance actions. In those cases, the 15th Circuit Solicitor’s Office (not the county attorney) hires a lawyer to serve as a special prosecutor. That prosecutor then files a petition asking the court to shut down businesses that are considered nuisances. These special prosecutors often use crime data and police reports to make their cases. In recent years, the solicitor’s office has used this approach to close massage parlors, which authorities claimed had become fronts for prostitution. The Battle firm also received an additional $36,809.08 for assisting the county in a lawsuit brought by a skydiving business that had been evicted from Grand Strand Airport for what the county said were numerous safety violations.

County attorney responds

When asked about the county’s process for selecting outside lawyers, Horry County attorney Arrigo Carotti said that responsibility falls to him under the county’s procurement code.

“They’re different from every other service that’s provided,” he said. “You’re not procuring landscaping services.”

If the county is sued in state court, the county has about 30 days to file a response. In federal court, the timeframe is generally 21 days. Carotti said that’s simply not enough time to go through a formal bidding process and meet those deadlines.

Apart from that, there are few local firms that provide certain specialized services he occasionally seeks.

For example, when county officials overhauled regulations for adult entertainment in 2013, they set specific requirements for those businesses' hours, employee licenses and even stripping.

In that situation, they hired Tennessee lawyer Scott Bergthold, a nationally-known attorney who specializes in helping local governments craft policies for sexually-oriented businesses.

The county paid Bergthold’s firm more than $200,000 for work during the early years of the enactment and enforcement of those policies. However, as the number of adult businesses in the county declined, so did the need for his services. Since 2018, Bergthold has been paid $1,800 for work on two cases, according to the report the county released Thursday.

Carotti said the other firms listed in the report were also hired for specific purposes. He said the county needed a lawyer with FAA expertise to handle the dispute with the city over the airport property. And he asked Boulier, Thompson & Barnes to represent the county in the litigation filed over the deaths of two women who drowned in a sheriff’s transport van during Hurricane Florence in 2018.

Although the county’s insurance provider retained an attorney to manage this case, that litigation could potentially involve millions of dollars, amounts that far exceed what’s covered under the county’s tort liability coverage. That means any payout beyond those caps could hit the county’s general fund, which pays for basic county services.

“It was prudent for me to hire separate counsel,” Carotti said, “to protect the general fund.”

The county doesn’t hire an outside attorney every time it’s sued. Carotti said his office, which includes two other lawyers, monitors about 100 cases at any given time. Of those, about 60% are managed by the S.C. Insurance Reserve Fund (IRF), which provides liability coverage to state and local governments.

The IRF selects its own attorneys for the cases it manages. Of the lawyers Carotti does hire, he said he looks for seasoned, analytical litigators, particularly those who have a track record of producing favorable results for the county. Again, he said, the pool is often limited. Finding the right fit for a specific case can be difficult and certain lawyers, particularly those with unique specializations, are often in demand.

“A lot of the attorneys that I hire to represent us are not looking for work,” he said. 

He said he has no problem explaining his choices.

“I can justify every hire,” he said, adding that he has never contracted with firms because they are “buddies of mine.”

“Not going to happen,” he said. “There is objective, legitimate criteria that I use in every hire.”

Carotti also noted that the county pays for additional insurance coverage that provides reimbursement for certain cases. For example, of the $1.5 million in outside legal bills outlined in the report, he said the county has received about $300,000 in reimbursement money for the cases that qualified.

DiSabato, who is also an attorney, said he can’t see anything inappropriate in the attorney spending report.

“It’s fair to be critical of the outcomes of some of the litigation recently,” he said, though he noted that an attorney is not solely responsible for a result in court.

DiSabato stressed that in some cases the outcome doesn’t stem from bad legal advice; the judge simply holds a different view.

“That’s always the case with legal matters,” he said.

At the request of some council members, Carotti said he does plan to prepare guidelines for selecting attorneys that the county can use now and after he is no longer in this position.

“That’s a wonderful outcome,” he said. “If anything positive has come out of this, that is it.”

The sparring

The dispute over lawyer spending has been simmering since Allen requested the information last month. County staff spent several days compiling the data, but some council members were hesitant to release the information. They feared Allen would misrepresent the report, use it to ridicule Carotti and put political pressure on the council to terminate Horry County Administrator Steve Gosnell, who supervises Carotti.

Allen said that’s not accurate.

“It was not anything personal,” he said. “I don’t care if he (Carotti) don’t ever speak to me again. It don’t matter. But my God, you’re being paid good money. Be professional.”

Allen said he had never thought about the county’s outside legal spending until two local attorneys asked him how to get that type of work from the county. That led him to wonder how attorneys were selected to provide those services.

