Judge orders lawyers not to spend $75 million fee from SC AG Wilson in plutonium deal
A state circuit judge has ordered two Columbia law firms not to spend any of the $75 million fee S.C. Attorney General Alan Wilson gave them for alleged legal work to secure a $600 million political settlement in a plutonium deal, according to court filings at the Richland County courthouse.
State Judge Alison Lee ordered law firms Willoughby & Hoefer and Davidson, Wren & DeMaster to not do anything that would lead to the “transferring, spending, pledging or otherwise encumbering the proceeds of the $75 million wire transfer” that the state sent to them on Tuesday after being approved by Wilson.
Judge Lee’s order is in the form of what is called a “temporary restraining order.” It requires members of the law firms to appear in court next Wednesday to explain to the judge why she should not make her order permanent for the duration of an ongoing lawsuit that questions the lawfulness of the $75 million fee.
The two law firms did not reply to emails from The State seeking comment.
Wilson’s office has said the lawsuit has no merit.
The $75 million fee that Wilson wants to give the law firms is taxpayer money from a pool of funds maintained by the U.S. Department of Justice. The fee is taken from the $600 million settlement the federal government sent to South Carolina last week. Money not given to the lawyers would otherwise be spent in various ways for the public by the S.C. General Assembly.
A lawsuit in the case alleges that the two law firms did relatively little work to earn such a fee. And Wilson himself acknowledged in an Aug. 31 press conference that the $600 million settlement in a long-running dispute with the federal government was a political — not a legal — settlement. That means the deal was not ordered, or approved, by a judge but was instead worked out between S.C. elected officials and federal agencies, including the Department of Energy and the U.S. Department of Justice, whose leader, William Barr has authority to spend the millions. The dispute concerned plutonium stored in Barnwell County at the Savannah River Site.
At the Aug. 31 press conference, Wilson disclosed the $75 million legal fee. He told reporters that he knew that the fee might sound high, but he said the lawyers came up with a creative legal strategy that led to the settlement. Wilson did not give details of exactly what that legal strategy was. Wilson also said a contract his office had with the lawyers required him to pay such a large fee because the fee was to be based on a percentage of the settlement amount.
Gov. Henry McMaster quickly objected to the attorneys’ fees in a letter he sent Wilson. In the letter, McMaster told Wilson he could not endorse such a large payment because the settlement resulted from the “advocacy and coordination with members of [the State’s] Congressional delegation,” the lawsuit alleged.
The lawsuit alleged Willoughby & Hoefer and Davidson, Wren & DeMaster “engaged in no discovery: no interrogatories, no depositions, no experts, no document requests. Instead, they drafted pleadings and wrote briefs to prove the Department of Energy is required to pay South Carolina the statutory penalty from funds appropriated by Congress,” the lawsuit alleged.
“Wilson had no need to hire private counsel to address a relatively straightforward issue that government leaders ultimately negotiated. The Settlement Agreement was a political resolution brokered by elected leaders, including Gov. McMaster and (U.S.) Sen. (Lindsey) Graham,” the lawsuit alleged.
The lawsuit in the case alleges that Wilson’s action in paying the $75 million to the law firms is unconstitutional because it is up to the Legislature, not Wilson, to decide how to spend money intended for the state’s general fund and disbursed by the Legislature.
The lawsuit was filed by citizen-activist John Crangle, a Columbia lawyer who has written and spoken extensively on government ethics, and the S.C. Public Interest Foundation, a non-profit group that litigates cases against state and local governments where allegations exist that those entities have spent public money secretly or unlawfully.
The lawsuit was originally against Wilson, but on Wednesday, an amended complaint listed the two law firms as defendants.
The $600 million settlement deal puts to an end a long-standing disagreement between South Carolina and the U.S. Department of Energy over the disposition of some 11 tons of plutonium at the Savannah River Site. Plutonium is a deadly, radioactive substance used in the production of nuclear weapons.
The federal government had agreed to start a factory at the Savannah River Site to process the weapons-grade plutonium so it could be used for peaceful purposes, but the agreement fell through and South Carolina was stuck with the deadly material. Plutonium is known to be so deadly that it scared businesses away that might have otherwise located in the Aiken-Barnwell-Allendale area of South Carolina, officials of those counties have said.
This story was originally published October 1, 2020 at 4:21 PM with the headline "Judge orders lawyers not to spend $75 million fee from SC AG Wilson in plutonium deal."