MYRTLE BEACH — More than two years after receiving criticism for its role as a clearinghouse for campaign contributions to politicians, the Myrtle Beach Area Chamber of Commerce continues to be linked to local groups seeking to influence elections, including one organization that paid for television advertisements urging the re-election of council members who supported a local-option sales tax increase that funnels millions of dollars each year to the chamber.
Those political links to a chamber thats charged with using tax dollars to promote tourism is offensive and unethical, according to former council candidate David Bodle, who ran against the incumbent council members who were supported by the Grand Strand Economic Improvement Alliances ad. Other politicians including two of the incumbents who were re-elected say political organizations with links to the chamber have a right to pick whoever they want to support in elections.
Such relationships are not illegal and have flourished in South Carolina and across the country since a 2010 ruling by the U.S. Supreme Court.
Brad Dean, the chambers president and chief executive officer, said the chamber does not provide any operational support or office space for the political organizations, but is a dues-paying member of several pro-business organizations and associations, including those [PACs].
Three political action committees list the chambers main telephone number as their business number on documents filed this year with the Internal Revenue Service. Those PACs also list the chambers telephone number as the contact for any questions about their financial records.
A fourth PAC the Grand Strand Golf Political Action Committee uses the same post office box for its mailing address as the other three groups, but it does not list a telephone number.
The four PACs have donated $56,000 to statewide campaigns since April, state Ethics Commission records show, including a push to get Republican Heather Ammons Crawford elected to S.C. House District 68 and a failed effort to help Greg Duckworth unseat state Rep. Tracy Edge, R-North Myrtle Beach, in last months primary for S.C. House District 104.
A group that funded the Grand Strand Economic Improvement Alliance also lists the chambers telephone number as its point of contact and uses the same post office box as the four PACs. That group called the MBLC Legislative Committee also has listed the chambers physical address at 1200 N. Oak Street as its headquarters on tax returns.
Michael Cortes spokesman for the Center for Lobbying in the Public Interest in Washington, D.C. said an organization such as the chamber is providing administrative support, even if it does as little as answer the phones or open the mail.
Political groups such as those linked to the chamber called 527 organizations because of the section of Internal Revenue Service law under which they are organized have grown nationwide since the U.S. Supreme Court decision in Citizens United vs. the Federal Election Commission. Such 527 organizations now can raise and spend unlimited funds on political campaigns, according to Bob Biersack, a senior fellow with the Center for Responsive Politics in Washington, D.C.
In addition to lifting financial limits, the courts decision allows 527 organizations to advocate for specific candidates, including purchasing unlimited advertisements touting or attacking an individual running for office, Biersack said.
That and other federal court rulings also suspended South Carolinas regulation of political action committees, according to Cathy Hazelwood, general counsel for the state Ethics Commission. Although political groups still must adhere to dollar limits when they give money directly to a candidate, there is no longer any limit on the amount of money a person can give to a 527 organization.
They can take as much money as they want, Hazelwood said.
That isnt necessarily a good thing for the electorate, which now has a more difficult time determining whose money is pushing a specific candidate or message, according to John Crangle, executive director of South Carolina Common Cause, which advocates for transparency and openness in government.
When 527s are turned loose to engage in electoral politics, its like a raging elephant in a china shop, Crangle said. Its very disruptive to the normal system of campaigning.
Crangle says the state and nation have entered into a Wild West-style of campaign financing, where politicians must kowtow to the big money interests both before and after their elections to succeed.
Ultimately, its going to sour the American people on the process, he said. Theyre already cynical because they feel politics is dominated too much by big money.
TV ads catch candidates by surprise
The Grand Strand Economic Improvement Alliance, a 527 organization formed on Oct. 17, 2011, represents one of the first post-Supreme Court ruling efforts by a chamber-linked group to influence an election.
The alliance received all of its $89,900 in funding from the tax-exempt MBLC Legislative Committee, which is comprised of current and former chamber board members, IRS documents show.
The Grand Strand Economic Improvement Alliance then used that money to buy television commercials touting chamber marketing success in using a 1 percent sales tax for tourism promotion the Myrtle Beach City Council approved in 2009. The commercials also urged voters to stay on the right track by re-electing council incumbents Mike Chestnut, Susan Means and Phil Render, all of whom voted in favor of the tax.
Bodle, who ran against the incumbents for a City Council seat, said the television ads caught me really off balance, adding that he could not figure out who would be spending so much money to win a local council race.
Bodle told The Sun News it is upsetting to learn that money for the ads came from a chamber-linked committee.
Im not shocked that they would do it, but I think it is tremendously unethical, Bodle said. Obviously, they were rewarding the council members who approved the 1 percent sales tax. I dont see any difference between that and handing out cashiers checks in envelopes.
Bodle said he is considering another run for council next year, but many prospective candidates shy away from local politics because they fear theyll face campaigns financed by deep-pocketed political organizations linked to the chamber.
Most people have come to realize that they cant win against that kind of money, he said.
Means, who won re-election to the council last year, said she was shocked when she saw the commercials, but also very grateful.
Means said the Grand Strand Economic Improvement Alliance did not consult with her before the ads appeared and she did not know the source of the groups funding.
Means said she does not see anything wrong with chamber-linked organizations supporting specific candidates.