“Basic curiosity,” he said is what drove his interest. “I wanted to see how much funding had been paid out and what the guidelines were for hiring outside attorneys. Because as long as I’ve been on council, I’ve never seen an RFQ (request for qualifications). I’ve never seen an RFP (request for proposals) out. But there are several counties and several states and several federal agencies that go through that procurement process for hiring outside legal help and qualifying them.”

Over the last two weeks, Allen said councilman Johnny Vaught offered to review the information with him in an executive session with other council members. He didn’t want to do that.

“It’s public funding,” Allen said he told Vaught. “You can’t do that.”

Under state law, governments are not required to create documents in response to a request for information. However, a report such as the one prepared by county staff would be public, said Jay Bender, a Columbia attorney and expert on the state’s open records law.

By not releasing that report, Bender said in an email, the county would show that its “legal strategy is to spend public funds without having to account to the public for the expenditures.”

Before the report was created, Vaught said he learned of Allen’s request for the lawyer information from Carotti. Vaught said the county attorney brought it to his attention because Carotti’s budget falls under the management of the administration committee he chairs.

Vaught said he instructed Carotti to prepare a report that answered Allen’s questions.

Vaught said he initially recommended that he and Allen review the information with Carotti. When that didn’t work, Vaught said he asked Carotti to brief the committee and Allen in a closed-door session.

Vaught said his concern was that legal strategies for specific cases could be discussed and he didn’t want that sensitive information becoming public. However, most council members and Carotti agreed the report should be released in response to a FOIA request.

But Allen said he's frustrated that county staff would not provide him with the information he wanted quickly. At one point, the councilman said he called Gosnell to blast him for Carotti’s response to his request. Gosnell declined to comment for this story.

“I have asked for a legitimate, simple request and have been completely ignored by our county attorney,” Allen said of his message to Gosnell. “Now if he don’t want to talk to me, that’s fine. Ain’t no hard feelings and stuff. It is well known and stuff that there’s no love lost between us. But he has a professional duty to respond to me be it through you (Gosnell) or through the chairman of council and not try to filter something through somebody else on council.”

Allen and Carotti have a history of disagreement.

Two years ago, Allen asked the council to hire an outside attorney to represent the panel instead of employing the same attorney to represent both the council and county staff. His move came after council members learned that Carotti had emailed state police telling them their investigation of extortion allegations involving council chairman Johnny Gardner should not result in a finding of “unfounded,” but they should continue probing the relationships between Gardner and some of his business associates.

Gardner was eventually cleared of any criminal wrongdoing, and the news of Carotti’s email prompted some council members to accuse the county attorney of interfering with a state investigation.

However, most council members ultimately supported Carotti.

A tense meeting

There were echoes of those days on Tuesday when most councilmen abruptly shut down a council meeting ahead of a discussion about attorney fees, which Allen had asked to be placed on the agenda.

Since the bizarre incident, council members have pointed fingers about the circumstances that led to the sudden adjournment.

Vaught said Allen was offered a chance to review the lawyer spending report multiple times but declined. Allen said he had planned to meet with Carotti, Gosnell and Gardner on Tuesday before the council meeting but was upset when he learned three other council members had been invited by Vaught to the same private meeting.

“I’m not playing this game,” Allen recalled telling those councilmen just before he walked out of the meeting. “I’ll ask my questions tonight in the council meeting.”

Vaught said he did ask the others to go to the private meeting because they were the only ones who had not been briefed by Carotti on the contents of the report. Most of the other councilmen received that information in executive session at Vaught’s administration committee.

“Why shouldn’t they get the same information he gets,” Vaught said. “That’s why I told them to go.”

Just before Tuesday’s council meeting began, Allen said he discussed the issue with some other councilmen and had planned to defer the subject when it came up rather than make a public spectacle. He said he had been assured he would get what he had asked for.

Then the meeting suddenly stopped.

Allen said he feels he was stonewalled over a reasonable request, for too long receiving “no text, no phone call, no email, no 'up yours,' no rock chucked at me or nothing from Arrigo Carotti.”

“Just a plain, legitimate budget type of question,” he said. “That has never been presented to us in any budget hearing. … All of this could have been avoided."

Carotti declined to comment on Allen's statements about him.

A council divided

The one common narrative emerging from conversations with multiple council members and public records is that there is a bitter rift between various factions on council and a sense that some leaders are attempting to make power moves while others are acting in bad faith against the wishes of the majority of council.

Since Tuesday’s meeting, the sparring has continued over email, according to records obtained by myhorrynews.com. On Wednesday, Gardner fired off a missive to DiSabato.

