Council leader accused of taking $50,000 bribe to push sale of hospital
by GENE CRIDER T&D City Editor
June 29, 2006
John Rickenbacker has been indicted by a federal grand jury and suspended from public office following allegations the longtime leader of Orangeburg County Council was caught in bribery sting.
An indictment unsealed Wednesday alleges Rickenbacker took $50,000 from an FBI officer posing as a consultant for a company wanting to buy The Regional Medical Center.
In exchange for the money, he gave the agent an advance copy of a study of hospital finances, along with a promise to use his influence in getting Orangeburg and Calhoun counties to agree to sell the publicly owned hospital, according to the indictment.
He allegedly asked for the bribes even as Orangeburg County Council was trying to decide whether to spend $75,000 for a private consultant to study the financial health of the hospital.
Rickenbacker pleaded not guilty to the charges in U.S. District Court in Columbia Wednesday afternoon. He was released on $100,000 unsecured bond, meaning he did not have to put up any money to be released.
Rickenbacker refused to talk to reporters as he left the courthouse, but released a statement saying, "I am genuinely grieved at the embarrassment and pain these accusations will cause my family and constituents. I have attempted in my lifetime to faithfully perform my duties as a public official.
"I have served this state and my beloved Orangeburg County with a strong commitment to improving the quality of life for all of its citizens. I recognize these charges are a blight on my record of accomplishments."
Rickenbacker was charged with bribery concerning programs receiving federal funds and with extortion under color of official right, both stemming from the allegation that he took money to influence the sale of the hospital. If he's convicted on the bribery count, he could face a fine of $250,000 and 10 years in prison. The extortion charge carries a maximum fine of $250,000 and 20 years in prison.
Gov. Mark Sanford suspended Rickenbacker from his County Council seat Wednesday after receiving word of the indictment. The suspension will remain in effect until it is decided whether he is guilty or innocent of the charges.
Orangeburg Consolidated School District 5, which employs Rickenbacker as an assistant principal at Bethune-Bowman High School, had not received official word of the indictment Wednesday afternoon, spokesman Greg Carson said. The issue will be handled as a personnel matter.
The federal grand jury indicted Rickenbacker on June 21. U.S. Attorney Reginald I. Lloyd said the indictment remained sealed, in part, so as not to influence ongoing election primaries by injecting cynicism in the process, although Rickenbacker was not on the ballot.
The indictment was announced during a morning press conference at the Columbia FBI office held by state and federal law enforcement officials announcing the creation of a Public Corruption Task Force. The release followed a week of rumors and speculation about whether Rickenbacker, who was elected County Council chairman in January 1995, would be facing federal charges.
The series of events leading to the indictment began just before County Council's final decision to hire Chicago-based Ponder & Co. to do an analysis of the hospital's finances and operations. Council members said the study was not designed to prepare for the sale of the hospital.
As late a June 6, Rickenbacker said the study was not a prelude to sale or lease of the hospital.
A consultant working for an unnamed hospital company met with Rickenbacker on Nov. 3 to discuss the company's possible purchase of TRMC, according to the indictment. It alleges Rickenbacker solicited cash payments from the consultant for his assistance and eventual support for the company's purchase or lease of the hospital.
For $5,000 a month, he allegedly agreed to provide the consultant - and no other company bidding for the hospital - a copy of the confidential evaluation of the hospital once it was complete to give it an advantage in the bidding process for the hospital.
On Nov. 7, Orangeburg County Council agreed to hire Ponder & Co. to conduct the study.
The consultant later introduced Rickenbacker to an FBI agent posing as another consultant for the hospital company. Rickenbacker would later meet the agent a total of six times between December 2005 and May 2006. The FBI agent said he gave Rickenbacker a total of $50,000 in cash payments during that time.
The indictment claims Rickenbacker gave the agent a copy of the Ponder and Co. report on May 17. The study was presented to Orangeburg and Calhoun county councils during a closed door meeting on June 15. A copy with portions blacked-out was provided to The Times and Democrat on June 16.
Lloyd would not provide information beyond what was listed in the indictment, including the name of the company that sought to purchase or lease the hospital except "this is a company that operates nationally and had an interest in purchasing the hospital."
The case "came to us through a tip, so to speak, and it was followed up on," Lloyd said. The case was investigated by the FBI and the State Law Enforcement Division. Lloyd said federal guidelines do not allow him to confirm or deny whether someone else is being investigated.
"It's always a bittersweet moment to have to deal with these type situations," Lloyd said.
Rickenbacker entered the courthouse an hour before his 3 p.m. hearing before U.S. Magistrate Joseph R. McCrorey. During the hearing, the judge informed Rickenbacker of his rights and ensured he understood the charges against him.
Afterward, Rickenbacker remained in the courthouse with his two attorneys while reporters and photographers waited outside for him to leave the courthouse. They left as a black Maxima pulled up in front of the courthouse, saying nothing to shouted questions as Johnson handed out a prepared release. They left in the Maxima.
In his statement, Rickenbacker said, "Obviously, my lawyers, I.S. Leevy Johnson and Byron Gipson, and I have not had sufficient time to examine the purported evidence. We will make appropriate motions and conduct a thorough investigation in order to make a decision how my defense should be handled."
He said he would make no further comment on the issue and asked the press not to contact him.
The Public Corruption Task Force has recently been formed and did not investigate the Rickenbacker case. Law enforcement officials say the case is an example of what can happen when state and federal agencies work together.
The FBI, SLED, U.S. Attorney's Office, S.C. Attorney General's Office and the Internal Revenue Service are all involved in the task force.
The FBI has created a Web link for people wanting to report corruption, reportcorruption.fbi.gov. Concerned citizens can also contact the task force at (803) 551-4200 or (803) 737-9000.
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