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Lawsuit over Myrtle Beach area chamber paying ‘crony companies’ dismissed

Members of the Myrtle Beach Area Chamber of Commerce speak on lawsuit

The Myrtle Beach Area Chamber of Commerce held a press conference Tuesday afternoon regarding a lawsuit filed by Karon Mitchell against the chamber, Horry County and the City of Myrtle Beach.
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The Myrtle Beach Area Chamber of Commerce held a press conference Tuesday afternoon regarding a lawsuit filed by Karon Mitchell against the chamber, Horry County and the City of Myrtle Beach.

A lawsuit that alleged the Myrtle Beach Area Chamber of Commerce paid millions of dollars to “crony companies” has been dropped.

On Wednesday, court paperwork stated that Karon Mitchell — who filed the initial suit against the chamber and others more than a year ago — agreed to drop the lawsuit. The City of Myrtle Beach and the Chamber agreed to the dismissal.

A one-page court document does not indicate why the case was dropped.

The initial lawsuit argued the chamber directed money to businesses started by current or former employees, which the suit calls “crony companies.” Those businesses received money for “unsubstantiated goods” and marked-up service prices, the suit says.

“The dismissal of the lawsuit further testifies to our our position that the lawsuit filed by Karon Mitchell was baseless,” Karen Riordan, President and CEO of the Myrtle Beach Area Chamber of Commerce, told The Sun News. “The Myrtle Beach Area Chamber of Commerce adheres to all applicable laws and guidelines and meets all requirements for transparency and accountability related to the A-Tax and TDF laws.”

The suit alleged the chamber constantly redirected taxpayer money to businesses started by current and former employees.

According to the filing, Myrtle Beach Area Chamber of Commerce also provided no information in reports regarding the money’s allocation, only simply reporting the names of vendors as “search marketing,” “video advertising” and “email,” among other terms.

The distribution of tax money to the companies was without competitive bidding, the lawsuit contended. The companies in question also had “substantive advantage” through their insider information and influence with the chamber. That harmed other area business that could have competed for the services.

Eight companies received 46 percent of all tax expenditures from the TDF and accommodations funds, the filing argued.

Some of the money from the “crony companies” was redirected to political campaigns of politicians supported by the chamber, Mitchell’s lawsuit claimed.

The suit also alleged the chamber’s funneling of money is to avoid taxes for violating its tax-exempt status.

Mitchell did not respond for comment.

Sun News Reporter Anna Young contributed to this report.

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Alex Lang is the True Crime reporter for The Sun News covering the legal system and how crime impacts local residents. He says letting residents know if they are safe is a vital role of a newspaper. Alex has covered crime in Detroit, Iowa, New York City, West Virginia and now Horry County.


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