“I am not sure what your end game was in adjourning the council meeting before a discussion of county legal fees could be entertained,” the chairman wrote. “The proposed discussion topic is not privileged information. Instead it is subject to the Freedom of Information Act and of public interest on how public tax money is spent. As chairman, I have tried to allow open discussion to assure the greatest amount of transparency to the public on issues debated. Any council member should have the opportunity to discuss during meetings any issue he considers of importance to himself, council or the public at large.

“If you recall, I did not stop you two years ago from insisting there was ‘pay to play’ on my part even though SLED had concluded and reported to the Solicitor nothing of the type had occurred.

“You are not the judge of what may or may not be discussed during a council meeting. Let me assure you a discussion of county legal fees will be included on the agenda for our next meeting. You may try some antics to again hinder that discussion but I do not believe you will get a majority of council to back you next time.” 

DiSabato responded on Friday.

“You have, since taking office, used opportunities such as this to exert political pressure on council to take actions that would further your own agenda,” he wrote. “I, along with other members of this council, saw this as another such opportunity, resulting in the eight to four vote in favor of adjourning our meeting on Tuesday.  If this was not the intent on your part, perhaps more open communication between you, as the ‘leader’ of this council, and your colleagues would have been in order.  The fact is, you have lost all control of this council and have failed to effectively lead this governing body since you were elected.

“While I applaud your desire to allow council members to discuss matters of importance, you should keep in mind that you must also obtain the will of the majority of its members to take such action.”

DiSabato then went a step further, referencing a contract Allen’s chemical spraying company has had with the county.

“I would like to discuss the use of public funds and awarding contracts to organizations owned by council members and/or their immediate family,” DiSabato wrote. “I believe it is important for the public to understand exactly how much of our tax revenue is being spent with Allen Aviation, in particular, for mosquito spraying contracts, as well as how those contracts are awarded. I also believe it is important for the public to understand that these contracts are doled out by the Public Works Department, which reports to the Infrastructure and Regulation Committee, chaired by Mr. Allen. Furthermore, I’d like to take this opportunity to let you know that I have instructed staff to prepare an ordinance to prevent the county from further contracts with companies owned by council members and/or their immediate family. The intent here, Mr. Chairman, is to protect and prevent individuals on council from undue public scrutiny of perceived improprieties stemming from such activities.”

This is not the first time some council members have discussed such a policy, though those conversations have remained off the dais. It’s also not the first time questions have been raised about Allen’s business.  

In 2014, state ethics officials dismissed a complaint involving Allen after they couldn’t find probable cause to pursue charges against him.

Allen had been accused of using his position as an elected official to gain a county contract for his family’s spraying business. Allen had also faced allegations that he voted for a major change in the county’s waste management policy as a favor for a business associate.

However, ethics commissioners could not substantiate those claims and the complaint was officially dismissed.

Allen acknowledged the scrutiny he’s faced in an email response to DiSabato. He called DiSabato’s comments “ignorant and uninformed.”

“If you would have done your research before blatantly casting stones at me and my private business, you would know that Allen Aviation was established back in 2001 after I had left the employment of Horry County Sheriff’s office,” Allen wrote, adding that he successfully bid on an aerial mosquito spraying contract but later lost it to a competitor before winning it again in 2006.

“I was NOT on Council then and only decided to run for Council in 2006, eventually coming onboard in 2007,” he wrote. “Since that time, Allen Aviation has re-bid this contract several times in a sealed bid and properly handled/legal format. … This contract, the bidding process, and Allen Aviation itself has been looked into in the past by several media outlets and the SC Ethics Commission. Please rest assured that we are known by name with the SC Ethics Commission due to our own inquiries as to this situation.”

Late Friday afternoon, Gardner issued a news release addressing the situation. The chairman wrote that all public information requests should be handled in accordance with state law.

“Any legitimate request for information by a county council member to county staff should be immediately processed without conspiracy theories developed about why the information is requested or roadblocks being put in the path of the release of the information,” he said. “I have no idea why Councilman Vaught got into the middle of this, diverted the information to an executive session of the admin committee and told fellow council members and the media the information was subject to attorney client privilege. It is not. I have no idea why Mr. Carotti, Mr. Vaught and Mr. Disabato felt this information should be withheld from Mr. Allen and should not be public. That is a question you need to ask them.”

The next regular council meeting is scheduled for May 18.

Contact Charles D. Perry at 843-488-7236

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I'm the editor of myhorrynews.com and the Carolina Forest Chronicle, a weekly newspaper in Horry County, South Carolina. I cover county government, the justice system and agriculture. Know of a story that needs to be covered? Call me at 843-488-7236.

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