Swansea, SC 07/07/2021 (Paul Kirby) – After several Swansea town councilmembers said Tuesday afternoon that Mayor Jerald Sanders had been indicted by law enforcement for misappropriation of town funds, both were interested to see if the mayor would presided over the town meeting yesterday afternoon. When the meeting was called to order, Sanders still held the gavel. For now, Sanders is free and has not been formal charged or arrested. According to Councilmember Mike Luongo, that could come as early as next week.
While he’s still mayor, Jerald Sanders certainly isn’t sitting on his laurels. In fact, he’s pushing hard for a property tax increase, a new Hospitality Tax, and an ordinance change that would allow him to spend $15,000 a year more of the town’s money at without full council oversight. According to Councilman Luongo, he and the rest of the council learned more details about what was going on during the meeting Tuesday.
Luongo said first that Sanders was in fact offered an opportunity to sit down with state law enforcement officers last week. During that meeting, Sanders could have begun working out a plea deal on whatever charges prosecutors decide is appropriate. Since the investigation has been centered around the town’s finances since Sanders became mayor, most think that at least one count of the misappropriation of funds will be included. That’s not to say any indictment would include just one charge. Although that’s possible, Sanders could be charged with multiple counts, one for each incident, or with something as simple as misconduct in office. Although this rarely happens when SLED presents a case to a Lexington County Grand Jury, the jury could also vote not to return an indictment at all.
Luongo said he was told that as a part of any plea, Mayor Sanders would have to resign from office. That’s something he doesn’t want to do. Therefore, after consulting with his attorney, Mayor Sanders did not meet with the SLED agents last week. That however does not make this go away.
The grand jury that would handle this matter meets in Lexington County beginning early next week. A spokesman for the S.C. Attorney General’s Office confirmed yesterday to the Lexington Chronicle that this was not being handled by the state grand jury.
Because Mayor Sanders has not admitted any guilt in the mismanagement of Swansea’s finances to date, the agents from SLED that investigated this will have to present their findings to that Lexington County Grand Jury. Keep in mind that agents have been combing through several years’ worth of financial paperwork and Swansea Councilmember Doris Simmons said Tuesday she’s been told they’ve uncovered plenty. “Once their evidence is presented, I’m sure we will see indictments,” Councilman Luongo said Tuesday evening. “SLED really doesn’t like to lose, and they build airtight cases from what I understand.” Both Luongo and Simmons feel positive some charges are forthcoming with one saying, “SLED works so hard for so long to put a case together but after their through, the case is usually a slam dunk.”
If an indictment is handing down by the grand jury next week, Sanders could either turn himself in at that point or law enforcement officers would pick him up for processing at the detention center. It is Luongo’s understanding that this would probably be done by Lexington County Sheriff’s Department personnel.
When an elected official is arrested, it is standard procedure for the governor of the State of South Carolina to suspend that official from office pending the outcome of legal proceedings. At any time during that suspension, the official could resign. If the accused is found guilty, the governor would remove the official from office permanently. The end result of all this would end the same. Jerald Sanders would no longer be the mayor of Swansea. Then there would need to be a special election set to select someone to replace him.
While the town waits for the grand jury to convene, Mayor Sanders is pressing forward with some budgetary items and a rule change that are very interesting given the situation with town’s money that is now unfolding. Swansea was supposed to have a budget hashed out and approved for the new fiscal year by July 1, or last Thursday. That didn’t happen. At this point, the council is looking at 2021/2022 budget that Luongo and Simmons say they just saw in its current form this week. Both admit that they were presented a budget document in late May prepared by someone who the mayor contracted with. What they received Tuesday is not that document at all.
The budget that they saw Tuesday was being explained by another man who was apparently key in its preparation. Here are a few highlights from that proposed 2021/22 budget you may find interesting:
As of yesterday, Tuesday, July 6, 2021, if the proposed budget that was presented were to pass, the town would operate over the next 12 months approximately $73,000 in the red. Luongo said no one ever explained how that deficit would be covered.
The proposed 2021/22 budget has a hefty tax increase included. Sanders is pushing from a 4.3% property tax increase for Swansea residents. That’s actually a higher percentage than state law allows in one year. There is however a loophole that would allow this to happen. Because they haven’t raised taxes in Swansea over the last three years, the state allows the town to go back and collect an amount equal to what they would have collected if they had passed tax hikes. As an example, if Swansea was allowed by state law to raise taxes 1% a year over the last three years but they didn’t, this loophole allows them to go back now and raise taxes by a total of 3% percent this year. That other 2% comes into play because of the "three year back" rule.
It’s also interesting to note that if this passes, Mayor Sanders and the councilmembers who support him could raise your taxes the maximum allowable rate starting in fiscal year 2021/22 even though they are now seven days into that budget year.
Additionally, Sanders and company are pushing to implement a Hospitality Tax of 2%. That’s a tax on prepared food and drinks that everyone who buys these items in Swansea would pay. Prepared food and drinks are the hamburger at Hardee’s, a sandwich at Subway, fried chicken from any business, the boiled peanuts at the corner store’s counter, a loaf of bread, and anything else that requires ingredients be prepared before it’s served. Even if you prepare it yourself, think using the soda machine at the local store where syrup and carbonated water are mixed in a cup with ice, it would be taxed. An H tax does not include food you prepare from scratch in your home.
By law, Hospitality Tax money can must be used for specific things that draw more people to Swansea to spend their money. Many Lexington County municipalities have these type taxes, and they can be a good way to raise community improvement funds. The question from many attending Tuesday’ s meeting in Swansea was the timing. Is this the right time for another tax increase of any kind?
The last thing Sanders is fighting to get passed is a huge raise in the spending that the mayor can do without the full council’s approval according to Councilmember Doris Simmons. Currently, town ordinance caps that spending at $5,000. That’s a generous amount when compared to many other Lexington County towns. Sanders would like to see it changed to $20,000 or four times more than it is now!
One pressing question is can any of this be completed before the grand jury meets next week? According to Luongo probably not. There would have to be another meeting and a public hearing on these proposals and although those can be done fast, no one thinks it will be that fast.
If for any reason Sanders is unable to continue to serve after next week, that also puts Swansea in another tough spot. Generally, Swansea’s five-member town council splits their votes three to two. Mayor Sanders normally has two councilmembers who typically vote with him, and Simmons and Luong have traditionally been outvoted when the oppose the mayor. If the mayor is suspended or resigns, the council would have just four members until a special election is held. A four-member council who don't agree on much could reach a lot of stalemates in a short time That’s not good when the town hasn’t even passed a budget although they are continuing to operate.
Everyone will be watching this closely as the grand jury gets ready to convene on Monday. We will continue to update this story as we learn more.
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