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The former chief executive officer of Palmetto Railways – a taxpayer-funded subsidiary of the South Carolina Department of Commerce (SCDOC) – pleaded guilty in federal court this week to a public corruption charge.
Jeffrey McWhorter, 63, of Awendaw, S.C. pleaded guilty to conspiracy to commit “honest services fraud” after receiving tens of thousands of dollars in cash as part of a kickback scheme.
“Evidence obtained in the investigation revealed that McWhorter introduced a known co- conspirator, referred to as T.B., to a company headquartered in Texas,” a release from the office of U.S. attorney Adair Ford Boroughs noted. “T.B. hoped that McWhorter’s introduction would facilitate him being awarded a contract for work in the Charleston area by the Texas company.”
The problem? Prior to the Texas-based company receiving the award, McWhorter and his co-conspirator met with an employee of the company and agreed to pay a kickback to the executive “if his company was awarded the contract,” prosecutors noted.
The money would be wired to an employee of the company, who would then “pay McWhorter his portion in cash.”
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The unnamed conspirator “did in fact wire the money to a bank account” in the name of a business owned by the employee’s wife. At least $400,000 was wired, with McWhorter receiving at least $90,000 of that sum in cash.
The payments were made between January 2019 and July 2020, according to prosecutors. McWhorter retired in 2022 as CEO of Palmetto Railways – where taxpayers paid him more than $200,000 annually, not counting bonuses. He received more than $130,000 in bonus payments from 2018-2020, according to an investigative report from Rick Brundrett of The (Columbia, S.C.) Nerve.
Brundrett had to submit a Freedom of Information Act (FOIA) request to obtain those salary records, as SCDOC does not publish the compensation of railway executives on the Palmetto State’s public salary database.
For his admitted violation of 18 U.S. Code § 1346 – which prohibits individuals from engaging in “scheme(s) or artifice(s) to deprive another of the intangible right of honest services,” McWhorter faces a maximum penalty of five years in federal prison and fines of up to $250,000, in addition to restitution paid to victims.
U.S. district court judge David C. Norton accepted McWhorter’s guilty plea and will sentence him at a later date upon the receipt of a report prepared by the U.S. Probation Office.
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While it’s nice to see a corrupt “public servant” admit his misbehavior (and hopefully face the consequences), McWhorter’s story raises several other key points.
First and foremost, this kickback occurred in an arena where government has absolutely no business operating. Just as the Palmetto State has no business subsidizing a port, a power company or a hospital system, it has no business running a railroad. None of these things are even remotely core functions of government – and all of them could be run far more efficiently by the private sector.
Second, the true cost to citizens and taxpayers of scams like the one McWhorter was running is likely in the tens of millions of dollars annually. Not only are we missing hundreds – if not thousands of them – but most kickbacks are done far more “legally.” Just ask former S.C. governor Nikki Haley (here and here).
The case against McWhorter was investigated by the Columbia, S.C. field office of the Federal Bureau of Investigation (FBI) and prosecuted by assistant U.S. attorney Amy Bower.
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ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and eight children.
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3 comments
SC has always and will be a “pay to play” state.
I enjoy reading your articles, however, i was surprised you did not say what the job was that TB paid the Texas employee’s company for? Thanks
My goodness! There doesn’t seem to be enough resources available to investigate and press charges on these crimes. Our state is not the only state that has a ton of corruption but that doesn’t make it acceptable.