Here’s what happened during the alleged extortion attempt that’s rocking Horry County

‘A sad day for Horry County’: Council special meeting ends with no decisions made

A special meeting was called to discuss Horry County Administrator Chris Eldridge’s employment. That meeting ended with no executive session and no decision was made during the 20 minute meeting.
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A special meeting was called to discuss Horry County Administrator Chris Eldridge’s employment. That meeting ended with no executive session and no decision was made during the 20 minute meeting.

When Sandy Davis took her job as director of the Myrtle Beach Regional Economic Development Corporation, she said she didn’t want to deal with the politics. Over the last few months, she has found herself at the center of a political fiasco after one recorded dinner.

She and employee Sherri Steele met with Horry County Chair Johnny Gardner and associate Luke Barefoot on Nov. 30. The recorded conversation launched an investigation lasting three months.

Their recorded exchange became the center of an alleged extortion attempt investigated by SLED at the request of Horry County Administrator Chris Eldridge. On Tuesday at 3:30 p.m., Horry County Council is hosting a special meeting to determine Eldridge’s job now that the SLED report is out. The result could be the end of the county administrator’s employment.

The Sun News acquired a copy of the entire dinner conversation recording, which happened at the Rivertown Bistro. Davis said the conversation was recorded because Steele was going to use it for notes in case Gardner asked for more information on a topic.

Barefoot and Davis did most of the talking, which centered around public misconceptions of the MBREDC and the work it does.

Barefoot said he attended the meeting after Davis was having a hard time reaching Gardner. She asked if Barefoot would organize a meeting.

Last week, SLED said there was no evidence of force during the conversation. Much of the dinner conversation was jovial with personal stories being shared, both before and after the section Eldridge alleged sounded like extortion.

In the SLED report, Gardner said he was not engaged during the conversation and did not remember many of the specifics.

‘Extortion attempt’

When Eldridge reported the issue to SLED, he had only heard a few minutes of the hour-long tape. His concern, according to the SLED report, was that Barefoot and Gardner were trying to funnel money to political consultant and media company owner Donald Smith.

Barefoot can be heard in the recording saying he had a proposal from Smith to do work for the MBREDC, for a “five” number they talked about before. Part of the proposal would be to do advertising during the Beach Ball Classic, a winter basketball tournament directed by former Myrtle Beach Mayor John Rhodes.

“If I were y’all, I would meet with (Smith) and think about retaining him for political cover to protect your funding,” Barefoot said. “If you can, I think it would be a good fit, and again, I call it political cover.”

Davis said in the recording she would be willing to meet with Smith, as long as they followed the bylaws of the MBRDEC and received approval from its governing board. The board is comprised of local political, educational and business leaders.

Gardner, Council Member Gary Loftus and Eldridge all serve on the board.

Smith could help get council members behind supporting the MBREDC, Barefoot said, given his clout amongst some of the members. Smith is not listed as a registered lobbyist on the South Carolina Ethic Commission website.

“I don’t think this, I know what I am about to tell you,” Barefoot said during the dinner. “I’ve worked with (Smith) enough behind the scenes, he is a man behind the curtain. He can work the hell out of council votes. I’m telling you.”

According to the South Carolina Ethics Commission, a lobbyist is “any person who is employed, appointed, or retained, with or without compensation, by another person to influence by direct communication with public officials or public employees.”

Barefoot said working the council is a common practice, one he’s also participated in. He defined “working council” as sitting down and talking with members and making the case for your organization.

“Working council is not a lobbyist, all kinds of people work council,” he said.

Davis said she never received a request to meet with Smith. She told The Sun News that she maintained from the beginning she was not extorted and claims to the contrary are insulting to her.

“I would know if I was being extorted,” she said.

Barefoot told The Sun News he believes Smith’s reputation was put in harm’s way due to the extortion allegations being leaked and discussed publicly, given Smith had no direct contact with Davis.

“I think he is in a very good position to sue the county,” Barefoot said.

‘Political Cover’

Barefoot started the conversation regarding Smith and Grand Strand Daily columnist Paul Gable by saying perception can become reality, and the importance of conveying what the EDC does to the public.

Smith and Barefoot worked for the Gardner campaign for county chairman. According to Gardner’s pre-election ethics filing to the State of South Carolina, the Gardner campaign paid Smith’s Lucky Dog Television $15,000.

In Gardner’s campaign platform on his website, it says in the transparency section: “Where does that money go and why can’t it be used for public safety needs, for example, rather than some pet project, economic development ($1.6 million) springs to mind, that really isn’t needed?”

Barefoot, who previously worked in economic development, said he never agreed with Gardner and Gable being critical of the EDC and the work it does. He said Davis and others had reached out to him asking for help improving their image.

