SLED ends 7-year Horry Schools probe. $220M building deal was among many issues reported

A lengthy state law enforcement investigation into Horry County Schools’ $220 million new school construction project quietly concluded at the end of last year with no criminal charges filed.

The full extent and findings of the investigation currently remain unknown, but numerous depositions and documents gathered as part of a former HCS employee’s civil dispute show the clearest picture yet of what was happening behind the scenes of the controversial building program.

The district school board awarded the contract to Firstfloor Energy in October 2015 to design and build five new schools despite submitting the highest bid — nearly $60 million above the budget the district had initially set.

HCS Superintendent Rick Maxey was then contacted by a SLED agent in December 2015 about that selection process due to a complaint received by the S.C. Attorney General’s Office, the district revealed in a 2019 press release.

Communications between Robbie Ferris, Firstfloor’s CEO, and an attorney contracted by the district that occurred months before bidders presented to a district selection committee were forwarded to SLED as part of that investigation, the press release added.

Controversy over First Floor selection

Numerous district officials have since expressed concerns about how Firstfloor was awarded the contract, and they often point to former board chair Joe DeFeo as inappropriately pushing for that selection, according to depositions collected as part of an employment lawsuit filed by Mark Wolfe, former HCS facilities director. DeFeo died in 2018.

That lawsuit, in which Wolfe alleged defamation and a conspiracy between district administrators and the building contractors to have him fired, is on the verge of being dismissed after a judge granted summary judgment last week to most of the defendants, including HCS and Maxey.

The district declined to comment about the litigation, HCS spokeswoman Lisa Bourcier wrote in response to questions submitted for this story. An attorney representing Wolfe didn’t return a message seeking comment, and a spokeswoman for Firstfloor did not provide comment prior to publication.

The district was actively soliciting bids for designs for the new schools in 2014, but that process was scrapped after board members met with Ferris and his team, The Sun News previously reported.

Ferris promoted the idea to HCS board members for energy-positive schools — buildings that would produce more energy than they consumed — both inside and outside of official board meetings, according to previous Sun News reporting.

The subsequent Request for Qualifications included language about energy-positive buildings, and Firstfloor was one of three finalists chosen to present to a selection committee that included board members, district officials and principals of the schools that were to be built.

DeFeo appointed five board members to the 10-person committee, and there was no previous precedent of board members being appointed to this type of committee, according to an affidavit from Teal Britton, a former HCS public information officer who also has a pending employment lawsuit against the district.

A third-party consultant who the district hired to review the bids was dismissed after ranking Firstfloor last of the three finalists, court records show. And DeFeo, despite not serving on the committee, attended every meeting and was pressuring committee members to choose Firstfloor, while criticizing the other finalists, including M.B. Kahn Construction, former officials said in affidavits and depositions.

“Mr. DeFeo said to me, ‘I wouldn’t let M.B. Kahn build a doghouse for me,’” Robert McCrary, a former HCS facilities employee who served on the selection committee, said in an affidavit.

McCrary also alleged that he saw DeFeo calling Ferris during the other finalists’ presentations to feed him information about his competition, though Ferris denied that during his deposition.

Firstfloor ultimately received the highest overall score, with four of the five board members giving the company scores 50-115 points higher than the next closest competitor, according to the score sheet included in court records. McCrary and Wolfe, who also served on the committee, both ranked Firstfloor last.

DeFeo then signed the contract without consulting district staff, who were still negotiating with Firstfloor over language in the contract, court records show. This was also unprecedented, several staff members said, because those contracts were always previously signed by the district’s superintendent or chief financial officer.

What was SLED investigating?

The SLED investigation officially closed Dec. 29, 2022 with no criminal violations found, according to a letter 15th Circuit Solicitor Jimmy Richardson sent to the agency to tell them he was declining prosecution. Richardson thanked the SLED agent for his work on the long, complicated case.

“From your report and conversations we have had, it appears the discrepancies in the bids were explainable as the school district switched the criteria from the initial bids to items that were more expensive on the front end with hopes of it being more energy efficient on the back end,” he wrote.

HCS SLED investigation letter by David Weissman on Scribd

The letter lists Ferris and DeFeo as the subjects of the investigation, though it’s likely SLED agents investigated other issues related to the building project beyond the selection process, according to the civil court records.

SLED agents told Maxey after that initial interview to contact them if any additional concerns arose, and he told them about at least three separate issues related to the construction project in later years, Maxey said during his deposition.

Current board chair David Cox and former board member Holly Heniford both told The Sun News they were unaware of Maxey’s additional reports to SLED.

Maxey contacted SLED agents during June 2017 after Wolfe had discovered alleged inflated bids, primarily related to landscaping work. Costs submitted to the district were up to $50,000 higher than what subcontractors were actually bidding, according to court records.

The issue was discovered after The Sun News submitted a Freedom of Information Act request for subcontractor contracts, which Firstfloor refused to release, court records show.

Aaron Thomas, president for Metcon, the primary construction company for the project that dealt with subcontractors, recalled during his deposition that he met with Wolfe about the issue. The prices that Metcon submitted to the district were what they received from Southern Asphalt, a primary subcontractor on the project, that solicited the bids from other vendors, he said.

Thomas said he would ask representatives of Southern Asphalt about the disparity, but he couldn’t recall during his deposition how that was resolved. Southern Asphalt, based in Conway, was acquired by another company last August, and attempts to reach the former owner for this story were unsuccessful. DeFeo previously worked for Southern Asphalt, according to various depositions.

Around the same time during 2017, Ferris told Wolfe that board member Shanda Allen was pestering him to hire her friend’s company to complete some of the landscaping work, according to Ferris’ deposition. Ferris said he was reluctant to hire the company because its prices were higher than others, and they didn’t have good references, but they did end up giving that company some work.

Wolfe had recorded the meeting when Ferris told him that and played it for Maxey, who also reported that information to SLED, Maxey said during his deposition. Allen did not respond to a voicemail seeking comment.

Maxey later told a SLED agent during 2018 about concerns that Wolfe had signed a change order for the project that gave business to a company owned by Wolfe’s stepson, he said during his deposition.

Maxey ended up filing a complaint about Wolfe to the S.C. Ethics Commission, which found no violation, in part, because the law governing that potential conflict of interest doesn’t define stepson as a “family member,” according to the commission’s dismissal.

Wolfe was put on administrative leave, and Maxey recommended his termination, but the board voted to reinstate him, court records show. He remained facilities director until 2020, when the district eliminated his position.