CHAIRMAN INDICTED: Rickenbacker faces federal corruption charges
By GENE CRIDER T&D City EditorThursday, June 29, 2006John Rickenbacker has been indicted by a federal grand jury and suspended from public office following allegations the longtime leader of Orangeburg County Council was caught in bribery sting.
An indictment unsealed Wednesday alleges Rickenbacker took $50,000 from an FBI officer posing as a consultant for a company wanting to buy The Regional Medical Center.
In exchange for the money, he gave the agent an advance copy of a study of hospital finances, along with a promise to use his influence in getting Orangeburg and Calhoun counties to agree to sell the publicly owned hospital, according to the indictment.
He allegedly asked for the bribes even as Orangeburg County Council was trying to decide whether to spend $75,000 for a private consultant to study the financial health of the hospital.
Rickenbacker pleaded not guilty to the charges in U.S. District Court in Columbia Wednesday afternoon. He was released on $100,000 unsecured bond, meaning he did not have to put up any money to be released.
Rickenbacker refused to talk to reporters as he left the courthouse, but released a statement saying, "I am genuinely grieved at the embarrassment and pain these accusations will cause my family and constituents. I have attempted in my lifetime to faithfully perform my duties as a public official.
"I have served this state and my beloved Orangeburg County with a strong commitment to improving the quality of life for all of its citizens. I recognize these charges are a blight on my record of accomplishments."
Rickenbacker was charged with bribery concerning programs receiving federal funds and with extortion under color of official right, both stemming from the allegation that he took money to influence the sale of the hospital. If he's convicted on the bribery count, he could face a fine of $250,000 and 10 years in prison. The extortion charge carries a maximum fine of $250,000 and 20 years in prison.
Gov. Mark Sanford suspended Rickenbacker from his County Council seat Wednesday after receiving word of the indictment. The suspension will remain in effect until it is decided whether he is guilty or innocent of the charges.
Orangeburg Consolidated School District 5, which employs Rickenbacker as an assistant principal at Bethune-Bowman High School, had not received official word of the indictment Wednesday afternoon, spokesman Greg Carson said. The issue will be handled as a personnel matter.
The federal grand jury indicted Rickenbacker on June 21. U.S. Attorney Reginald I. Lloyd said the indictment remained sealed, in part, so as not to influence ongoing election primaries by injecting cynicism in the process, although Rickenbacker was not on the ballot.
The indictment was announced during a morning press conference at the Columbia FBI office held by state and federal law enforcement officials announcing the creation of a Public Corruption Task Force. The release followed a week of rumors and speculation about whether Rickenbacker, who was elected County Council chairman in January 1995, would be facing federal charges.
The series of events leading to the indictment began just before County Council's final decision to hire Chicago-based Ponder & Co. to do an analysis of the hospital's finances and operations. Council members said the study was not designed to prepare for the sale of the hospital.
As late a June 6, Rickenbacker said the study was not a prelude to sale or lease of the hospital.
A consultant working for an unnamed hospital company met with Rickenbacker on Nov. 3 to discuss the company's possible purchase of TRMC, according to the indictment. It alleges Rickenbacker solicited cash payments from the consultant for his assistance and eventual support for the company's purchase or lease of the hospital.
For $5,000 a month, he allegedly agreed to provide the consultant - and no other company bidding for the hospital - a copy of the confidential evaluation of the hospital once it was complete to give it an advantage in the bidding process for the hospital.
On Nov. 7, Orangeburg County Council agreed to hire Ponder & Co. to conduct the study.
The consultant later introduced Rickenbacker to an FBI agent posing as another consultant for the hospital company. Rickenbacker would later meet the agent a total of six times between December 2005 and May 2006. The FBI agent said he gave Rickenbacker a total of $50,000 in cash payments during that time.
The indictment claims Rickenbacker gave the agent a copy of the Ponder and Co. report on May 17. The study was presented to Orangeburg and Calhoun county councils during a closed door meeting on June 15. A copy with portions blacked-out was provided to The Times and Democrat on June 16.
Lloyd would not provide information beyond what was listed in the indictment, including the name of the company that sought to purchase or lease the hospital except "this is a company that operates nationally and had an interest in purchasing the hospital."
The case "came to us through a tip, so to speak, and it was followed up on," Lloyd said. The case was investigated by the FBI and the State Law Enforcement Division. Lloyd said federal guidelines do not allow him to confirm or deny whether someone else is being investigated.
"It's always a bittersweet moment to have to deal with these type situations," Lloyd said.
Rickenbacker entered the courthouse an hour before his 3 p.m. hearing before U.S. Magistrate Joseph R. McCrorey. During the hearing, the judge informed Rickenbacker of his rights and ensured he understood the charges against him.
Afterward, Rickenbacker remained in the courthouse with his two attorneys while reporters and photographers waited outside for him to leave the courthouse. They left as a black Maxima pulled up in front of the courthouse, saying nothing to shouted questions as Johnson handed out a prepared release. They left in the Maxima.
