For several weeks this summer, people in the Midlands were captivated by the federal corruption trial of developer Jonathan Pinson and Upstate businessman Eric Robinson — not because of who those men were, but because of a third man whose name prosecutors brought up with unusual frequency: Mayor Steve Benjamin.
It’s not every day that a federal prosecutor says in court that the mayor of a major city and his business partner used other people’s money to “line their own pockets.”
It’s even more unusual for a prosecutor to make such a bold statement when the mayor is not, in fact, on trial.
Benjamin is a longtime friend and business partner of Pinson. The two partnered on a public-private housing development called the Village at River’s Edge — a project that was never completed. Benjamin got out of the project around the time he decided to run for mayor in 2009, though uncertainty remains as to precisely how and when he was bought out.
On July 3, the jury convicted Pinson on 29 of the 45 counts against him, for crimes ranging from racketeering, money laundering and wire fraud to stealing federal stimulus funds — including funds intended for the Village at River’s Edge.
But the trial ended without a clear picture of the mayor’s role in Pinson’s crimes. That means it also ended without a clear picture of what the verdict means for the mayor in the future: whether his close association with Pinson will hamper any aspirations he might have for higher office — or even to govern effectively in the position he holds now.
One detail from the trial was salacious enough to suck up most of the air in the room: that the mayor partied with two strippers in an Orlando hotel room on a 2010 trip paid for by a developer seeking to do business in Columbia.
“I regret being present for certain aspects of the previously referenced trip,” Benjamin said in a statement after the trial ended. “I should have used better judgment. However to be clear, I did not at any time engage in any illegal activity while in Orlando.” He maintains that the trip was unrelated to his position as mayor.
Indeed, said Benjamin, “I have done nothing illegal.”
But the trial involved much more than strippers — details that are in danger of being overlooked as Benjamin tries to repair his legacy. Having just been re-elected in November, Benjamin has more than three years remaining in office. This week, we take a look at lingering questions from the trial and how they might hang over Benjamin’s head in the years to come.
Free Times has asked Benjamin to comment on some of the court testimony and other key aspects of this story. But despite six days advance notice, and despite Free Times agreeing to submit questions in writing — something Benjamin has never before requested — the mayor did not respond by press time. Benjamin’s spokesman Michael Wukela said the mayor was out of town last week, then “was occupied with a number of personal items” over the weekend, and then went on vacation for “some well-deserved quality time with his family” and would not be back until this coming Sunday.
His silence aside, rumors about the FBI’s investigation of the Village at River’s Edge and other City of Columbia projects have dogged Benjamin’s administration — and may continue to do so.
Yet there seems to be some discomfort in Columbia about either condemning the mayor or letting him off the hook. The usual mainstream pontificators — The State’s editorial board, blogger Brad Warthen, WIS General Manager Donita Todd — have yet to weigh in on the mayor’s role in the Pinson trial.
In addition, fallout from the trial is all tangled up with the fact that the city has for many years had a part-time mayor who has to make his money outside City Hall.
Can things go back to normal for the mayor? Is his political career damaged? Is the federal investigation over? And why, given that the mayor has been accused of no crimes, did things play out the way they did in the courtroom?
The Unfinished Village
Benjamin is an attorney. He represented the City of Columbia as bond attorney on a proposed public-private Vista hotel deal back in the early 2000s — a deal that fell through, though Benjamin went on to invest in the private Hilton that was built there instead. He’s also worked as a lobbyist, and was a member of the board of the nation’s largest payday lender up until a month before his election. Since becoming mayor in 2010, he’s worked for three different law firms (including the first, his own) before leaving Parker Poe last month.
But it’s Benjamin’s role as a developer and investor that landed him near the heart of a federal corruption trial.
Benjamin and Pinson, a South Carolina State University board member, launched the Village at River’s Edge partnership in the mid-2000s. The former Roosevelt Village in North Columbia near the Broad River, a notoriously crime-ridden housing project, was torn down in 2006, and the two men began planning an affordable mixed-income housing development to replace it. Some of the housing would be federally subsidized, and some would not.
Benjamin approached Columbia City Council in 2006 — years before he ran for mayor — to propose a public-private partnership. He asked for the property to be annexed into the city, and for the city to put in public infrastructure: sewer, water, roads. Council assented.
The Columbia Housing Authority got involved, too. In 2010, the authority received $10 million in federal funding for the project. The money went toward building 60 affordable townhouses.
