Were Beaufort County school board members threatened to keep quiet about FBI investigation?

Some Beaufort County Board of Education members say they were threatened with possible criminal and civil penalties, including “prison time,” if they didn’t keep quiet about the Beaufort County School District’s involvement in an FBI investigation related to the construction of two Bluffton schools — legal advice that they say was, at best, inaccurate or, at worst, intentionally misleading.

While the district’s attorney, Drew Davis, denies making any threats or ever using the words “prison time” in a Jan. 16 closed-door meeting with superintendent Jeff Moss and the board, emails sent afterward show these same board members pressing Davis to cite the law that prohibited them from publicly discussing the subpoenas, to which Davis responded, “I represent the district and stand by my position.”

In that same exchange, board vice-chairwoman Geri Kinton reminded everyone that, “Any disclosure, which can only be self-serving, will be investigated and may be prosecuted to the extent the law allows.”

However, about three weeks after the board was advised not to openly discuss the matter, board member John Dowling forced the issue by publicly disclosing the federal subpoenas at a Feb. 3 work session.

Neither he nor any of the other board members who have since talked about the subpoenas have been jailed or fined for their divulgence, nor do any appear to be under investigation, raising questions about whether the board was misdirected and whether bad timing might also explain the pressure to keep the FBI investigation from the public.

On April 21, the board will ask taxpayers to support a $76 million bond referendum that would, in part, expand the two schools referenced in the subpoenas.

Few board members wanted to weigh in on how the disclosure of the district’s involvement in the federal investigation might affect the upcoming referendum, but some said the district’s general reputation has been hurt by the ensuing speculation.

“Now everyone is saying ‘it’s this’ or ‘it’s that’ and shame on them,” Kinton said. “It’s really serving the district no purpose and my job is to protect the district.”

Board member JoAnn Orischak said she is more concerned about the actions of district staff than the possible motives behind the pressure to stay silent.

“If the board was intentionally misled, then in my mind, that would be grounds for dismissal for whomever lodged the threat,” she said.

What happened on Jan. 16?

In early January, the U.S. Attorney’s Office subpoenaed two district employees, chief financial officer Tonya Crosby and facilities, planning and construction officer Robert Oetting, requesting records pertaining to the construction of May River High School and River Ridge Academy, including information about the bidding process and the architect used in the project, according to Moss and several board members.

The architect, North Carolina-based Hite Associates, had previously worked with Moss when he was superintendent in two North Carolina school districts, and the Bluffton projects were the firm’s first foray into South Carolina school district construction, according to previous reporting by The Island Packet and The Beaufort Gazette.

The district’s involvement in the federal investigation and Dowling’s decision to make it public have further divided an already polarized board, which split in the wake of Moss’ 2015 ethics violations.

A six-member majority of the board, which includes Kinton, typically aligns itself with the superintendent, who is the board’s sole employee, while a five-member minority bloc, which includes Dowling and Orischak, is less trusting of Moss and, by extension, Davis.

The minority bloc says they often feel silenced whenever they question Moss, Davis or the board’s majority — and the majority says the minority bloc doesn’t always act with the district’s best interests at heart.

It was during the Jan. 16 executive session with Moss and Davis that board members first learned of the subpoenas.

Accounts of what transpired behind closed doors differ, depending on who you ask.

The board’s minority bloc said the subject of the federal subpoenas was raised toward the end of their more than hour-long discussion and in a way that did not invite questions.

Board members did not see the subpoenas at the meeting, but Davis later wrote in an email to the board that he would have provided the subpoenas had anyone requested.

Dowling, Orischak, Christina Gwozdz, Joseph Dunkle and board secretary David Striebinger all say Davis described potential criminal and civil penalties for divulging the existence of the subpoenas in a way that indicated the consequences applied to board members.

They did not think he was talking about those consequences in a general or conditional sense, as Davis later suggested in the email exchange.

Dowling, Gwozdz and Orischak said the word “prison” or phrase “prison time” was used at the meeting.

“That was the implication — that it would apply to anyone who violated the confidentiality,” according to Striebinger, who did not recall the word “prison” being used, but said he walked away from that meeting with the impression that he could go to prison for divulging their existence.

Davis, who reports directly to Moss, denies telling board members they would be subject to civil and criminal penalties and denies saying “prison” or “prison time.”

“I can tell you I have never discussed any fining or jailing,” he said. “Anyone who thinks that has made some jump or leap in their own mind. I realize that suits the four board members and it suits their narrative, but to do that without the whole discussion, which I can’t share with (the public) because of attorney-client privilege, creates an absolute incorrect and inaccurate narrative.”

Davis said he could not elaborate further, citing the “rules of professional responsibility,” a set of ethical standards lawyers follow.

“I realize from time to time, like this one, when there’s clearly spurious allegations being made, that puts me in an untenable position.”

He said his job is to provide advice that protects the district and the board from any legal action or potential legal action.

Asked if he advises his clients of all consequences that would apply to anyone or just those that are applicable to his client specifically, Davis said, “The answer to that question is going to be situationally dependent. That’s an impossible question for me to give an absolute to.”

Three board members who typically align with the majority say they did not feel threatened by Davis’ advisement during the Jan. 16 meeting.

“We were urged to be extra careful that we don’t disclose this information inadvertently or purposefully and that there are consequences,” Kinton said, adding that people have been civilly and criminally charged for disclosing information relating to an ongoing federal investigation.

