Brand new reporting today shows that James Smith used his disabled-veteran status to run a fraudulent pass-through business, profiting off of millions of dollars in contracts from the Department of Veterans Affairs.
Read the reports below:
The State: Democrat Smith loses special VA business status after not cooperating with audit
By Tom Barton
Post & Courier: VA suspends SC governor candidate James Smith’s firm after not cooperating with inspection
By Joseph Cranney
Daily Caller: Democratic Governor Candidate Blacklisted by Veterans Affairs After Evidence He Sold His Disabled-Vet Status
By Luke Rosiak
A company owned and run by South Carolina’s Democratic candidate for governor was blacklisted as a contractor for the Department of Veterans Affairs following allegations that he was selling his veteran status to corporations so they could tap into federal contracting dollars intended to help disabled vets.
On May 17, VA officials arrived for a surprise inspection, VA deputy assistant Secretary James Hutton told The Daily Caller News Foundation. The purpose was to find out if Smith was running a middleman company used to win lucrative federal contracts earmarked for disabled veterans, then passing all the work off to non-veteran companies in exchange for a cut for himself. Such so-called rent-a-vet scams are forbidden.
Smith’s company declined to cooperate with the VA and failed to provide evidence that the business was legitimate, Hutton said. On May 31, the VA’s Center for Verification and Evaluation issued a “Notice of Proposed Cancellation,” which would lead to the Congaree Group being stripped of its preferred, disabled-veteran contractor status if not resolved, according to Hutton. The Congaree Group still “did not provide the requested documents” explaining itself, he said.
On July 11, one month after Smith won the primary election, the VA banned the company from its preferential status, according to Hutton. The Congaree Group no longer appears on the VA’s list of approved veteran-owned businesses.
Smith’s multi-million dollar business has rarely been mentioned in the local media. His spokesman, Brad Warthen, declined to say a single word about the Congaree Group to TheDCNF and would not discuss the VA’s removal of it from the agency’s program.
The Congaree Group now offers a variety of services ranging from parking cars to conducting high-tech data analysis.
As recently as March 2018, the VA said it intended to award the company a valet-parking contract at the Augusta, Georgia, hospital.
TheDCNF became aware of the issue in the course of its reporting on the VA. A disabled veteran who spent years specializing in automobile services complained that he was not able to get work at the VA because non-veterans had taken it and pointed to Congaree.
The Charleston, South Carolina, VA’s public affairs office said its parking services were offered by a joint venture between “The Congaree Group and Ambassadors Plus,” TheDCNF reported on May 10. A detailed profile of the operation put out by hospital public affairs staff made no mention of Smith and said the valet services were run by Ambassador’s Alex Latsko.
In an interview for TheDCNF’s May story, Smith’s then-spokeswoman Alyssa Miller was evasive about the company’s basic operations, such as how many people worked there.
The VA’s surprise inspection followed one week later.
Congaree Group has made $7 million since 2010, and HM Congaree made an additional $650,000, according to contracting records.