Editorials

Court majority misses point on chambers of commerce, taxpayers’ dollars

By Myrtle Beach Sun News Editorial Board

Throughout the separate but equal branches of American governance, full transparency typically is a value more in policy than in practice. For every legislator, executive or jurist who may truly support open government and public access to information, many others — including bureaucrats that prefer no public scrutiny — work against transparency.

In a disappointing ruling about how chambers of commerce report their spending of $60 million in accommodations tax dollars, the South Carolina Supreme Court said the Freedom of Information Act does not apply to chambers of commerce, even when acting as a municipality’s marketing organization. The Supreme Court said the Hilton Head Island-Bluffton Chamber of Commerce is not a public body and thereby not subject to the FOIA. That chamber spent $1.8 million in A-tax money in fiscal year 2017, in the same arrangement that the Myrtle Beach Area Chamber of Commerce spent $2.6 million.

The 4-1 majority opinion, by Associate Justice John Kittredge, states: “While the Chamber technically expends public funds, we are firmly persuaded that the General Assembly did not intend the Chamber to be considered a public body for FOIA purposes based upon its receipt and expenditure of accommodation tax funds.”

Associate Justice John Cannon Few dissented from the majority: “By placing the responsibility for the expenditure of public funds in the hands of a private entity such as the Chamber, and then relying on public officials for ‘oversight,’ with no right of access by the public, the accommodations tax statute actually inhibits citizens from being ‘advised of the performance of public officials and of the decisions that are reached in a public activity,’ thereby frustrating — not furthering — the ‘vital’ policy of open government.”

The ruling was in a 2013 case. DomainsNewMedia.com, a company owned by Skip Hoagland, sought information from the Hilton Head chamber, which refused the request claiming it was not a public body subject to the FOIA. Interestingly, Circuit Court Judge Michael Nettles ruled in favor of DomainsNewMedia in February 2016. The Hilton Head Chamber was allowed to bypass the Court of Appeals and go directly to the S.C. Supreme Court.

The MBACC joined the Hilton Head Chamber in hailing the Supreme Court ruling and claiming it affirms “strong oversight” is in place and A-tax dollars are spent effectively and so forth. Making chambers subject to the FOIA would cause harm through “regulatory redundancy, additional legal red tape, and the potential emergence of issues that could erode the individual privacy of employees,” the Hilton Head Chamber said in a statement.

MBACC chairwoman Carla Schuessler alluded to online reports on chamber expenditure of A-tax and Tourism Development Fee revenues. The problem is that the reports are quite broad in describing how money is spent with limited information on providers of services. Without more details, which the FOIA could provide, taxpayers really don’t have full information about how their money is spent.

Schuessler and other Chamber officials should explain the “strong oversight” they claim is provided. Oversight by whom and of what? Transparency of public funds should mean complete and timely reports, open to any taxpayer, on a chamber or any other private entity’s handling of public money.

The court’s majority missed an opportunity to uphold transparency. The General Assembly should make state law clear that in reporting on spending of public money, private entities are indeed subject to the FOIA. Area legislators should put this on their agenda for the next session.

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