MYRTLE BEACH — Statements made by the chairman of a political organization with ties to the Myrtle Beach Area Chamber of Commerce have raised questions about the accuracy of some information included on federal tax returns for three political action committees.
Mike Wooten is chairman of the Grand Strand Business Alliance, which oversees one of the political action committees, or PACs, and is affiliated with the other two. He said in an article published in the chambers monthly newsletter that financial records for the three PACs are not kept at the chambers offices, as The Sun News previously reported.
The GSBA and its related associations and PACs are not managed or operated by your chamber of commerce, Wooten stated in a letter to chamber members published in the August edition of The Grand Strander newsletter. Records are not kept at the chamber and the funds come directly from private businesses.
It is not illegal for the chamber to provide administrative or operational support for PACS. The connections between the two groups have been in the news because the chamber has been criticized for its political activities in the wake of the 1percent sales tax increase in Myrtle Beach to fund the chambers tourism marketing.
However, the most recent tax returns for the three PACs list the chambers main telephone number of 626-7444 as the same telephone number for the political organizations. Those tax returns received by the IRS this spring also list the chambers telephone number as the number for the office where the PACs financial records are kept.
In addition, two of the PACs filed reports this month with the S.C. Ethics Commission listing their telephone number as 916-7211. That is the office telephone number of Jim Wright, executive vice president for the Myrtle Beach Area Chamber of Commerce, according to the chambers online telephone directory. The third PAC did not file a report with the ethics commission.
Wooten, Robert Shep Guyton -- treasurer for the Grand Strand Business Alliance -- and Brad Dean, the chambers president and chief executive officer, did not respond to requests for comments.
David Slough, a lawyer representing the chamber, said in an e-mail to The Sun News that the newspapers questions are another example of [the newspapers] efforts to mischaracterize the chambers activities and operations.
While these entities could be operated out of the chambers office and originally did so pursuant to its boards directive in 2004, the chamber changed that policy in 2009, Slough said. Currently, local business leaders are overseeing the operations of these entities through a fulltime director and other contract agents/services.
Sloughs e-mail did not address information included on all three PACs tax returns or state documents filed this month directly linking two of the PACs to the chamber.
It is not clear whether the tax returns include inaccurate information, if Wootens statements in the newsletter are inaccurate or if the PACs moved their financial records after their most recent tax returns were filed this year.
The chambers telephone number is listed on line 42(a) of each PACs most recent tax return. Line 42(a) requests the name, address and telephone number for the location where each organizations financial books are kept.
Richard Heath, a certified public accountant in Surfside Beach, said that line refers to the actual physical location of where an organizations financial records are kept.
It is not clear why the PACs would list the chambers telephone number if the financial records are not kept at that location.
In addition, Dean in a May 2010 e-mail to The Sun News said the chamber had stopped providing administrative support for the business alliance, although the alliance continued to list the chambers telephone number and street address on the 2010 year-end tax return as the contact point for the groups financial records.
The alliances tax return for 2011 was not available.
IRS spokesman Mark Green said he cannot speak about specific tax returns, due to disclosure laws, and would not address questions about the PACs.
In general, however, Green said the IRS regularly double-checks information on tax returns called voluntary compliance checks to ensure their accuracy and follows up if there are questions.
The IRS has strict penalties including imprisonment and fines for knowingly including false information on a tax return, according to the agencys web site.
However, Heath said he has never heard of any organization that has been penalized for including false contact information on a return. Heath said the IRS primarily uses the contact information to know which of its offices to contact should an audit or review of financial records be warranted.
All three PACs the Grand Strand Statewide PAC, formed in 2006; the Myrtle Beach Lodging PAC, formed in 2006; and the Grand Strand Restaurant PAC, formed in 2009 list the same post office box address on their tax returns.
Slough, in his e-mail, said the PACs have listed their new physical addresses with the S.C. Secretary of State. However, the restaurant PAC is the only PAC registered with that state agency, according to the agencys online database, which is updated each weekday. The address listed for the restaurant PAC on the state agencys site is for the PACs registered agent, which is a corporate services firm in Columbia.
Secretary of State records show the registered agents address was changed in 2010, but the restaurant PAC still listed the chambers telephone number on its tax return in 2011.
Billy Huggins, chairman of the restaurant PAC, said he did not know why the chambers telephone number appears on that organizations tax returns.
I have no idea why that phone number would be on there, Huggins said, adding that the organizations financial records are kept at its accountants office.
Steve Chapman, chairman of the lodging PAC, did not respond to a request for comments.
Wooten is president of the Grand Strand Statewide PAC.
David Dekleva a certified public accountant with Smith Sapp Bookhout Crumpler & Calliham, and the person who prepared the PACs tax returns did not respond to a request for comments.
The most recent tax returns for the 2011 calendar year are not the first documents on which the chambers telephone number has been listed as the contact point for the PACs financial information.
The PACs have listed the chambers telephone number on tax returns every year since their formation and all of the PACs previously listed the chambers 1200 N. Oak St. address in Myrtle Beach as the location for their financial records. The PACs started using the same post office box beginning in 2010, the year in which political donations tied to the chamber came under heavy scrutiny.
Wootens article in the chamber newsletter was a rebuttal of a news story published by The Sun News last month that detailed connections between the chamber, the business alliance and the political action committees.
While reporting on these associations and their roles is a legitimate topic, The Sun News paints these associations as entities controlled or run by your chamber of commerce, Wooten stated in the newsletter article. This is simply not accurate.
However, Wooten during a chamber membership meeting in December called the business alliance the lobbying arm for the chamber.
Dean, in a 2010 e-mail to The Sun News, said the chamber gives about $250,000 per year in private money to the alliance formerly the Grand Strand Business Association to pay for two lobbyists that handle advocacy services at the state and federal level.
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 during the December meeting. 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?
Wooten added: There are rules, regulations and laws which the chamber must follow. The chamber cannot lobby. If they do, then they go to a different [nonprofit] designation. . . . The business association handles that for the chamber.
The PACs are supported in part 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.
PACs are tax-exempt organizations under Section 527 of the U.S. tax code. There are no restrictions on how much money PACs can raise or spend and there is little oversight of the groups as long as they fulfill their mandatory tax-exempt purpose of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to public office, according to the IRS.
PACs are required to disclose their activities to the Federal Election Commission, but that agency has no oversight of a PACs tax return. The S.C. Ethics Commission currently has no oversight of PACs but candidates who receive money from PACs must disclose those contributions.
Contact DAVID WREN at 626-0281.