Since 2017, S.C. Attorney General Alan Wilson has hired at least six current or former lawyer-legislators to handle certain civil cases, including the chairman of a House committee that first approves the annual state budget, which funds Wilson’s office, records show.
The outside lawyers hired to assist the Attorney General’s Office (AGO) were to be paid on a contingency basis, which means they would receive a percentage of any settlement or court award. Records provided recently by the AGO under the S.C. Freedom of Information Act didn’t indicate whether the current or ex-lawmakers have received any fees.
The attorneys hired by Wilson, a Republican, included, according to “litigation retention” agreements:
- Rep. Murrell Smith, R-Sumter, who is chairman of the House Ways and Means Committee, and Rep. Bruce Bannister, R-Greenville, who also is a committee member. They were hired in 2019 in a civil case involving unnamed pharmacy benefit managers, who allegedly were “manipulating the prices, fees, and access to prescription drugs” in the state. The Ways and Means Committee approves the first legislative version of the annual state budget, which funds the AGO.
- Current Sen. Marlon Kimpson, D-Charleston, and I.S. Leevy Johnson, a Columbia Democrat who served in the House in the 1970s. They were hired in 2019 in a civil case against Cardinal Health Inc., McKesson Corp., and AmericsourceBergen Drug Corp. “arising from their distribution of opioids.”
- Kimpson; former state Sen. Paul Thurmond, a Charleston Republican who served from 2012 to 2016; and former state Rep. James Smith, a Columbia Democrat who served from 1996 to 2018, ran unsuccessfully for governor in 2018, and currently works as a special assistant to the University of South Carolina president. They were hired in 2017 in a case against pharmaceutical company Purdue Pharma “arising from Purdue’s marketing, promotion, and advertising of its opioid medication.”
Asked why Wilson hired the current and former attorney-lawmakers, AGO spokesman Robert Kittle in a written response Thursday said: “These current and former lawmakers were hired because they are the ones who brought the cases to us. They pitched the cases, we agreed to take them on, and retained them.”
Kittle also said the fact that the outside attorneys are current or ex-legislators “played no role in hiring them.” He didn’t respond to follow-up questions about whether those lawyers have earned any fees, and whether it was a conflict of interest for Wilson to hire Murrell Smith and Bannister, given their positions on the budget-writing Ways and Means Committee.
Neither Smith, who also is a member of the House Ethics Committee and used to be its chairman, nor Bannister responded Wednesday to written questions from The Nerve, including whether they considered their hiring a conflict of interest, given their positions on Ways and Means. Kimpson didn’t reply to a phone message Thursday for comment.
Smith is a partner in the Sumter-based Smith Robinson law firm; Bannister is a partner in the Bannister, Wyatt & Stalvey firm in Greenville; Kimpson works for the Mt. Pleasant-based Motley Rice firm, according to the firms’ websites.
From fiscal 2020 to this fiscal year, which started July 1, the AGO’s total budget, which includes state, federal and “other” funds, grew by $6 million, or about 6%, to $107 million, state budget records show.
Millions in legal fees
Under most of the “litigation retention” agreements provided to The Nerve, outside lawyers collectively would receive 21% of the first $25 million of a “net recovery,” with smaller percentages for incremental amounts above $25 million. The fees paid to attorneys who work for different firms would be divided based on the proportion of the “services performed by each lawyer.”
From fiscal 2019 through last fiscal year, the AGO settled 20 civil cases totaling $41 million, nearly $9 million of which, or about 22%, was retained by the AGO, records show. Most of the settlement proceeds – nearly $32 million – was transferred to the state general fund. Only one outside law firm hired by the AGO received fees.
The defendants included well-known corporations such as Apple, Fiat Chrysler, Home Depot, Honda, Johnson & Johnson, Uber and Wells Fargo, according to records.
The Nerve in 2019 revealed that the AGO over the previous four fiscal years settled a total of 33 civil cases for nearly $210 million, $40 million of which collectively went to the AGO and outside law firms hired in the cases.
Lawmakers used most of that money to help cover an annual list of one-time expenses by state agencies – some of which The Nerve questioned.
Records in The Nerve’s latest review didn’t list a $600 million settlement in 2020 with the federal government over plutonium storage in the state. In a July letter to The Nerve, Harley Kirkland, an assistant deputy attorney general, said the settlement wasn’t included because “while the attorney fees have been distributed, the balance of the settlement funds are still in escrow.”
Wilson publicly touted the deal as the “single largest settlement in South Carolina’s history.”
But Wilson was criticized for approving a collective $75 million in legal fees out of the settlement to two Columbia-based law firms, one of which – Willoughby & Hoefer – he worked at before he was first elected as attorney general in 2010.
The Nerve in October revealed that Wilson sought to keep $10 million to $15 million out of the settlement for his own agency, which, if allowed, would be the single-biggest payout to the agency in recent years.
Last September, the nonprofit South Carolina Public Interest Foundation and Columbia lawyer John Crangle sued Wilson, contending he didn’t have the legal authority to approve the fees to the two Columbia-based law firms. The case is now before the S.C. Supreme Court; oral arguments have not yet been scheduled, court records show.
Willoughby & Hoefer, which is a defendant in the suit, is represented by two attorney-lawmakers – Rep. Todd Rutherford, D-Richland, and Sen. Gerald Malloy, D-Darlington, records show.
In May, a resolution to spend the settlement funds, sponsored by longtime Senate Finance Committee chairman Hugh Leatherman, R-Florence, was quietly introduced, though the proposal didn’t contain any specifics on who would receive the money or how much of it would be appropriated.
In a June Nerve story, Sen. Brad Hutto, D-Orangeburg, who co-sponsored the resolution, said the full Legislature was expected to take up the matter when it returns to Columbia next month.