Alvin Greene, 32, is unemployed and living with his parents in Manning, ABC News reported. He was asked to leave the military last year after 13 years.
State Democratic Chairwoman Carol Fowler asked Greene to leave the race Wednesday, the party said in a message posted on its Web site, citing media reports Greene was recently charged with "disseminating, procuring or promoting obscenity" by showing obscene photos to a University of South Carolina student.
"Today I spoke with Alvin Greene, the presumptive Democratic nominee for the U.S. Senate, and asked him to withdraw from the race," Fowler said in a statement. "I did not do this lightly, as I believe strongly that the Democratic voters of this state have the right to select our nominee."
Fowler said "the decisions of many of those voters" would have been affected if the report had come out before the election.
Greene scored an upset victory over veteran state legislator Vic Rawl, who spent almost $200,000 and traveled throughout South Carolina, while Greene did no campaigning, The (Columbia) State reported.
Political observers say Sen. Jim DeMint, R-S.C., is likely to be re-elected and Sen. Bob Menendez, D-N.J., head of the Democratic Senate Campaign Committee, said the national party was not "engaged in South Carolina."
"But I think one story out of South Carolina is the volatility that exists out there, where you have someone who spent no time and no effort on a campaign, and that guy (Greene) could win," Menendez told The Washington Post.
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