The FBI and the Internal Revenue Service have launched criminal investigations into $239,500 worth of campaign contributions given last year to political action committees and area politicians, including former gubernatorial candidate Gresham Barrett and members of the Myrtle Beach City Council.
The FBI and the IRS want to know where the money came from and why the donations were made in the form of cashier’s checks purchased at Myrtle Beach-based South Atlantic Bank.
The contributions purportedly were given by 14 corporations with ties to the Myrtle Beach Area Chamber of Commerce.
However, some of those corporations had no money when the donations were made, according to court documents and interviews by The Sun News. One of the corporations had been dissolved for nearly two years for failing to pay its taxes when the donations were made.
Denise Taiste, spokeswoman for the FBI, said she can neither confirm nor deny any active investigation. The IRS office in Myrtle Beach did not return a telephone message left by The Sun News.
However, the federal agencies have interviewed at least two people since the investigation started.
State Rep. Tracy Edge, R-North Myrtle Beach, said he met with investigators on July 7. He said the investigation appears to focus on possible money laundering, criminal conspiracy and tax fraud.
Edge, the only politician who refused to accept the cashier’s checks, said he gave the money back because no one would tell him the source of the funds.
Investigators also have interviewed Tom Herron, the spokesman for a local business group that has been critical of the campaign donations. Herron declined to discuss specifics of that meeting.
Herron’s group -- Business Owners Organized to Support Tourism -- has questioned whether the donations were payback for politicians who last year pushed through a 1 percent sales tax increase that goes toward the chamber’s marketing programs.
Myrtle Beach lawyer Shep Guyton, a former chairman of the chamber’s board of directors, is the registered agent for all of the corporations that made campaign donations with cashier’s checks.
Guyton, who also is a board member at South Atlantic Bank, has not responded to requests for interviews.
Wayne Wicker, the bank’s chief executive officer, did not respond to a request for comments.
Edge said the FBI and the IRS indicated that they were going to obtain bank records to see if any wrongdoing occurred.
The federal Bank Secrecy Act requires financial institutions to keep records of and report to the IRS and others all cash purchases of cashier’s checks totaling $10,000 or more in a day.
The cashier’s checks used for campaign donations all have the same date -- June 8, 2009 -- and they are in sequential order.
Banks also are supposed to file a suspicious activity report if money laundering or any other criminal act is suspected.
It is not clear whether South Atlantic Bank reported the purchase of those checks to the federal government.
U.S. Rep. Barrett, R-3rd District -- who lost the gubernatorial bid to Nikki Haley in last month’s primary election -- received $49,000 in cashier’s checks from Guyton’s corporations.
Those checks were among campaign donations that Brad Dean, the president of the chamber of commerce, delivered to Barrett during a lunch meeting last summer. Mark Kelley, the chamber’s lobbyist, also attended that meeting.
Dean did not return telephone calls to The Sun News on Wednesday.
Although Dean has repeatedly stated that the chamber was not involved in raising money for political candidates, he told The Sun News in May that the chamber acted as a clearinghouse for contributions.
Local business owners often sent campaign donations to the chamber’s headquarters, Dean said, because they knew current and past chamber board members were raising money for candidates. Chamber officials then would disburse the money.
“This was not the chamber of commerce raising money,” Dean told The Sun News in May. “There was no public money or chamber money involved.”
Brant Branham, the chamber’s board chairman when the donations were made, has said for months that there is no tie between the chamber and the campaign contributions. Branham has said he helped raise the money on his own from “like-minded businessmen and women.”
Branham did not return a telephone call to The Sun News on Wednesday.
Incumbent candidates for the City Council, including Mayor John Rhodes, also received cashier’s checks from Guyton’s corporations, according to filings with the state’s Ethics Commission.
Rhodes said neither the FBI nor the IRS have asked to meet with him.
“If anybody wants to talk to me, I welcome that,” Rhodes said. “I’ll talk to them all day if they want.”
Edge and other members of Horry County’s legislative delegation also received cashier’s checks.
All of those politicians, with the exception of Edge, have said they do not believe the contributions violate any laws. Edge said he is not sure whether any laws were violated.
“The donations were very legal,” City Councilman Wayne Gray told The Sun News last month.
Herb Hayden, executive director of the Ethics Commission, has said the donations do not appear to have violated state election laws, even though their source is difficult to trace because of the cashier’s checks.
Hayden did not return a telephone call to The Sun News on Wednesday.
Edge, however, said he was suspicious of the donations and held onto them until December, when Guyton demanded their return.
“He was adamant about wanting them back,” Edge said.
Each of the 14 corporations issued cashier’s checks of $1,000 to council candidates and legislators and $3,500 to Barrett and the political action committees -- the maximum amount allowed under state law.
Robert Kelley, president of BOOST, has questioned how a group of corporations with little apparent financial backing could have raised so much money for candidates.
Mark Lazarus, a former Horry County councilman and a partner in one of Guyton’s corporation, told The Sun News last year that the corporation had no money to make political donations.
“I have no idea where the money came from and I absolutely did not approve of this,” Lazarus said.
The foreclosure of a beach house owned by another Guyton corporation is raising more questions about the source of campaign donations. The corporation failed to make its loan payments on the beach house yet donated $20,500 to candidates and political action committees.
“We may never know whether what took place was sloppy, stupid or arrogant,” Robert Kelley said during a May news conference in which BOOST called for the chamber to disclose its financial records. “My guess is it’s a lot of each.”
Chamber officials and politicians say there is no link between the donations and the 1 percent sales tax increase that was approved last year. That tax, which went into effect Aug. 1, was tacked onto the city’s sales tax. It is expected to generate up to $18 million a year for the chamber’s marketing programs.