Pay Some Attention to Atlantic Beach

August 9, 2012 

It’s time for state leaders to stop ignoring Atlantic Beach.

Gov. Nikki Haley made a good start earlier this year, taking the initiative to force the floundering town to hold a new election after the one in November was suspiciously voided and then never rescheduled. But those election results are now once again held up in court. And as the election’s losers slowly make their way through multiple appeals, they continue to profit from lawsuits filed against the town they supposedly represent.

The state’s law seems clear enough: “A public official, public member, or public employee may not knowingly use his official office, membership, or employment to influence a government decision to obtain an economic interest for himself.”

And yet, as we detailed in March, Councilwoman Windy Price, Mayor Retha Pierce and Mayor Pro Tem Carolyn Cole have all had suits pending against the town. Price and her husband have received more than $50,000 in settlement cash since November. Pierce has pocketed at least $22,000. Lest you be tempted to write it off as not your problem, that money comes not from the Atlantic Beach budget but from a state insurance fund paid into by taxpayers across the state. Now it seems that Cole’s payday may be just around the corner.

The Town Council this week (or at least the lawsuit-loving trio who control it) directed the town’s manager to move ahead with negotiating a settlement to a long-running suit against the town by the Tyson Beach Group, a land-holding company in which Cole has a stake.

Like most things in Atlantic Beach, the larger story behind the suit is frustratingly complicated and plagued by rumors of impropriety, including accusations of forged documents, papers that disappeared when Cole was ousted as town manager and confusion over just who owns what. But to quickly sum up: The Tyson Beach Group suit stems from a 2002 loan that Cole, then town manager, finagled for the town from the company. The group that made the $190,000 loan was made up of Cole, her then-husband, and an elderly N.C. woman who actually put up the money. At the time, Cole said the personal loan was above board because she had no financial interest in the company.

Then in 2008, a few years after very narrowly winning an ethics case involving the transaction, Cole sued the town on behalf of Tyson Beach, asking for the principal back, plus interest. That amount is now reportedly around $400,000. Tied up in it all is Cole’s continuing divorce proceedings, in which she has argued that the stake in Tyson Beach Group and any money owed to the company is “a marital asset” she should share in.

Councilman Jake Evans, a long-time foe of Cole’s, pointed out on Thursday that after Cole was seated last year, her allies made her the only person on the council with the power to sign town checks. He alleges that once that policy was put in place she began refusing to sign checks for the town’s attorney at the time, Leah Moody, who was preparing a defense of the suit. Eventually, Evans said, Moody quit due to lack of payment, scuttling the prospects for a town victory in the suit and ensuring a settlement in Cole’s favor.

The settlement the council discussed this week would pay more than $8,000 a month for four years, Evans said, totaling more than $400,000. It’s not clear who might receive all that money. Most of the ownership of Tyson Beach Group still reportedly resides with the family of the N.C. woman who invested most of the money.

Neither Moody nor Cole returned phone calls on Thursday.

A few things are clear, however: Cole stands to gain if the suit is settled. And the entire practice of Atlantic Beach leaders profiting from suits against their own town is overdue for investigation by the State Ethics Commission and/or the state attorney general.

Herb Hayden, the executive director of the Ethics Commission, said Thursday that the rules are pretty plain.

“If they’re a party to the suit, then they would be prohibited from participating as a council member in any manner that would impact those suits.”

Criminal violators, he said, could be fined up to $5,000 and spend a year in prison.

So the question becomes whether Cole and others are using their position to influence the town manager and town attorney to settle suits in their favor. It’s worth noting that both the manager and the attorney have been changed multiple times by the current ruling council members, who removed the incumbents that had been fighting the suits.

To Evans, there’s no doubt that all of the stalling on election losses has been about getting these suits settled.

“It’s all a conspiracy; it’s all a conflict of interest. They’re just buying time.”

Cole, if she returned our phone calls, would likely say differently. And that murky gray area of he said, she said is where it will likely stay until those in higher offices get involved.

It’s time for the rumors and accusations to end, and for the facts to come out. If the Ethics Commission and the attorney general’s office are waiting for an invitation or a request to come in and investigate, consider this it. Let’s put this matter to rest.

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