Evva Anderson said she did not remember if prison was discussed, and Mary Cordray was sure it was not, but qualified her answer by saying the meeting took place more than a month ago.

Board member Bill Payne did not attend the Jan. 16 meeting and board member Cynthia Gregory-Smalls did not return a call for comment.

Board chairman Earl Campbell, who carries a taxpayer-funded cellphone for school board business, did not return two calls for comment, but in early February declined to answer questions about the subpoenas.

“That’s the reason I can’t get into this because I may get sued,” Campbell said.

‘A tactic to intimidate’

While it’s not unusual for a lawyer to advise a client not to talk, minority members of the board felt that the advice they received Jan. 16 went too far.

Dunkle said he felt pressured to stay silent about the subpoenas.

“While the advice was lawful, I feel it was a tactic to intimidate and prevent disclosing this information,” he said.

Gwozdz said she did not feel threatened by Davis’ instructions, but immediately questioned the accuracy of his advice.

“It sounded (like) hocus pocus to me,” she said.

After fact-checking it with her personal attorney, Gwozdz said her impression of Davis’ advice is that it was “blatantly misleading.”

According to the federal rules of criminal procedure, “no obligation of secrecy may be imposed on any person” except for grand jurors, court reporters, interpreters, operators of recording devices, transcribers of recorded testimony and government attorneys.

Officers of financial institutions are also bound by federal law from disclosing the existence or contents of a subpoena for records. If divulged, officers can face fines or up to five years in prison or both. Public school districts are not considered financial institutions.

The federal government cannot typically compel or prosecute others for disclosing the existence of a federal subpoena, according to John Simmons, a former U.S. Attorney for the District of South Carolina.

In 2015, a federal judge struck down language within a subpoena that required silence from the recipient. Prosecutors later conceded the language was “inadvertent” and “improper.”

In some cases, private businesses are actually required to disclose some information relating to a federal government investigation on reports submitted to the U.S. Securities and Exchange Commission, likely to keep companies honest with its investors.

The same sort of rationale applies to public bodies with elected officials working on behalf of the public, Dowling said, which is why he motioned to make the existence of the subpoenas public.

“The ‘warnings’ we received were false, and we can only assume the ‘cautions’ were meant to intimidate us and prevent public disclosure of the federal investigation,” he said. “The fact that we revealed this information does not jeopardize or compromise the investigation. We are not remotely connected to the list of positions that are bound by secrecy.”

Conflicting loyalties?

This is not the first instance in which board members have questioned Davis’ legal advice, an issue that stems from the inherent contradiction in Davis’ role in representing both the board and the district.

While the hiring application for the district’s general counsel noted that the position reports to and is annually evaluated by both the superintendent and board, Davis’ contract was made only with the district. Per the terms of the agreement, the superintendent evaluates him and holds unilateral termination power.

“I believe this incident (at the Jan. 16 meeting) demonstrates that there’s a lack of confidence in getting advice solely from Drew,” Striebinger said.

After the subpoenas were publicly disclosed Feb. 3, Anderson said that she was considering consulting an outside attorney on the issue.

Dowling spoke with a lawyer shortly after the Jan. 16 meeting.

“We ran for our own attorneys when we left the room,” he said.

Orischak said: “What recourse did I have but to consult outside counsel?”

In an email to Davis and the board, Orischak asked Davis for the source of his statement regarding civil and criminal penalties. She told him she had contacted outside counsel and had “concerns about the accuracy of his statements.”

Davis replied, “I consulted multiple information sources. As a reminder, I stated twice that the potential sanctions depend on the disclosure and the discloser. Your counsel is welcome to disagree; however, we have differing clients.”

Orischak again asked for his sources on this information.

Kinton then responded with a warning about board members consulting their own attorneys.

“You have been provided legal guidance — you can take it or leave it,” she wrote to the board. “... I would suggest erring on the side of caution.”

Releasing the subpoena

Though the board has since disclosed the district’s involvement in a federal investigation, the fight continues over how much more information, if anything, should be disclosed to the public.

Some board members, particularly Orischak and Dowling, pressed Moss to publicly release the subpoenas.

The newspapers, along with five others, submitted an open-records request for a copy of the federal subpoenas Feb. 5.

The board officers decided Friday on behalf of the entire board and school district to deny those requests, citing an “unambiguous preference” not to release the subpoenas from the U.S. Attorney’s Office in order to protect the investigation’s integrity.

Board members have been unable to get their own copies of the subpoenas.

In late January, Orischak told Davis she would stop by the district office to receive her copy. Instead, Davis showed her the subpoenas on a projector screen.

Cordray said presenting documents on a projector was not unusual for executive session and said she preferred this format because it saved trees and money in printing costs.

She, along with Kinton and Anderson, said they did not see value in releasing the subpoena given that the public already knows what information was requested in the subpoenas.

“What you’ve got is speculation running rampant and I don’t think that’s a good recipe,” Cordray said. “When we have facts, that’s when we should make it public.”

Orischak disagrees.

“The governing body can’t even get our hands on this subpoena,” Orischak said. “Let the public see (the subpoenas) and let them decide what they think this is all about. There’s going to be speculation either way. We can’t avoid that.”

This story was originally published February 16, 2018 at 9:28 AM with the headline "Were Beaufort County school board members threatened to keep quiet about FBI investigation?."