But the private part was never built. Today, the development stands half done, with the well-maintained Housing Authority units standing next to empty red-dirt lots on which Pinson was supposed to build.
Throughout the Village at River’s Edge phase of the trial, the picture that emerged was of Benjamin and Pinson persuading the people around them to invest their hard-earned money in a project from which Pinson, at least, was skimming funds.
Benjamin sold his interest in the project to Pinson when he was running for mayor in 2009 and 2010, though the exact date is unclear. Benjamin’s father also sold his share back to Pinson. Benjamin told Free Times at the time that he’d received $492,500 — his cost for the project — when he got out, adding that the land had been appraised for between $7 million and $9 million.
“I left seven figures on the table,” Benjamin said in 2010.
In 2012, the bank foreclosed on the Village at River’s Edge project. Even though Benjamin was no longer involved, NBSC put his name on the foreclosure notice, seeking to recover more than $1.1 million plus interest from Benjamin and Pinson. That was standard behavior, Benjamin said at the time, because Benjamin had signed a guaranty promising the mortgage would be repaid — it didn’t matter that he’d sold his share.
Pinson found a buyer — a former Carolina Panthers defensive end — and the foreclosure was averted.
Now, thanks to the trial, we know why the Village was never completed. Prosecutors say Pinson was taking money received through a $10 million federal stimulus grant — money that he was supposed to pay to construction contractors — and keeping it for himself.
Through extensive wiretaps, the FBI had built up a case against Pinson, accusing him of schemes stretching from South Carolina to Georgia. He was convicted of scheming to direct a South Carolina State University homecoming concert promotion contract toward his pal Eric Robinson. (Robinson was cleared by the jury.) He was convicted of trying to persuade S.C. State University to buy a multimillion-dollar tract of land, in exchange for which the seller would buy Pinson a Porsche Cayenne SUV. He was convicted of pocketing federal grant funds intended to help build a diaper plant in rural Marion County.
One by one, people close to Pinson rolled. The trial was a long procession of former business partners and confidantes testifying against him.
After the government laid out its case, Pinson’s attorneys didn’t mount any defense — they just went straight to closing arguments. Asked about that legal strategy, two prominent local attorneys both say it’s not unusual.
“The burden of proof is entirely on the accuser,” says Joe McCulloch, who represented one of the prosecution’s witnesses in the case. “It’s not all that unusual for the defense to simply say, ‘We don’t think they’ve proven their case, and you don’t think so, either.’”
The defense might have calculated that putting Pinson on the stand — where jurors would be reminded of Pinson’s foul-mouthed, boastful statements on government recordings — would not have helped his case.
“Some of the phone calls … were not very pleasing to the ear,” McCulloch says. “Sometimes you want to let the echo die rather than repeat the reverberation.”
Pinson has requested a new trial or an overturned verdict. But Pete Strom, a prominent defense attorney and former U.S. Attorney not affiliated with the case, doubts it’ll fly.
“Judge [David] Norton is a very experienced judge, and I would suspect that his rulings would most likely be upheld at the 4th Circuit,” Strom says.
Photo by Sean Rayford
Benjamin and the Trial
Though no charges were filed against Benjamin, a lot of the testimony involved him.
For example, at least $50,000 of the money used to buy out Benjamin came from a short-term $500,000 loan from First Community Bank, according to testimony June 20 reported by WIS, The State and the Orangeburg Times and Democrat. The loan was intended to pay bills while Pinson and Benjamin awaited federal grant funds. Benjamin helped persuade two of his contacts to take out the loan on his behalf, witnesses said. One of those contacts, engineer Jimmy Chao, testified that he ended up paying back the loan himself.
It’s unclear from reports of the trial whether Benjamin actually received the rest of the $492,500 buyout he’s said he received, and from what source.
There was other troubling testimony.
Demond Pearson, a friend of Benjamin’s since childhood, testified June 23 that in 2007, the mayor had asked him to invest $50,000 in the Village at River’s Edge project. Benjamin and Pinson told Pearson “his money would double in three years,” according to The State. Instead, Pearson’s money was deposited in the account of Benjamin’s law firm.
“But Pearson, who said he grew up a couple doors from Benjamin in the borough of Queens, N.Y., testified that he had to hound Benjamin and Pinson to get his money back,” the paper reported.
