Attorney Cory Fleming, et al Tied To Beaufort Drug Court Conflict - SC

Records from the Internal Revenue Service and the state Secretary of State's Office list:

Elizabeth Smith as the registered agent for two nonprofit corporations set up for the Drug Court: Beaufort County Drug Court Inc. and Beaufort County Problem Solving Courts Inc.

The first, Beaufort County Drug Court Inc., was created in August 2002 and was deactivated the same year, according to the S.C. Department of Revenue.

It's successor, Beaufort County Problem Solving Courts Inc., was created in November 2004 and became a registered nonprofit with the IRS in 2006.

It is not clear why nonprofit corporations were set up for the Drug Court.

According to an IRS form filed in November 2008 for the Drug Court's 2007 fiscal year — the latest IRS filing available:

— Manning Smith was the president of Beaufort County Problem Solving Courts Inc. The nonprofit had a seven-member board of directors, according to the IRS filing. Members included:

Beaufort attorneys Bruce Marshall and Cory Fleming, Hilton Head Island attorney Samuel Bauer, Beaufort County Planning Commission member E. Parker Sutler, Beaufort artist Robert Killian-Dawson, University of South Carolina-Beaufort professor Belinda Eggen and Frances Boyne. All board members served without pay.

Beaufort County Family Court Judge Peter Fuge was also a board member, according to his S.C. Judicial Department biography.

According to the IRS filing,

-the Drug Court's revenue in 2007 was $143,560. It came mainly from contributions by local governments — namely the town of Hilton Head and Beaufort County, which contributed $48,500 and $47,500 respectively. The Drug Court's expenses were $105,271 that year, with Manning Smith's $60,000 salary being the largest single expense. When the Drug Court started in 2001,

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Attorney Cory Fleming,et al (continued)

Public records show that former Beaufort County Clerk of Court Elizabeth Smith took an active role in the county's Drug Court program, a sideline that was ethically "problematic," an attorney with the S.C. Ethics Commission said.

The Drug Court, a quasi-judicial program aimed at rehabilitating rather than incarcerating people convicted of lesser drug charges, was run by Smith's husband, former Judge Manning Smith.

According to IRS documents, records in the state Secretary of State's Office and interviews, Elizabeth Smith:

• Acted as the "registered agent" for the nonprofit corporation that oversaw the Drug Court. As registered agent, Smith was authorized to accept legal and corporate documents on behalf of the corporation.• Handled the Drug Court corporation's financial books.• Appeared at least three times before the Hilton Head Town Council and Beaufort City Council to ask for money for the Drug Court.• Transferred money from an account in her office to the Drug Court. The amount that was transferred, when and whether it was proper to do so is part on an ongoing investigation by 14th Circuit Solicitor Duffie Stone. The money moved to the Drug Court was held in an account ordinarily used to help the clerk's office handle child support cases.

In addition, an IRS return filed by the Drug Court corporation for tax year 2007 states that $8,943 was "due from (the) clerk of court" to the Drug Court. The filing doesn't elaborate on why the clerk's office owed the money to the Drug Court.

A key part of the solicitor's investigation is an ongoing forensic audit of clerk's office books from recent years. The federal Health and Human Services Department also has been brought into the investigation because it was the source of some of the money that was moved from the clerk's office to the Drug Court.

Neither Elizabeth nor Manning Smith still holds public office. Elizabeth Smith resigned on July 30, minutes before her indictment on charges of embezzlement and misconduct in office was announced.

The charges she faces are unrelated to her involvement with the Drug Court. Rather, they stem from her using $23,500 from the clerk's office to pay premiums on insurance policies for relatives and mortgage payments on a family vacation home, according to the indictment.

She has pleaded not guilty to the charges. No trial date has been set.

Eleven days after his wife was charged, Manning Smith was removed as Drug Court judge by state Supreme Court Chief Justice Jean Toal.

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Attorney Cory Fleming, et al (continued)

ETHICS QUESTIONS

Elizabeth Smith's involvement in the Drug Court has raised eyebrows not only in the Solicitor's Office but also at the state Ethics Commission.

While it may be permissible for a clerk to appear before city and county councils and ask for money, Cathy Hazelwood, general counsel for the Ethics Commission, said "that public official would have to be mindful to make sure that when she's sitting in the Clerk of Court's office and acting in that capacity, that there is no actual benefit to that nonprofit."

"If she's cutting checks to the nonprofit, that could become problematic," Hazelwood said. "If that nonprofit was created to regularly interact with the clerk's office, then that's a problem."

Hazelwood also said a state law making it illegal for a public official to use his office for financial gain for himself or an immediate family member could also become a problem for the Smiths.

"There's problems all the way around," Hazelwood said.

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Attorney Cory Fleming Beaufort, SC, et al(continued)
TRANSPARENCY SOUGHT
Records from the Internal Revenue Service and the state Secretary of State's Office list Elizabeth Smith as the registered agent for two nonprofit corporations set up for the Drug Court: Beaufort County Drug Court Inc. and Beaufort County Problem Solving Courts Inc.
The first, Beaufort County Drug Court Inc., was created in August 2002 and was deactivated the same year, according to the S.C. Department of Revenue.
It's successor, Beaufort County Problem Solving Courts Inc., was created in November 2004 and became a registered nonprofit with the IRS in 2006.
It is not clear why nonprofit corporations were set up for the Drug Court.
According to an IRS form filed in November 2008 for the Drug Court's 2007 fiscal year — the latest IRS filing available — Manning Smith was the president of Beaufort County Problem Solving Courts Inc. The nonprofit had a seven-member board of directors, according to the IRS filing. Members included Beaufort attorneys Bruce Marshall and Cory Fleming, Hilton Head Island attorney Samuel Bauer, Beaufort County Planning Commission member E. Parker Sutler, Beaufort artist Robert Killian-Dawson, University of South Carolina-Beaufort professor Belinda Eggen and Frances Boyne. All board members served without pay.
Beaufort County Family Court Judge Peter Fuge was also a board member, according to his S.C. Judicial Department biography.
According to the IRS filing, the Drug Court's revenue in 2007 was $143,560. It came mainly from contributions by local governments — namely the town of Hilton Head and Beaufort County, which contributed $48,500 and $47,500 respectively. The Drug Court's expenses were $105,271 that year, with Manning Smith's $60,000 salary being the largest single expense. When the Drug Court started in 2001...
http://www.islandpacket.com/1482/story/101165...