Mayor Rauch resigns amid controversy

Embattled three-term Beaufort Mayor Bill Rauch resigned Monday, satisfying City Council's calls for his removal following an insider trading scandal and an accusation that he attempted to solicit a bribe.

Rauch, who was elected city councilman in 1993 and mayor in 1999, said in a Monday e-mail to The Beaufort Gazette that he loves Beaufort and only wanted to improve the city.

"Now there's the suggestion by some council members that I may be hurting Beaufort. If that even might be so, I won't be a party to it," he wrote. "So I'm going to step aside for the general election campaign season in Beaufort this year and enjoy it instead from Washington."

Three of Rauch's children live in Washington or attend school there, and Rauch has been pitching in on John McCain's campaign for president.

Mayor Pro Tempore George O'Kelley will serve as mayor until the November general election. A special election to fill Rauch's seat would have been held if there were more than 180 days between his resignation and the general election.

Rauch had said he would not seek re-election in November.

Rauch paid $44,000 to the Securities and Exchange Commission on Wednesday to settle an insider trading charge, after which O'Kelley and Councilman Gary Fordham called for Rauch's resignation. Councilwoman Donnie Beer joined in asking for Rauch's resignation Friday.

The council does not have the authority to remove a mayor from office.

City Councilman Mike Sutton did not call for Rauch to step down, but he joined the other council members in requesting a special council meeting to discuss Rauch's alleged improprieties. Sutton said he wanted the council to censure Rauch, but the decision to resign should have been left to Rauch.

"The true test of character as a man is to make those tough decisions. I'm glad he made it on his own rather than being forced into a situation where it would be debated," said Sutton, who is running for mayor. "It would not be my choice, especially in an election year when I'm seeking office, to ask an incumbent mayor to step down … (but) several incidents in the last year (don't) give me a good feeling about government at its finest."

Beer, who also is running for mayor, said Rauch did the right thing for the city by resigning.

"I think he (resigned) … because he loves the town," she said. "We have a lot of things we need to work on, and we don't need any distractions."

Fordham, who was the most vocal council member in calling for Rauch's resignation, said Rauch has been a good mayor, but it was time for him to move on.

"I'm glad that he has decided to resign," Fordham said. "I think he's lost the confidence of the City Council and I think, more importantly, he's lost the confidence of our constituents."

O'Kelley had no comment other than to wish Rauch and his family well.

Rauch took office in 1999 after defeating real estate agent and former state Rep. Billy Keyserling. Rauch was re-elected in 2000 and 2004, again beating Keyserling in the third election.

Last year, Keyserling told the State Ethics Commission that Rauch had offered to accept a bribe from Keyserling, but Keyserling turned him down.

Rauch wanted Keyserling to praise Rauch's work in letters to The Beaufort Gazette and serve as treasurer of Rauch's re-election campaign instead of running for mayor this year, Keyserling said. In exchange, Rauch offered to vote for annexation of the 1,005-acre McLeod Farm, which was being sold through Keyserling's real estate firm and includes 38 acres that Keyserling owns with three partners, Keyserling said.

An Ethics Commission investigation turned up probable cause, but the case was dismissed in April because o bribe actually took place.

Rauch said the alleged bribery scheme was simply a misunderstanding of comments he made "in jest" to Keyserling's attorney David Tedder at a wedding.

The SEC charge that Rauch settled last week stemmed from 2006 purchases of stock in Los Angeles-based Advanced Cell Technology, which employs Rauch as a consultant.

The SEC claims Rauch obtained confidential information about a new stem cell technology in his role as a consultant, then bought $11,162 worth of the company's stock for his children. When the confidential information was released publicly, less than three weeks later, the value of Rauch's investment shot up to $60,683.

Rauch admitted no wrongdoing as part of the settlement.

In his letter to the Gazette, Rauch reviewed his time on the council and cited several achievements.

He stressed that property taxes have dropped during his tenure, downtown streets has been repaired and beautified, parks have been created and improved, cooperation between local governments has grown and a plan for redeveloping Beaufort's Boundary Street gateway has been put in place.

Rauch's timeline

November 1993: Elected to Beaufort City Council

May 1999: Elected mayor in special election

November 2000: Elected to first full term as mayor

November 2004: Elected to second full term as mayor

August 2006: City adopts Boundary Street Master Plan

December 2006: Rauch casts tie-breaking vote to authorize annexation of 4,151-acre Clarendon Farms and construction of almost 7,000 homes

December 2006: Nearly $7 million renovation of Henry C. Chambers Waterfront Park completed

December 2007: City begins construction of a new city hall and a building for municipal courts and police department

December 2007: Rauch survives near-fatal car wreck on U.S. 21 north of Beaufort

April 2008: State Ethics Commission dismisses charge that Rauch solicited a bribe

July 2008: Rauch pays SEC $44,000 to settle insider trading charges

July 2008: Rauch resigns as mayor