Lawyers for former Myrtle Beach Area Chamber of Commerce employee Karon Mitchell have responded to chamber's request to strike the word "crony" and "crony companies" out of a lawsuit filed in early April, arguing that the words are not derogatory.
The lawsuit accuses the chamber of paying “crony companies” more than $30 million in tax money over the last three years without competitive bidding.
The suit argues the chamber directed money to eight businesses started by current or former employees. Those businesses received money for “unsubstantiated goods” and marked-up service prices, the lawsuit alleges.
The tax money allegedly came from the controversial tourism development fee and accommodations tax.
On April 13, lawyers for the MBACC sent a request to the courts stating, using the term crony "is a blatant attempt to cast the Plaintiff and various private persons and companies in a prejudicial and negative light, bordering on slander."
The request also states that the use of the word "crony" is "impertinent, improper and scandalous."
Now, lawyers for Mitchell have responded, stating, "According to Merriam-Webster, the definition of 'crony' is 'a close friend, especially of long standing.' "
The response included two dictionaries definitions of the word "crony" as well as a thesaurus search, which showed words like "chum," "pal" and "friend" as words similar to "crony."
''The term simply does not mean what Defendant claims, and it certainly is not scandalous under any interpretation of the word," lawyers from Player Law Firm write.
The response continues, citing a section in the original lawsuit titled "Illegal Activities."
In this section, Mitchell alleges that the chamber did not adopt a bidding process since the adoption of the tourism development fee, the City of Myrtle Beach and Horry County did not review reports provided by the chamber and that the reports provided did not specify exactly where the money was being spent, to name a few.
The response states, "Yet, the only claim of scandalous language is the use of the word 'crony,' and that term is never used to describe MBACC."
The press conference
On April 10, members of the chamber held a press conference to respond the Mitchell's lawsuit.
At the conference, members spoke directly about each of the eight companies included in the suit, explaining their relationship to the chamber and how the chamber chose to hire those companies.
"In its rush to control the narrative, MBACC conducted a media blitz in the last two weeks to attack Plaintiff and provide a wealth of unsolicited information through local media outlets," the response states. "Rather than discredit Plaintiff's allegations, MBACC has bolstered her claims."
During the conference, the response states that speakers confirmed that all but one of the companies were run by former chamber employees.
"There were statements made during that conference, and in a really snazzy video MBACC put on Facebook, that MBACC used requests for proposals, requests for qualification, and a competitive bidding process for the tax funds received from the City and County."
The response then cites an article written by Charles Perry for My Horry News, and tackles three of the accused companies, Right Analytics, LLC, Com-Connect and Visibility and Conversions, LLC. In the article, outgoing chamber CEO Brad Dean allegedly contradicts statements made by the chamber on April 10, the response states.
Right Analytics, LLC
In the article, Dean states the company Right Analytics, LLC was "conceived and promoted by MBACC itself," the response reads.
According to Mitchell's lawyers, in his quote Dean suggests the chamber searched for two years to fill the business intelligence officer position. The owner of the the company, Jim Wright, was leaving the chamber, so they opened the conversation of hiring Wright's company, Dean said.
"No requests for proposals, no requests for qualifications, no bidding process," the response states. "And what, you may ask, is this unique esoteric field of such specific skills and experience that MBACC could not locate a single candidate during a two year search? 'Research' is the only description we are given in Defendant's 'Transparency Report.' "
Another quote by Dean to My Horry News suggests that the owner of Com-Connect, Nevely Graham, allegedly started her company while she was still employed by the chamber, the response states.
The article reads, "Graham had worked for the chamber for two decades when she realized her job was being phased out. He [Dean] said she created her own firm, and, after her employment ended, bid on a contract against four other companies."
However, during the press conference, chamber employees stated, "at no time did this individual work as an employee of the Chamber and operate a business contracting with the Chamber."
The response suggests that the "phasing out" of Graham's position as visitor services manager, a position that "is essential to a marketing program," goes against a statute that the chamber "has sufficient resources to create, plan, implement, and measure the marketing program generated by the fee revenues."
Lawyers for Mitchell continued, stating, "The fact that the for-profit company is owned and operated by a former employee that did that exact job while employed by MBACC is not only suspicious, it is highly unethical."
Visibility and Conversions, LLC
During the press conference, chamber members explained that Visibility and Conversions, LLC, formed by former chamber employee William Rosenthal, received most of the money, the response reads.
According to the response, the money was used for placing ads on Google and Facebook.
However, Mitchell's lawyers state that in the Transparency Report for the first quarter of 2018, the company was paid over $3 million from TDF and a-tax funds. Another $30 million was paid to Google and Facebook directly, the response reads.
"Is this a case of double billing?" the response questions. "An accounting mistake? The reports provide no explanation and the contradictory statements of the MBACC demand further investigation [to] further substantiate the allegations of wrongdoing made by Plaintiff."
The response ends by stating that if the chamber or any of the eight companies submit documented proof that a "Crony Company was not considered for contract within one year of the last date the associated individual worked for, acted as an agent for, or received compensation from MBACC, the reference as Crony Company will be removed from the Amended Complaint."
Mitchell's lawyers also suggests that "additional allegations" have caused Mitchell to amend her complaint after the chamber released statutorily required information.
"If it walks like a crony and it talks like a crony, then it probably is a crony," the response states.