In his statement, Rickenbacker said, "Obviously, my lawyers, I.S. Leevy Johnson and Byron Gipson, and I have not had sufficient time to examine the purported evidence. We will make appropriate motions and conduct a thorough investigation in order to make a decision how my defense should be handled."
He said he would make no further comment on the issue and asked the press not to contact him.
The Public Corruption Task Force has recently been formed and did not investigate the Rickenbacker case. Law enforcement officials say the case is an example of what can happen when state and federal agencies work together.
The FBI, SLED, U.S. Attorney's Office, S.C. Attorney General's Office and the Internal Revenue Service are all involved in the task force.
The FBI has created a Web link for people wanting to report corruption, reportcorruption.fbi.gov. Concerned citizens can also contact the task force at (803) 551-4200 or (803) 737-9000.
Governor suspends Rickenbacker; Wimberly to serve as council chair
Gov. Mark Sanford signed an executive order Wednesday afternoon immediately suspending John H. Rickenbacker from his Orangeburg County Council seat.
"This suspension shall remain in effect until such time as he shall be formally acquitted" of the charges listed in a federal grand jury indictment that was unsealed earlier in the day, the order says.
If he is convicted of the charges against him, the governor will remove him from office.
Rickenbacker has 2-1/2 years remaining on his current four-year term.
The state Constitution gives South Carolina governors the power to suspend public officials accused of crimes that involve moral turpitude, and governors routinely exercise that authority accordingly.
With Rickenbacker's suspension from office, the council chairmanship moves to Harry Wimberly, the vice chairman, County Administrator Bill Clark said.
"That's the specific purpose of having a vice chairman designated," to take charge in the absence of the chairman, Clark said. "Wimberly will assume the duties (of chair) until the new council is seated in January."
As is council's practice, at the first meeting in every January, "one of the first orders of business will be (for the council) to vote for a chair and vice chair," Clark said.
Reaction is shock; impact on TRMC issue is uncertain
Orangeburg County and Regional Medical Center officials expressed shock at the news of Orangeburg County Council Chairman John Rickenbacker's federal indictment on charges of corruption handed down Wednesday in Columbia.
Many praised his years of work on council and as chairman.
According to the indictment, Rickenbacker, 54, received $50,000 between December 2005 and May 2006 from an undercover FBI agent posing as a consultant to a company interested in acquiring TRMC.
In exchange for the money, Rickenbacker allegedly told the agent he would provide a copy of a valuation study on the hospital's financial health, which would assist the company as it prepared to bid on TRMC, the indictment said.
Harry Wimberly, county council vice chairman, said he was caught off guard by Wednesday's events.
"I'm totally shocked. I don't know what else to say," he said. "Basically we are going through a process, and as far as we got in the process was getting the (hospital) evaluation back."
Wimberly, who has been an outspoken critic of the hospital, declined to make further comment for fear anything he said without fully comprehending the charges against his colleague would be "without thought."
He said he has never personally been approached by a company wishing to discuss the possible purchase of TRMC.
"This is pretty tough to digest right now," he said. "As vice chairman, my focus right now would certainly be to put the county in a positive light. I know this is going to be a big blow to the county."
Orangeburg County Administrator Bill Clark said he had not received any official correspondence on the indictment and had not heard of any formal statements made by Rickenbacker.
He said for the time being, the county has more questions than answers.
"I understand there's always two sides to every story," Clark said. "I know part of one and none of the other. I don't want to prejudge the situation until all the information comes in."
He praised Rickenbacker's work on council as far as his pushing for the County/City Industrial Park and the recent announcement of a gymnasium to benefit the entire county.
"I was very unprepared for this," Clark said. "In all the years I've known Councilman Rickenbacker, I would never have suspected anything such as this."
TRMC board Chairman Willie B. Owens agreed that news of Rickenbacker's indictment was a "total surprise."
"John has been an excellent council member ... and an excellent leader," he said. "Sometimes bad things happen to the best of us. I'm very sorry this has happened. I really feel for John and his family at this particular time."
As for the recent hospital study conducted by Chicago-based Ponder & Co., Owens, who during Tuesday's TRMC board meeting questioned the objectivity of the study, said trustees will accept it for what it's worth to TRMC.
"There are a lot of things we don't agree with, but there are a few we can probably benefit from," he said. "I think in view of who we are and where we are in South Carolina and the economy, we (TRMC) are doing well."
TRMC President Tom Dandridge said its not uncommon for companies to talk to local officials about the option of buying or leasing a hospital - legally.
"It's pretty common to buy or lease hospitals," he said. "John was a real force in this community, and when something like this happens, it's kind of hard to determine what this all means. Of course he is not guilty until proven. He cast a big shadow, though."
To his knowledge, Dandridge said the hospital was not involved in the FBI investigation leading to Rickenbacker's indictment.
The hospital study conducted by Ponder & Co. will be looked at by the hospital, he said, and the board will review and make comments concerning it appropriately. He said the company is a trustworthy source, as the hospital utilized the company several years ago for an assessment.
"Ponder - their name has not been associated with this story - so I guess I'm assuming that we still need to proceed with responding to the report until somebody tells me different or facts come out to indicate that it is indeed tainted," Dandridge said. "As it stands now, we're going to have to let this other story run its course, and we'll deal with this (the study) as presented."
