Tuesday, Oct. 27, 2009

Lawyer warns BOOST: Back off

Business Owners Organized to Support Tourism have been put on notice.

An attorney for Myrtle Beach Area Chamber of Commerce board Chairman Brant Branham and Myrtle Beach lawyer Shep Guyton said he served a cease-and-desist order Friday against the group and spokesman Tom Herron to stop what the attorney calls scurrilous attacks on his clients for supporting candidates in the Nov.3 election.

BOOST President Robert Kelley said he received an e-mail from Karl S. "Butch" Bowers' Columbia law firm, and "it appears to be some kind of cease-and-desist notice." He said the e-mail indicates a paper copy of the request will be mailed to him. He said he has forwarded the message to his own attorney and won't take any action until he has consulted with his legal counsel.

Bowers, who represents Gov. Mark Sanford as well as Branham and Guyton, held a press conference Friday to address BOOST's and Herron's challenge to 24 $1,000 donations to local and state candidates.

"These attacks are irresponsible and, frankly, sad," Bowers said.

All four Myrtle Beach City Council incumbents received the 24 campaign contribution checks, all from LLCs - limited liability corporations - and individuals.

Herron and BOOST questioned whether the contributions were legal and say all campaign donations should be completely transparent, and that contributing through companies allows donors to hide.

But Bowers, who was appointed by then-president George W. Bush to be special council for voting matters for the U.S. Department of Justice and served as chairman of the S.C. State Election Commission for three years, said the contributions were "completely legal and entirely proper."

The LLCs are allowed to make contributions separate from individuals, and those contributions can be made by one LLC member without other members' approval or knowledge, he said.

That's what he said happened in at least one case.

Gene Miller, a member of the Creek View Land Partners LLC along with Mark Lazarus, a former Horry County councilman, also attended the press conference, and said he put money into the LLC's account with the intent of making political contributions. Lazarus, contacted earlier this week, said he had not known that the Creek View corporation had made $14,500 in campaign contributions until after news reports detailed the donations.

Guyton is the corporation's registered agent, as he is for many of the other LLC donors, and Miller said he was aware the checks would be issued to candidates he supports. Miller said he's part of more than one of the LLCs, but did not specify how many or which ones.

Miller did not take questions from reporters nor stay for the end of the press conference. Branham and Guyton were not present, Bowers said, because of scheduling conflicts.

Herron and BOOST posted a report onDiscoverMyrtleBeach.com last week alleging the money was actually funneled through the LLCs, some of which it claims are shell corporations, by the chamber of commerce as payback to the Myrtle Beach incumbents, who supported the 1percent tourism development tax implemented this summer.

"There were no public funds used in the contributions," Bowers said. "These are each legitimate business entities, not shells as falsely alleged."

He said he confirmed the question of public funds with the chamber's auditor, and that most of the LLCs had existed for about three years. Bowers also there has been no evidence presented by anyone to support the allegation of a quid pro quo between the incumbents and the chamber.

The Myrtle Beach incumbents - Mayor John Rhodes, Councilman Randal Wallace, Councilman Wayne Gray and Councilman Chuck Martino - received donations of $1,000 each from the same 24 companies.

Campaign finance reports filed with the S.C. Ethics Commission show the corporations have been involved in local politics beyond the council election.

Each of the corporations and individuals also has given $1,000 checks to members of Horry County's legislative delegation and $3,500 checks to U.S. Rep. Gresham Barrett, R-District 3, who is running for S.C. governor. All told, contributions totaling $256,000 had been recorded through Oct.15.

Members of the legislative delegation who have reported receiving $1,000 checks from all or some of the 24 corporations and individuals include S.C. Reps. Thad Viers, Nelson Hardwick, George Hearn, Alan Clemmons, Tracy Edge and Liston Barfield and state Sen. Ray Cleary.

S.C. law caps campaign contributions by any one entity to $1,000 for local candidates and $3,500 for statewide candidates. However, there is nothing to stop an individual or group of individuals from using numerous established corporations to make multiple contributions, said Cathy Hazelwood, general counsel for the state ethics commission, last week.

The issue of using multiple corporations to funnel money to politicians has been an issue elsewhere in S.C. New York developer Howard Rich, for example, has used related corporations to give hundreds of thousands of dollars to politicians who support school choice initiatives.

Even though Guyton is listed as the registered agent for many of the corporations, the campaign contributions did not necessarily come from him because there could be numerous partners involved with each of the businesses. The S.C. Secretary of State's office, which regulates corporations, does not require those businesses to list all partners in public filings.

In addition, individuals who are not related to the corporations could have legally funneled campaign contributions through the businesses by giving the corporations money intended for political candidates.

That appears to be what happened in some instances, according to a statement issued by Branham last week.

He said he was fundraising - separate from the chamber - for candidates he believes in.

Critics of the incumbent candidates seized upon connections between the chamber of commerce and Branham - as well as Guyton, a former director of the chamber's board - to question whether any of the contributions were improper.

The way the allegations have been phrased, as rhetorical questions, Bowers said, is "just a cute attempt to escape liability." Staff writer David Wren contributed to this report.