According to The State’s account of Pearson’s testimony, he didn’t get his final payment of $7,500 from Benjamin until just before the trial began. Pearson also said he’d had to threaten the mayor with exposing the whole scheme to Councilman Moe Baddourah, Benjamin’s opponent in last fall’s mayoral race.
Throughout the Village at River’s Edge phase of the trial, the picture that emerged was of Benjamin and Pinson persuading the people around them to invest their hard-earned money in a project from which Pinson, at least, was skimming funds.
The prosecutor even went so far as to say, in opening arguments, that both Pinson and Benjamin used money intended for the project to “line their own pockets” at the expense of others, according to accounts of the trial.
Benjamin and Pinson were investors in other projects together, too. They were among several investors in the Hilton in the Vista, a project in which the mayor is still vested. They also partnered on the restaurant Arizona’s, in which the mayor is also still an investor.
In a statement after the trial, Benjamin said, “We have the Pinson family in our thoughts and prayers.”
The Ethics of Strippergate
Richard Zahn is a rich guy. So rich he was unable to recall during his testimony just how many Porsches he owns. He was trying to sell a multimillion-dollar chunk of land in Orangeburg County, and he had several ideas for big development projects in Columbia.
In December of 2010, he arranged to fly Pinson and two other men to Florida to talk business. Pinson asked if Benjamin could come along. Zahn flew the four men to Orlando, where he put them up in a hotel, took them to dinner, drove them around in a limo — and took them to Rachel’s, a premiere strip club. Zahn passed out cash to the men to give to the dancers.
According to strip club review sites The Ultimate Strip Club List and Gentlemen’s Review, Rachel’s is one of the classier strip clubs in the city, with a strict “no touch” policy in accordance with Orlando law.
When the men were ready to leave, Zahn said, “I was on my way out the door to let the limo driver know to get ready to pull up … when I looked back and Jonathan or one of the gentlemen, I can’t remember specifically … was talking to two of the girls. He said ‘Hey, these two girls want to go with us.’”
Once the group reached either Pinson’s or Benjamin’s room at the Westin Hotel — Zahn couldn’t remember whose it was — one of the girls pulled him aside.
“One of the girls asked me out into the hallway and said, ‘What are we talking about tonight?’ and I said, ‘What do you mean?’”
At that point during Zahn’s testimony, one of the defense attorneys objected on hearsay grounds — essentially saying Zahn was quoting people not present to give their own testimony. The judge sustained the objection, and Zahn’s retelling of the night ended.
Zahn was allowed to testify, though, that he’d paid the two girls either $1,000 or $1,100 at the hotel. (It’s unclear from the court transcript whether that was total or per dancer.) All told, Zahn testified, he spent $7,000 to $8,000 on the trip.
That was just enough salacious detail to let the public’s imagination run wild as to what might have happened in that hotel room.
But there’s a deeper question: Was it ethical for the mayor to accept free travel, a hotel room and strippers’ favors from a developer hoping to do business in the City of Columbia?
Benjamin and his attorney say the trip wasn’t related to Benjamin’s role as mayor. As evidence, they offer emails showing Zahn didn’t even invite Benjamin on the trip — it was Pinson who suggested he come.
But other emails unearthed by The State suggest the men talked about city business. Zahn wrote to Benjamin afterward that it had been “an honor to meet you and discuss your vision for the city of Columbia,” and proposed a workshop to discuss “a possible strategy for the city of Columbia.”
No big deal, says Benjamin attorney: “As he does with everyone, Benjamin discussed his vision for Columbia; however, his comments did not relate to specific projects, focusing primarily on Columbia’s growth and strength as an emerging Southern city,” he said in a letter.
Regardless of why Benjamin went to Orlando the first time, a 2011 trip he and two City Council members took at Zahn’s invitation was clearly city business — and was paid for by the city as an official trip.
If the first trip was indeed related to Benjamin’s public position, he’s required to report it on financial disclosures made to the state Ethics Commission. And after the trial, that’s exactly what commission attorney Cathy Hazelwood said the mayor should do.
“That’s just a slam dunk there,” the commission’s attorney told Free Times. “He didn’t get invited because he’s a nice person. He got invited because he’s the mayor of Columbia.”
The commission asked Benjamin to report the trip. But in a reply, Benjamin’s attorney said the mayor had twice consulted Hazelwood about whether he should report the trip, and been told he didn’t need to.
As this story goes to press, the commission has not yet made a decision about Benjamin’s case. If it decides he must report the trip, Benjamin’s attorney says they’ll do so right away.
But the ethics blowup has already caused collateral damage.