Ponder & Co. Managing Director David Atchison declined to comment on the indictment and study.
Columbia-based consulting health care economist Lynn Bailey, who most recently worked in Orangeburg several years ago during discussions to develop an ambulatory surgery center, said this type of indictment isn't shocking.
"I'm not surprised because there's so much money tied up in health care," she said. "If you're TRMC, you've got to have mixed feelings. It's got to be incredibly unnerving to them that you've been working for the good of your community to find out the chair of your county council may have used that to solicit money for a bribe.
"But that's how much money is in health care. It's real money. I'm glad to hear that in the for-profit industry, faced with something like this, they did the right thing."
Calhoun County Council Chairman David Summers said he's saddened to see Rickenbacker's indictment and said in his eyes, he and Rickenbacker had a very good working relationship.
"I'm sorry to see this happen to him," he said. "We didn't always agree, (but) I think he's done a good job for Orangeburg County."
Summers said a representative of a company interested in purchasing the hospital approached him and Calhoun County attorney Lee Prickett but was told they were not interested. Calhoun County co-owns the hospital with Orangeburg.
In fact, he said more than a half dozen companies have expressed interest in purchasing TRMC.
"I'm still not interested in selling the hospital," Summers said. "I think it would be a bad deal for the citizens of Orangeburg and Calhoun counties."
Orangeburg County Councilman Clyde Livingston said he, too, knows of at least five or six companies that have expressed interest in purchasing the hospital, but "I always said it would be a council decision and anything that goes before council would have to go through the administrator."
He said he doesn't recall anything out of bounds coming up during those discussions and said if the sale or lease of the hospital were to be discussed, the indictment "would not take it off the table."
Additionally, Livingston said he's never discussed the sale of TRMC with Rickenbacker and believes the study by Ponder was a good idea.
"Information is never a bad thing," he said. "I've always been the one on council accused of wanting too much information."
Councilman Johnnie Wright, who had not seen news reports prior to being contacted by The Times and Democrat, said he was shocked at the allegations and his heart goes out to Rickenbacker and his family.
He said the hospital study supported by him and council was not to prepare TRMC for sale but to find out what improvements, if any, need to be made at the facility.
Under Rickenbacker's leadership, Wright also cited economic development accomplishments including establishment of two industrial parks.
"He (Rickenbacker) was a good leader," he said, "extremely intelligent, well-versed. I think he had Orangeburg County's interests at heart. You can't deny that despite his lapse in judgment."
Wright said he does not, however, condone the actions leading to Rickenbacker's charges.
"The county has certainly grown, and we have a good team," one he hopes can stay together despite the allegations its chairman faces. "I'm hopeful and pray that it will.
"The county has to move on."
How the case unfolded
The trail of events that led to the indictment of Orangeburg County Council Chairman John Rickenbacker began with a meeting arranged to discuss the sale of The Regional Medical Center.
According to the federal indictment unveiled Wednesday charging Rickenbacker with extortion and bribery for accepting money to influence and facilitate sale of TRMC, an unidentified company that operates hospitals in rural and suburban areas around the country was considering attempting to acquire the hospital that is owned by Orangeburg and Calhoun counties. A "contract consultant" who "regularly traveled to Orangeburg ... met with various individuals to determine whether the company should attempt to acquire TRMC."
The consultant arranged a Nov. 3, 2005, meeting with Rickenbacker to discuss the company's interest in TRMC, the indictment states.
It was during that meeting that Rickenbacker "solicited the company consultant for cash payments" in exchange for John H. Rickenbacker's assistance and eventual support on the council for a sale and lease of TRMC by the company.
"In return for the cash, John H. Rickenbacker agreed to provide the company with a copy of a confidential evaluation report to be generated at the request of the council by a private consulting company analyzing the financial condition of TRMC," the indictment states.
The report, which was to take three to four months to complete, was authorized by council four days later on Nov. 7. Results were submitted to the Orangeburg and Calhoun councils, and the TRMC board, this month.
Rickenbacker allegedly told the consultant he wanted $5,000 a month until the study was complete, at which time he would provide a copy of the report exclusively to the company to give it advantage in the bidding process, the indictment states.
After the meeting, the company consultant introduced Rickenbacker by phone to an undercover FBI agent posing as another company consultant. The FBI agent and Rickenbacker then met six times from December 2005 to May 2006.
"During a contemplated 'phase two' of the relationship," Rickenbacker offered to assist the company in obtaining public support for sale or lease of TRMC and the votes on council needed to make it happen, the indictment states.
On May 17, Rickenbacker delivered the "confidential valuation report" to the FBI agent posing as the consultant ... In exchange for delivery of the valuation report and the promise of future support and favorable treatment for the company," he accepted $50,000 in cash payments, the indictment states.
Extras
http://thetandd.com/extras/indictment.pdf">Read the full indictment
http://thetandd.com/articles/2006/06/29/opinion/doc44a347d255947093253777.txt">Editorial opinion
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