Hilton Head deputy town manager guilty of ethics violations, agrees to pay $2,700
The S.C. Ethics Commission on Thursday found Hilton Head Island’s second-in-command guilty of violating three state ethics laws during his time as Beaufort County’s interim administrator, according to two consent orders obtained by The Island Packet and Beaufort Gazette.
Josh Gruber, now deputy town manager of Hilton Head, has agreed to pay the commission $2,700 in fines and administrative costs, but will not have to pay back the money he received in violation of state law.
The commission found Gruber guilty of violating two state ethics laws when he authored a $24,000 consulting contract for himself while working for Beaufort County in 2018. He violated another state law when he failed to disclose a $820 gift of tickets to a motoring festival on his 2017 statement of economic interests form, the commission said.
Gruber, reached by phone Friday, emphasized that he did not knowingly break the law.
“This has been something hanging over my head for a long, long time. It was taking a toll on me mentally and physically,” he said. “After discussing it with the staff at the ethics commission, I agreed that I would consent that my actions were a violation. The language makes it clear that my actions were not intentional violations of the act.”
The consent orders, signed by Gruber, were handed down by the state ethics commission Thursday without a hearing.
Gruber, according to the orders obtained by the newspapers, agreed to pay the fines because the commission “would most likely rule against him if this matter went to a hearing.”
The violations stem from two complaints that Port Royal resident Mare Baracco filed against Gruber on Jan. 11, 2019, and Sept. 25, 2019, respectively.
“I hope my fellow citizens sleep a little easier tonight, knowing Josh Gruber finally faced the music for his self enriching schemes,” Baracco said in a statement. “As to whether his punishment fit the crime, in my opinion it did not. But I’ll still take it.”
The Island Packet and Beaufort Gazette in July 2019 reported that Gruber’s consulting contract and the gifts to the motoring festival were connected to the county’s questionable use of the administrator’s contingency fund. The fund had no rules or oversight on how the money was supposed to be spent.
The story detailed how previous administrators used the fund to make payments without County Council approval to various consultants, organizations and events, including the contract and yearly contributions to the Concours d’Elegance motoring festival.
Beaufort County spokesperson Chris Ophardt, in a statement Friday, said the county “has come a long way since 2018.”
“This Council and County staff have worked hard to educate employees on ethics laws and improved systems for financial accountability and tracking,” Ophardt said.
Hilton Head Town Manager Marc Orlando, meanwhile, in a phone call said Gruber will remain employed at the town and will continue to serve as deputy town manager.
Orlando, who became the town’s top executive roughly a year ago, said Gruber’s ethics case was “acknowledged” internally at the town well before he took over as town manager.
Since Orlando was hired, “Josh has done a great job,” the town manager said. “That’s all I can ask for.”
A handful of Hilton Head Town Council members in phone calls Friday said they’ve had a positive experience working with Gruber and did not express concerns about him staying in his current position.
Ward 5 council member Tom Lennox said he was happy that Gruber will remain on staff.
However, one former official, who was on Beaufort County Council when Gruber authored the contract, said he thinks Gruber “got off cheap.”
“The fact of the matter is, Gruber is not a bad man,” said former Beaufort County Council member Rick Caporale, whose term expired in 2018. “He let himself be influenced by some unfortunate people ... Money is an incredible lure and that’s the bait they were dangling in front of him. But, he was not a victim.
“It can’t be a bad day when accountability is enforced and he certainly needed to be held accountable.”
Motoring festival tickets
The Jan. 11 complaint centered on Gruber’s relationship with the Hilton Head Island Concours d’Elegance, a nonprofit that runs the yearly high-end motoring festival and is funded through donations.
From 2016 through 2019, former Beaufort County Administrator Gary Kubic and Gruber allocated a total of $43,000 to the motoring festival via the county administrator’s contingency fund, with payments of $10,000, $10,000 and $13,000, according to previous reporting from The Island Packet and Beaufort Gazette.
Kubic has said he originally paid the group using the contingency account when Carolyn Vanagel, then-festival president, asked him to help with site improvements after Hurricane Matthew damaged the festival area. It was a one-time, unexpected circumstance.
However, Gruber, the deputy administrator at the time who became Kubic’s successor, continued to pay the festival group from the contingency fund in subsequent years. Those expenditures mean the county was making two payments to the group each year, as Concours already received between $25,000 and $26,000 in yearly funding through the accommodations tax process — funded by a 2% tax on rental properties.
According to emails between Gruber and Vanagel, Gruber paid $13,000 to the Concours group in 2019 for “lighting, sound, security and other infrastructure costs.”
The emails also show that for each year that Kubic and Gruber contributed county money to Concours, they were offered gifts from Vanagel in the form of sponsor badges and admission to the Flights & Fancy Aeroport Gala, a fancy evening of cocktails, fast cars and private jets organized by Concours.
Vanagel first referred to these gifts in a July 2016 email to Gruber: “Thanks to you and Gary for this support. As a thank you, we would like to offer you 4 Sponsor Badges which will give you access to all our public events.”
Gruber did not report the gift to the ethics commission in 2017, as required by law.
However, at 6:53 p.m. on Feb. 7, 2019, he amended his 2017 report to show he received $820 in gifts from Concours d’Elegance. Gruber made the change the same week the county began an investigation into his $24,000 consulting contract.
The ethics commission on July 7, 2021, found probable cause that Gruber violated state law for failing to disclose his receipt and use of the 2016 Concours d’Elegance tickets on his 2017 statement of economic interests form.
Gruber, according to Thursday’s consent order, acknowledged that he violated the state ethics act.
He mistakenly believed that he did not have to report the tickets because they fell out of the statutory definition of “gift,” the order said.
The commission disagreed with Gruber’s reading of the law, the order said. Gruber was allowed to accept the tickets but was required to report them on his statement of economic interests.
He must pay the commission a civil penalty of $450 and an administrative fee of $250 – totaling $700.
$24,000 contract
The Sept. 25 complaint detailed the consulting contract written by Gruber and authorized by then-county attorney Tom Keaveny. At the time of the contract, Gruber already had accepted the job as assistant town manager on Hilton Head.
Gruber’s contract — which included a one-time $24,000 payment — ran from Aug. 6 to Oct. 8, 2018, and didn’t become public until that September. It angered many on County Council who said it was written in secret, in nebulous language and without council approval. Others have considered the contract a way to pay Gruber after he wasn’t selected for the permanent county administrator job.
Gruber emailed then-CFO Alicia Holland Aug. 1, 2018, from his personal email account: “Good morning, Alicia: Per our discussion, can you please put the attached agreement in line for payment in next week’s check run? Thanks, Josh.”
The ethics commission on July 7, 2021, found probable cause that Gruber violated state law when he was “authorized to perform an official function relating to a contract in which he had an economic interest,” and when he failed to submit a written recusal statement during the writing and drafting of the contract.
The commission, according to the consent order, found that Gruber drafted the specific terms of his own agreement and did not recuse himself from the matter.
By negotiating and writing the agreement, Gruber violated two state laws, the commission found.
The order said that Gruber maintains he “acted in good faith throughout the entire process,” but conceded to the violations.
Gruber, according to the order, will have to pay the commission $1,000 for each law he violated — totaling $2,000.
However, the commission said that Gruber will not have to pay back the $24,000 he received through the contract because:
Although Gruber negotiated the agreement, Keaveny was still the administrator when it was signed.
The county’s finance committee later ratified and extended the contract for another month.
This story was originally published February 18, 2022 at 9:57 AM.
