The South Carolina Supreme Court is considering making local Chambers of Commerce, including the Myrtle Beach Area Chamber of Commerce, subject to the Freedom of Information Act as it hears a lawsuit against the Hilton Head Island-Bluffton Chamber of Commerce.
One question the justices will consider is how deeply the public will be able to see into chamber business. FOIA allows the public to request detailed information from government bodies, including emails, financial records and anything else related to government business.
“We think it’s a hugely important case because of the amount of tax dollars that are being spent by these chambers,” Bill Rogers, S.C. Press Association executive director, said. “If they’re supported in spending public funds, they’re subject to FOIA, so why should they not be? It’s a matter of public trust and oversight.”
However, in 2016, the Myrtle Beach chamber gave its perspective on the case through a court filing to weigh in on the decision and encourage the court to take a broader look at how a ruling would not only affect chamber’s across the state, but also non-profits, Brad Dean, president of the Myrtle Beach Area Chamber of Commerce, said.
“It wasn’t to take sides but to offer perspective,” Dean said of the suit that was originally filed in 2013. “We’re not opposed at all to the transparency of public funds, but how far does that go?”
In February, 12th Circuit Court Judge Michael Nettles, of Florence, ruled in favor of Skip Hoagland and his business DomainsNewsMedia.com. Now, the Hilton Head Island-Bluffton Chamber is Commerce is appealing the case to the South Carolina Supreme Court.
Currently, the Myrtle Beach chamber receives money from the 1-percent tourism development fee as well as funds from the accommodations tax, or A-tax. The chamber said that this tax money is used for promoting and advertising Myrtle Beach.
“I think this case has extreme importance to Myrtle Beach where so many tax dollars are spent by the chamber there,” Rogers said. “Myrtle Beach and Hilton Head are probably the two areas it’ll impact the most.”
How is Myrtle Beach involved in the lawsuit?
David Slough, an attorney with Nexon Pruet representing the Myrtle Beach Chamber, said, “We are not a direct party in that action. When there was an appeal filed we filed an amicus brief with the court. The Myrtle Beach Chamber did not agree with the ruling of the lower court.”
The brief argues that the court wrongly identified the Hilton Head chamber as a public entity, and that the chamber of commerce should not be considered a government entity.
“The chamber does not exist exclusively, or even primarily, for the benefit of the local governments,” the brief states. “Rather, the chamber’s mission is to advance the common interests of its 2,700 members through various activities.”
Dean said that the Myrtle Beach chamber provides a listing of expenses of funds online.
“Our operations are a little bit different than the Hilton Head Chamber,” Slough said. “By statute, it allows for a budget that has to be prepared for each year and then at the end of the year there has to be a final accountability. The chamber does this and they take it and post it online. I don’t believe the Hilton Head Chamber does that.”
Slough said the spending records from each chamber must be submitted to the local government, which is subject to FOIA.
“How far will this go in terms of the private sector?” Dean asked.
However, the respondent replied to the brief submitted by the Myrtle Beach chamber, stating, “Contrary to the position of the Myrtle Beach Chamber, the public does not have ample access to information of Appellant regarding how the public funds it receives are, in fact, spent.”
The response continues, “‘When a block of public funds is diverted en masse from a public body to a related organization, or when the related organization undertakes the management of the expenditure of public funds’ the organization is a public body for FOIA purposes.”
Overall, the plaintiff argued the original decision was correct and that the Myrtle Beach chamber’s arguments “are paper tigers.”
Tina Cundari, an attorney representing the Hilton Head chamber stated, “It would not be a wise decision … to convert (organizations such as the chamber) into public bodies” because it would leave the private companies subject to “abnormal public scrutiny,” the (Hilton Head) Island Packet reported.
Hoagland stated, “I think it’s a pretty clear argument: If you use public money, you should be transparent about it. If there’s a lack of transparency you have to wonder if there’s something to hide.”
The court could take six to eight months to reach a conclusion, Slough said.