The week after the blowup about the trip, the chairman of the commission board announced a new policy: Only Director Herb Hayden would be allowed to speak for the commission. Hazelwood is officially muzzled while the board works on a formal media policy.
The muzzling of Hazelwood is a big loss for the public trust, says South Carolina Press Association attorney Jay Bender.
“Hazelwood earned the reputation of being an expert on the law who could explain it in ways that the public could understand,” he wrote in a column last week.
Photo by Thomas Hammond
Why the Prosecutors Did What They Did
The most frequently discussed question from the trial is still probably this: Why, given that the mayor has not been charged with anything, did prosecutors make him such a prominent part of the trial?
Local radio host Cynthia Hardy framed it another way, asking guests on her show On Point recently whether the press was being fair to the mayor in focusing on him so much in coverage of the trial. (Yes, said all three guests, including this reporter — the press was just reporting what was said in open court about Benjamin.)
Legal experts put forward several theories about the prosecutors’ strategy — none of them mutually exclusive.
Theory 1: The prosecutors were addressing obvious questions about Pinson’s links to the mayor.
Pete Strom, a prominent defense attorney who was not involved in the case, suggests the prosecutors might have just been answering questions they knew jurors would have about the mayor’s links to the case.
“Every good lawyer knows that even though the judge instructs the jury not to research a case, the statistics show that many do,” Strom says. “Obviously the mayor has been the subject of significant press regarding this. One assumption would be that the prosecutors probably knew the mayor’s name would be discussed. That would be a potentially unanswered [question] in the jury’s mind.”
Theory 2: Prosecutors had to show Pinson’s influence over Benjamin in order to prove their case.
The theory being pushed by Benjamin’s criminal attorney, Greg Harris, is that prosecutors needed to show Pinson influenced powerful politicians in order to prove some of the racketeering charges against him.
Well-known Columbia defense attorney Joe McCulloch — who represented one of the minor players in the trial, a man named Philip Mims — says that’s a reasonable theory.
“The case against Pinson was he was making a career of trying to co-opt political figures and community leaders,” McCulloch says. “There was a relationship with Benjamin, and he’s a high-profile figure. He was familiar to people on the jury.”
“There’s a contention that it was unfair to talk about the mayor so much,” McCulloch adds. “Fair’s a relative term. All is fair in love, war and the courtroom.”
Theory 3: Prosecutors hope Pinson will roll on Benjamin or others.
Another possibility is that the story is not over yet. With Pinson convicted, he might have an incentive to implicate others in order to reduce his sentence.
“What happens is they hit these guys with a sentence of, like, 15 years,” says John Crangle, director of the South Carolina chapter of Common Cause. “He sits there a couple months, then starts [talking].”
And, indeed, Pinson faces up to 20 years in prison.
McCulloch agrees that the strategy might be to get Pinson to begin cooperating.
“That’s a fairly routine and logical possibility,” McCulloch says. “Certainly the government would hope he would cooperate.”
On Mayors, Developers and Ethics
In many ways, the flap over whether the mayor should report his 2010 to Florida trip obscures a larger issue: Was it ethical for the mayor to be taking favors from a developer planning to do business in Columbia? How should voters and taxpayers feel about that?
Crangle told Free Times during the trial that the issue is one of prudence.
“Maybe it might be legal for an official to accept gifts, but it might not be prudent,” Crangle says. “It might be a conflict of interest. There’s the minimum standard, and then there’s sort of a higher ethical standard.”
If being mayor were Benjamin’s full-time job, there wouldn’t even be a question: He shouldn’t be taking freebies from developers. But, his lawyer argues, he was in Florida in a “personal business” capacity.
Up until July 1 of this year, Columbia’s mayor has been paid a very small part-time salary — $17,500 in recent years — and not expected to work full time. For that reason, Columbia mayors have always held other jobs. Twenty-year Mayor Bob Coble, whose reign preceded Benjamin’s, was an attorney, like Benjamin.
Benjamin, meanwhile, drew a salary from two law firms during his time as mayor: first, Ogletree Deakins, then Parker Poe. Previous to that, he ran his own law firm.
But last year, Columbia City Council decided to significantly increase the mayor’s salary; supporters of the change hoped it meant that the mayor would work full time for the city. The issue came up during a debate over whether the city should adopt a strong-mayor form of government; even some opponents of a strong-mayor system hoped a full-time, adequately compensated mayor would better serve Columbia.
