Jim Holderman and open government in South Carolina

Published April 2021

By SCPA Attorney Jay Bender

Former University of South Carolina president Jim Holderman has died, but his legacy lives in a crucial interpretation of the Freedom of Information Act by the Supreme Court of South Carolina.

The FOIA has application to “public bodies” which are subdivisions of the government, government corporations such as the Ports Authority, and entities supported in whole or in part by public funds or expending public funds.  If an entity is a “public body” it is subject to the open records and open meetings requirements of the FOIA.

To his admirers Jim Holderman was a visionary.  To his detractors he was a con who used public funds to burnish his image as a man with world-wide connections.  Both versions of Jim Holderman are rooted in fact.

On the con side of the ledger, Holderman used public funds for expensive gifts and honoraria to the well-connected, and to pay for high dollar hotel rooms and meals.  This side of Holderman came into public view because a journalism student, Paul Perkins, wanted to write a piece on Holderman’s hiring of Jehan Sadat, the widow of slain Egyptian President Anwar Sadat, to teach a class at USC.  Perkins was impressed that USC could attract a person of Sadat’s stature to teach a course, and his report focused on the upside he saw in the publicity generated by having this famous woman teach at USC.

But, like any good journalist Perkins asked how much it was costing to have Sadat teach a course.

USC declined to disclose the cost, and said the contract with Sadat was not with the University, but with a private corporation, the Research and Development Foundation.  This was Holderman’s first error.  Holderman and his top aides were advised privately that the information should be made public, but that advice was disregarded.  This was Holderman’s second error.

Paul Perkins was married to Cheryl Perkins, a young and talented lawyer.  Cheryl filed a suit on behalf of Paul seeking records from the Foundation.

About the time Paul Perkins was making his inquiries, John Monk, then a reporter for The Charlotte Observer, started making requests for access to financial records and contracts of the University and the Foundation.  The Greenville News and the Associated Press also started looking into expenditures by the University and the Foundation.  The Board of Trustees of the University voted, as the FOIA allowed, to exempt records from disclosure.  This was the third error.

Nothing gets a reporter’s juices flowing more than being told they can’t see records relating to the expenditure of public funds.

AP and The Greenville News filed suit against the Foundation seeking access to financial records.  The lead plaintiff was Chris Weston, then a reporter for the paper.  The trial of the case was before the late Carol Connor, a fearless circuit court judge.  The plaintiffs focused on financial transactions involving the Foundation arguing that the Foundation was a public body because it was supported in whole or in part by public funds, and expended public funds.  As was the mantra of Woodward and Bernstein in Watergate, the plaintiffs urged the court to “follow the money.”

The Foundation occupied office space provided by the University, and its staff was employed by the University.  The old Wade Hampton Hotel had been purchased by the University as a dorm, but when it was sold, one-half of the proceeds of the sale went to the Foundation as a “donation.”  When the federal government provided millions of dollars for construction of an engineering building for the University, the money was funneled through the Foundation.  Money was given by the City of Columbia and Richland County to landscape the Coliseum.  The money passed through the Foundation.  And, in a practice worthy of the Mafia in a Las Vegas casino, the Foundation “skimmed” a percentage of every grant awarded to a professor or the University even though the Foundation did nothing to “earn” the “skim.”

And it turned out that the profit from every vending machine in every building on campus was in a slush fund controlled by Holderman.

Judge Connor ruled that the Foundation was a public body and its records were public.  The Foundation appealed to the South Carolina Supreme Court arguing that it was a private, not for profit corporation not subject to the FOIA.  When the case was argued before the Supreme Court several of the justices were recused because of their connections to the University. 

After the Supreme Court hears argument in a case, the justices adjourn to a conference room adjacent to the bench.  The customary practice is to sit briefly to discuss the case to reach a preliminary determination of outcome.  One of the acting justices, now deceased, who sat on the case told me that after argument in the Weston case the members of the court left the bench for their conference room, but rather than sitting to discuss the case circled the table, while the justices said almost in unison that they believed the Foundation’s argument was “nuts.”  The court’s unanimous decision was that the Foundation was a public body subject to the FOIA, and that its records must be disclosed.  The case is reported as Weston v. Carolina Research and Development Foundation, and it is cited routinely by courts ruling on whether an entity is subject to the FOIA.

But, the saga continued.  After the Supreme Court ruled that the records were to be made public, the Foundation disclosed to the lawyers for AP and The Greenville News that the records had been “inadvertently” discarded.  When this disclosure was publicized, a former intern for the Foundation contacted the lawyers for AP and the paper to say that he might have information about the records.

The former intern said that while he was working for the Foundation he was asked to use his truck to haul some boxes to the landfill.  The former intern thought that the boxes might have the records that were the subject of the suit.  The young man must have been a fisherman or hunter because he was able to triangulate to identify a spot at the landfill where he had unloaded the boxes.  AP and the paper hired a bulldozer and operator to plow down through several layers of trash and soil to uncover the boxes.  Reporters in Hazmat suits then pored over the records to develop a fuller picture of Holderman’s profligacy with public funds.  The case ended Holderman’s tenure as president of the University, and the Foundation was required to pay a sizeable sum as attorney fees and costs to the successful plaintiffs.  This award of fees and costs included the cost of the bulldozer and operator.

As a consequence of the erosion in the financial position of news organizations, it seems unlikely that today spending by public institutions, large and small, would be met with the vigorous and expensive challenge underwritten by AP and The Greenville News.  Public bodies in South Carolina from small fire districts to large organizations like Santee Cooper are quick to take advantage of the lack of oversight to engage in questionable spending practices.  And because the news organizations aren’t pushing the members of the General Assembly for more open government the General Assembly has become complicit in government secrecy whether it is keeping the video from police worn body cameras from the public or endorsing money laundering schemes for chambers of commerce.  The true victims are the people of South Carolina who are frustrated and abused in their efforts to get information from school districts, police departments, local governments and state agencies.  Holderman’s open government legacy lives, but its continuing efficacy is at risk.

Jay Bender is a retired University of South Carolina professor and media lawyer who represents the S.C. Press Association and its newspapers.

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