Myrtle Beach chamber says lawsuit is ‘baseless, vindictive attack’

MYRTLE BEACH, SC (WBTW) – In a press conference Tuesday afternoon, the Myrtle Beach Area Chamber of Commerce vehemently denied allegations made in a lawsuit claiming taxpayer money was funneled to “crony companies” run by current or past chamber employees.

Chamber board chairperson Carla Schuessler addressed the lawsuit, filed by Karon Mitchell, as a “baseless, vindictive attack.” Schuessler said during the press conference that Mitchell was a former chamber member who is disgruntled over a fallen out and subsequent separation from the chamber.

“Ms. Mitchell is a disgruntled former member who didn’t pay her late fee for membership,” described Schuessler during her press conference remarks.

Mitchell, who attended the chamber’s press conference, denied the allegation that she brought about a lawsuit over unpaid late fees. Following the press conference, Mitchell spoke with News13 and said he ultimate goal is “transparency” from the chamber.

The lawsuit filed by Mitchell states that the Myrtle Beach Area Chamber of Commerce “has consistently redirected taxpayer funds” to Crony Companies. Court documents allege the Crony Companies receive taxpayer money for “unsubstantiated goods and services at a mark-up.”

Mitchell’s lawsuit goes on to say that a number of the companies to which the chamber gave money were chosen only because they had a connection to the chamber and not for any “research-based outcomes,” as is required by law, the suit claims.

The Local Option Tourism Development Fee Act requires 80% of the money generated by the one-percent sales tax to be used for out-of-market advertising. Myrtle Beach gives the money – 80% – to the Myrtle Beach Chamber of Commerce. The rest of the tax money pays for residential property tax relief and tourism-related capital projects.

The lawsuit claims that 46% of the total money spent through the TDF Funds, MB-A-Tax Funds, and HC-A-Tax Funds were paid to eight companies over the last three years. The lawsuit then identifies the companies.

News13 Investigates found a $23 million discrepancy in the lawsuit alleging the chamber sent millions of tax dollars to “crony companies.”

News13 used transparency reports posted on the chamber’s website. The documents show approximately $74 million of taxpayer money spent between 2015 and 2017.

The chamber’s data verifies much of the spending tied to the eight companies. The lawsuit’s claim for a company called Visibility and Conversions, however, didn’t match the chamber data.

Mitchell’s lawsuit said the company received $28 million — by far the biggest amount described in the lawsuit — over the last three years. News13’s database only showed $4.3 million of payments specifically to Visibility and Conversions.

However, the chamber appeared to not share vendor names for approximately $30 million of transactions paid for with taxpayer money, according to a News13 analysis of “transparency reports” published by the chamber.

Approximately $29 million of the generically-identified spending was tied to “internet advertising” and “digital advertising.” Where other transactions listed vendors, these transactions used terms like “display advertising,” “email marketing,” “mobile marketing,” “other digital marketing,” “search marketing,” “social media marketing,” “video advertising,” and “other.”

“Other” accounted for $95,509.29 of the chamber’s spending of taxpayer money.

Click here to see the total spending for each apparent generic term used instead of a vendor name.

“We reject the absurd, mean spirited attack that Ms. Mitchell has launched, and we’ll defend ourselves and those we represent,” said Schuessler in her closing remarks.

The chamber representatives did not take questions from the media, and upon concluding the press conference, Schuessler invited attendees to walk across the street and support Myrtle Beach City Council, which is set to have the second and final reading renewing the TDF tax for another decade. The chamber receives 80 percent of the TDF tax.

“You are welcome to join us as we go across the street and support the Myrtle Beach City Council when they make a historic vote extending the tourism development fee.”