Starting July 1, Benjamin is paid $75,000 a year to be mayor.
And in the first week of July, as the Pinson trial was winding down, Benjamin left Parker Poe. Benjamin and a representative of Parker Poe say the parting was voluntary, amicable and had been in the works for several months.
However, Benjamin didn’t announce he’d be working full time as mayor. Instead, he told Free Times he plans to “pursue other business opportunities.”
The trial brings up another ethical question: Just how much are developers in the habit of wooing public officials? And do council members set up meetings and meet one-on-one with developers?
As a friend of Pinson’s and Benjamin’s, Tameika Isaac Devine helped set up a meeting for Zahn with Columbia Housing Authority officials and city staff. Devine was also one of the two council members, in addition to Brian Newman, who accompanied the mayor on his second trip to Florida to meet Zahn.
“Regardless of what’s happened since then, I was very impressed,” she says of Zahn’s developments down there. She was hopeful he could rebuild Gonzales Gardens, an old housing project in the heart of Columbia.
Devine says she’s been interviewed by the FBI and the U.S. Attorney’s Office about these interactions.
As for meeting with folks like Zahn and putting them in touch with others, she says that’s just how city business works.
“I do it all the time,” Devine says. “I get calls all the time from people. I actually just got an email from someone at United Water — it’s not unusual.”
Bob Coble, who was mayor before Benjamin, agrees. While he says he won’t comment on the Pinson trial, he says the basic facts of the way Zahn approached city officials didn’t surprise him.
“When I was mayor, you had a lot of different meetings with different folks,” Coble says. “I don’t think it is unusual. A lot of people call up — call the mayor’s office, usually.”
The mayor and council members will meet with people interested in doing business with the city, he says, and they’ll also set up meetings with staff and other interested parties.
During his time as mayor, Benjamin has recused himself from votes involving the Village at River’s Edge and the Hilton. But in a relatively small city like Columbia, it’s difficult for a public official to do only the people’s business when that’s not his only job.
While the prosecution dragged Benjamin’s name through the mud throughout the Pinson trial, the question remains: Will the mud stick?
Political observers have generally assumed that Benjamin has aspirations beyond City Hall — a congressional seat, perhaps, or a major federal appointment. But could Benjamin line up the needed support for a congressional run when everyone involved knows that the opening salvos of a political campaign would likely include ads linking him to a convicted felon?
Though it’s no doubt too early to tell, the mayor’s influence on Council could be affected by fallout from the trial, too. In his current position, Mayor Benjamin has often won major votes — including the Bull Street redevelopment plan and the subsequent decision to build a baseball stadium — on a thin 4-3 majority. It would only take one council member deciding that Benjamin has become a liability rather than an asset to change that equation.
Meanwhile, Benjamin is still the mayor. And he seems to have dug in since the trial, accepting lots of speaking engagements — and, says Devine, buckling down to doing the job.
So, what now?
People who’ve always thought Benjamin was shady — and they are a vocal group — feel vindicated.
Joe Azar, a frequent mayoral candidate who distributes an e-newsletter, was in raptures throughout the trial, sending links to each day’s trial news and hashing through the issues in his long missives.
“Truly, Benjamin has absolutely destroyed all credibility with the public,” Azar wrote in his July 4 newsletter. “Only those that still expect something from him defend him.”
But what about the people who supported Benjamin, or those who at least gave him the benefit of the doubt?
Bob Wislinski, a political consultant who did some fundraising for Benjamin in 2010 but has no ongoing ties to the mayor, draws a distinction between the city’s political class and the rest of the public in terms of how they view Benjamin.
Among political people, he says, the talk is mostly rumors — plenty of them — about what else might be coming down the pike.
As for regular folks, he says, it’s still too early to tell.
“I think that especially among middle-class voters, there’s a note of caution there … about Steve’s judgment, some of the circumstances he put himself in, some of the people he associated himself with,” Wislinski says. “Whether there’s going to be any longer term impact remains to be seen.”
“There has been a bewilderment created by Steve’s involvement: On one hand you have someone who’s obviously intelligent, obviously knows policy in a public sense — and then you have all these revelations and other circumstances. His image had been pretty positive up to this point. [But] we’re left wondering who exactly Steve is.”
Who, exactly, is Steve Benjamin? The prosecutors in Jonathan Pinson’s trial put that question in front of Columbians, but they didn’t answer it. Now, the city’s residents have to answer it for themselves.
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