They are free to choose who they want to support, she said.
Chestnut said he also was surprised to see the ads, adding: I dont know anything about the group that did them. Chestnut said he thinks the commercials are proper as long as they meet the legal requirements of the state ethics commission.
If its OK with them, its OK with me, he said.
Render did not respond to requests for comments.
How the money was spent
Steve Chapman a former chamber board chairman whose wife, Shelley, appeared in and narrated one of the commercials is president of the MBLC Legislative Committee. Steve Chapman, the managing partner at the Island Vista hotel in Myrtle Beach, did not respond to a request for comments.
Columbia lawyer and former state Republican Party director Todd Kincannon is the president of the Grand Strand Economic Improvement Alliance, according to IRS filings. More than a year earlier, Kincannon successfully sued the city of Myrtle Beach over a motorcycle helmet law that was passed by some of the council members the alliance supported. That law, requiring motorcyclists to wear helmets, was overturned by the state Supreme Court.
Kincannon did not respond to requests for comments.
The Grand Strand Economic Improvement Alliance paid $70,000 to Starboard Communications a Lexington-based media firm that is run by political consultant Walter Whetsell for the television commercials, telephone voter contacts and a direct-mail campaign.
Another $17,900 went to Columbia-based Dawson Public Affairs a political consulting group run by Katon Dawson, the former chairman of the S.C. Republican Party. Dawson said his company was approached by the alliance to conduct polling for the group.
Finally, a $2,000 check was sent to Kincannons law firm in Columbia for legal work.
It is not clear whether the alliance was formed specifically for last years council election or if it will participate in future campaigns. The group filed its report of contributions and expenditures called a Form 8872 with the IRS after last years election, but has not filed any paperwork this year.
The chambers lobbying arm
In addition to the Grand Strand Economic Improvement Alliance, four chamber-linked PACs have been trying to influence elections here and statewide.
The PACs are supported by a network of tax-exempt organizations that get their money from private contributions from chamber members, and a portion of the chambers membership dues.
The most active chamber-linked PAC in recent years has been the Grand Strand Statewide PAC, which is overseen by a group calling itself the Grand Strand Business Alliance. That group changed its name from the Grand Strand Business Association in February, according to S.C. Secretary of State records.
Mike Wooten, chairman of the business alliance, and Raymond Rollins, president of the business alliance, did not respond to requests for comments.
Wooten told chamber members last year the business alliance exists to conduct political activities the chamber either legally cannot do or would face tax consequences as a result of because of its tax-exempt status.
We are the lobbying arm for the chamber, Wooten said during the chamber membership meeting in December.
In order to get the tax dollars back that each and every one of us write a check for every year, weve got to be involved in lobbying, Wooten said. Weve got to be involved in letting our legislators know on the state and federal level what we need here. What better organization to handle that than the Myrtle Beach Area Chamber of Commerce?
The most recent chamber-related political group is the Grand Strand Golf PAC, which list Rollins as its contact person. Chapman also is a director of the golf PAC and chairman of another chamber-linked political group called the MB Lodging PAC, according to tax documents.
A fourth group the Grand Strand Restaurant PAC is headed by Billy Huggins, general manager of the WPDE TV-15 television station. Huggins, a member of the chambers board of directors, did not respond to a request for comments.
Since April, the four chamber-linked PACs have made 83 campaign contributions to 25 candidates. That includes four donations made by the Grand Strand Golf PAC before it had officially registered with the IRS.
More money, more influence
The creation of new 527 political organizations allows chamber-linked groups to give more money to candidates and provide more financial support for campaigns without repeating the controversial method employed in 2009, in which cashiers checks were purchased in the names of corporations some of them defunct, most of them with land as their only asset and then distributed to politicians by chamber officials.
The cashiers checks, which were purchased on the same day and in sequential order at South Atlantic Bank, carried the names of corporations affiliated with Myrtle Beach lawyer Robert Shep Guyton as the remitter. Guyton is a former board member at the bank and the chamber and is secretary/treasurer of the chamber-linked Grand Strand Statewide PAC.
It is not clear who purchased the cashiers checks, but Dean has said no public or chamber money was used.
Guytons business partners in the corporations, including chamber board member Mark Lazarus, have said the corporations had no money and they do not know the true source of the contributions.
Chamber officials delivered the cashiers checks and other contributions to politicians including city council incumbents who supported passage of the 1 percent sales tax for tourism promotion, leading some chamber critics to label the money a political kickback. Investigations into the campaign donations by the FBI and IRS followed, but no charges have been filed.
Chris Walker, who owns several businesses along Ocean Boulevard in Myrtle Beach, appeared in one of the Grand Strand Economic Improvement Alliances commercials. Walker said he does not know who produced the commercials or how they were financed, but he supports their message that the City Councils pro-business stance is helping to improve the local economy.
I think the council we have now is doing a good job of listening to the needs of the business community, he said.
However, Walker said he doesnt think people who support a particular politician or campaign should be able to hide behind a PAC or 527 political organization.
They should put their name behind it and not be afraid to say who they support, Walker said. I dont like secrets or gray areas of the law. It all needs to be completely above-board. Just come out and say who you are and who you support.
Contact DAVID WREN at 626-0281.