Courthouse notebook | Former Surfside Beach councilman Truett appealing ethics commission fine

Former Surfside Beach Town Councilman Sammy Truett is appealing a civil penalty handed down this year by the S.C. Ethics Commission in a case that is related to the Federal Bureau of Investigation’s ongoing criminal investigation into political donations with ties to the Myrtle Beach Area Chamber of Commerce.

The ethics commission in August ordered Truett to pay $48,000 for failing to deposit three donation checks into his campaign bank account and then failing to file quarterly disclosure reports showing those checks, other contributions and campaign expenditures. The commission agreed to reduce the fine to $12,556 if it is paid by February.

There is no indication that Truett is a target of the separate criminal investigation, which focuses on campaign donations delivered to politicians by chamber officials.

Truett, who has corrected the disclosure reports, called the commission’s fine “excessive” and said he hopes to have it further reduced during an appeal hearing scheduled for Jan. 18 in Columbia.

“All I had to do was go online and update my account,” Truett said. “I don’t see how I could be fined that amount of money. Drug dealers don’t get the kind of fine I got.”

The ethics commission stated in its Aug. 31 order that the former Surfside Beach councilman failed to disclose $3,750 in campaign contributions he received in 2008 and 2009.

Truett said his failure to report the checks and other expenses was an administrative error.

Included in the contributions were checks totaling $2,250 that Truett received from Brant Branham, the former chairman of the chamber’s board of directors. Truett told The Sun News last year that Branham handed him an envelope containing the checks during a fall festival in 2009.

Truett said Branham was standing with Surfside Beach Mayor Allen Deaton and Brad Dean, the chamber’s president and chief executive officer, when he delivered the checks.

“I was introduced to Branham and he said something to the effect of we appreciate the job you’re doing down here and here’s a little something to help you,” Truett said.

Surfside Beach Town Council historically has given the chamber of commerce all of the accommodations tax money state law requires to be directed toward tourism promotion – an average of about $144,000 per year over the past five years.

Truett said he put Branham’s envelope into his pocket and later stuck it under the visor in his car. Truett said he did not open the envelope until weeks later.

“When I did, my mouth fell open,” he said. “I couldn’t believe it. I didn’t know I was doing such a good job.”

The three checks included one for $250 from Branham and a pair of $1,000 checks from Carter Studios Inc., a Grand Strand photography studio, and Miller Direct Inc., a Fort Mill-based marketing firm.

Branham and the two companies were among donors who gave more than $300,000 in campaign contributions to Myrtle Beach City Council incumbents, area state legislators and others following passage in 2009 of a 1 percent sales tax for tourism promotion.

Money from the sales tax goes to the chamber for its out-of-area marketing programs. The chamber, which does not use a competitive bidding process, picks which companies get to do the marketing work. Several of the companies that donated money to politicians in 2009 have been picked by the chamber to do marketing work since the sales tax was approved.

Most of the 2009 campaign donations purportedly were from corporations in which Robert “Shep” Guyton – another former chamber board chairman – was a partner.

Some of Guyton’s business partners have said the corporations did not have any money and did not make any donations to politicians. The contributions also were not listed on the corporations’ tax returns. Guyton has not returned telephone calls seeking comment.

The corporations were named as the donors on cashier’s checks purchased on the same day – and in sequential order – at South Atlantic Bank, where Guyton was a member of the board of directors. Guyton resigned from the bank’s board last year. The source of the funds for those cashier’s checks is one focus of the FBI investigation.

It is not clear how much money the chamber has received from the sales tax since it began in 2009.

The chamber has received at least $28.3 million from the sales tax, according to the group’s quarterly reports. A report for the first-quarter of this year, however, appears to include a mistake. Revenue from the sales tax is listed as $0 on that report, while another line-item shows revenue from an unnamed source of $3.4 million. A chamber spokeswoman did not respond to a question about whether the $3.4 million should have been shown as sales tax revenue or whether another source is responsible for the funds.

If the $3.4 million was sales tax revenue, it would mean the chamber has received $31.7 million from the tax in a little more than two years.

In addition to the sales tax revenue, the chamber has received at least $6.4 million in other public money, including state grants and accommodations tax revenue, over the past two years – bringing the total of public money at the chamber since 2009 to more than $38 million.

The FBI has been investigating the local contributions since at least early last year, and several area business leaders have said they recently were interviewed by law enforcement about the donations and other issues.

Dean has said the chamber of commerce acted as a clearinghouse for some of the 2009 campaign contributions.

Dean, Branham and chamber lobbyist Mark Kelley delivered some of the donations– including the cashier’s checks – to politicians, including failed gubernatorial candidate Gresham Barrett. Dean and Branham – now the chief of staff for Lt. Gov. Ken Ard, who is under a state criminal investigation for possible campaign law violations – have said no chamber or public money was used to make the donations and that no laws were broken.

Timber theft settled

Conway-based Canal Wood LLC has agreed to pay $520,064.50 to the United States to resolve allegations that the company misled the government about the amount of timber it harvested from federal property near Cheraw beginning in the late 1990s.

The government claimed in a 2009 lawsuit that Canal Wood failed to include more than 1,000 timber scale tickets in settlement sheets it provided to the U.S. Fish and Wildlife Service. Each ticket represented one truckload of timber. The value of the withheld tickets totaled $208,064.50, according to court documents.

Canal Wood paid that value shortly after the government learned of the alleged scheme, and company employee Marcus Gaskins pleaded guilty in 2006 to his part in the timber theft. Gaskins was sentenced to three years of probation and a $3,500 fine.

Canal Wood agreed last week to pay an additional $312,000 to the government to settle claims related to the company’s part in the alleged scheme.

Pavilack property faces foreclosure

Waccamaw Bank plans to proceed with the foreclosure of a Surfside Beach convenience store on property owned by Myrtle Beach lawyer Harry Pavilack, according to documents filed last week in federal bankruptcy court.

Pavilack – who owes $72.1 million in mostly real-estate related debt – is in the midst of a Chapter 7 bankruptcy liquidation.

Among the debt is $377,420 in loans Pavilack received from Waccamaw Bank using the property at 1611 U.S. 17 South in Surfside Beach as collateral. The bank had agreed to postpone foreclosure if the trustee in Pavilack’s case could find someone willing to buy the property for at least the amount of debt owed against it. The trustee, however, could not find a buyer.