“The whole conversation was what can you do for us,” Barefoot told The Sun News. “That’s how this whole thing started.”

During the conversation on Nov. 30, Barefoot and Gardner expressed support for the work of the MBREDC. Davis said she thinks as Gardner learned more about their work, he has seen the benefits of economic development.

“You don’t have a bigger supporter than Luke Barefoot,” Barefoot said to Davis in the recording.

Gable was brought up as an example of a critic of the MBREDC. In past columns, he has called the MBREDC “corporate welfare.” Barefoot said Smith had to “reign in” Gable when he was going to write something negative about the MBREDC on his blog.

“I had heard he was going to write something about me,” Davis said in response.

Barefoot said used Council Member Al Allen as an example. Barefoot said Allen sounded like Gable when critiquing the MBREDC in a 2018 meeting. Barefoot said Allen is a “good ally,” but he disagreed with him in this instance.

“That’s what really got my attention,” Barefoot said, adding the comments were concerning and show the political pressures the MBREDC could face due to public misinterpretations.

Davis, who Allen once appointed to Horry County Planning Commission, said that he and others have always been supportive of her organization and Allen paid his own way to attend trips with the MBREDC to bring companies to the area.

“He specifically sent me an email about ‘will you send me your calendars for the year on all the shows you’re attending and trips you’re going on, so I can see which ones I want to go on,’” Davis said in the recording.

Davis said council members going on these trips are helpful because her staff is small.

“They always offer to travel because they know I’m by myself,” she said. “And they’re out there promoting the county.”

Barefoot sad Allen is a very good politician, one he is impressed with. He was just shocked to hear Allen talking like Gable.

Davis said the best thing to change people’s perspective on her organization would be for them to see in-person all she is doing for the county.

The Funding

The “political cover” Barefoot spoke of was to pay Donald Smith to help improve the MBREDC’s image and win votes on the council. While Barefoot and Davis talked about how council members and the public need to learn more about what the MBREDC does, Davis said the county council has been supportive and has already extended their contract.

In July, the county council unanimously passed a resolution to enter a contract with MBREDC for three additional years. The resolution specifically says the county has funded the corporation for years and the MBREDC has shown results.

The MBREDC gets its funding from donors, fundraisers and money from the county. In the Fall Budget Retreat on Nov. 28, it was said the organization is becoming self-sufficient from a fee-in-lieu tax from new projects completed by the MBREDC and from rent income from county-owned properties.

Allen asked if the county stopped giving the MBREDC $1.1 million every year, would they be unable to operate. Horry County Finance Director Barry Spivey said they would be unable to continue. The fee-in-lieu set up by the county helps MBREDC successfully fund itself through bringing in new projects, but money from the county is still required for the operating budget.

The goal of the MBREDC is to bring in new business, jobs and economic development into the county in an effort to diversify the local economy beyond the tourism industry. Their funding must be approved by the council every year and is often a controversial topic.

Davis said in the recording she knows Allen and the council are trying to find new ways to fund public safety, but pulling the MBREDC funding is not the way to do it. She said the businesses and tax dollars brought in by the MBREDC will go a lot further in the long run to helping pay for public safety.

“Without the EDC … I promise you there won’t be any new jobs in Horry County, and the jobs we do bring in start out at $18 an hour,” she said in the recording. “Really, what is a million dollars going to do for public safety? It’s not going to pay their overtime, much less their salaries.”

The county makes money off MBREDC projects, including business license fees, an expanded tax base and sometimes rent money, Davis said.

It is her hope her organization can help bring in more money for public safety in the long term.

What’s next

This isn’t the first time Eldridge has faced termination.

Calls to fire Eldridge and Horry County Attorney Arrigo Carotti came well before SLED completed its investigations. On Jan. 4, there was a meeting to try to suspend Eldridge, but no votes were taken.

At that meeting, Eldridge said he was acting on the recommendation of council members when he reported the dinner conversation to SLED for further investigation. He said in a letter to the council that he wishes to continue working for Horry County.

“I have done nothing wrong to be punished in such a way,” he wrote. “Doing so damages my career and makes me a target of retaliation.”

It will take a majority vote of the 12 County Council members to terminate Eldridge’s positions.

If Eldridge’s employment contract with the county is terminated, the county owes him six months of his salary. In July, a FOIA request showed the county administrator was paid $211,262 a year.

He can request this in a lump sum or paid on a bi-weekly basis. In addition, he will be provided with health insurance.

Development and Horry County reporter Tyler Fleming joined The Sun News in May of 2018. He covers other stuff too, like reporting on beer, bears, breaking news and Coastal Carolina University. He graduated from The University of North Carolina at Chapel Hill in 2018 and was the 2017-18 editor-in-chief of The Daily Tar Heel. He has won (and lost) several college journalism awards.