Should the Hilton Head chamber tell how it spends its money? Legal battle goes before SC Supreme Court.

Years of legal battling were distilled into little more than a half-hour Thursday morning as the S.C. Supreme Court heard oral arguments in a case that hinges on whether the Hilton Head Island-Bluffton Chamber of Commerce must comply with the state’s open records law and release more documentation about how it spends its money.

The lawsuit, initially filed in 2013 by staunch chamber critic and Windmill Harbor businessman Skip Hoagland, argues that because the chamber receives public funding from the towns of Hilton Head Island and Bluffton, and Beaufort County, the chamber ought to be subject to the S.C. Freedom of Information Act.

The chamber, a private nonprofit organization, disagrees.

In February, 12th Circuit Court Judge Michael Nettles, of Florence, ruled in favor of Hoagland and his company DomainsNewsMedia.com, LLC. The chamber then appealed to the state’s highest court.

Lawyers for both parties made their cases before the state’s highest court, a five-justice board, Thursday morning in Columbia.

Taylor Smith, who represents Hoagland, said the chamber “meets the definition for what a public body is” because it receives millions of dollars annually in accommodations tax revenue — money collected by counties and municipalities on overnight lodging stays.

The chamber is a designated marketing organization for the two municipalities and the county.

Tina Cundari, an attorney who represents the chamber, said the group provides tourism marketing services for local governments on an “arm’s-length basis,” meaning that while the organization works with governments, it isn’t a part of those public bodies.

There are checks on “how this money is being spent” that are already in place, such as annual budgets and spending reports, she said. “...There are many levels of oversight already.”

Cundari suggested Hoagland isn’t merely attempting to ensure large, expensive projects are executed efficiently and effectively, but is seeking accounting “of every paper clip.”

Justice John Few said he didn’t “want to get hung up on paper clips,” but questioned whether the chamber’s reporting requirements are sufficient enough to provide the public with specific information on chamber spending.

Justice John Kittredge wondered how deeply into chamber business the public would be able to probe should the organization be subject to open records laws.

He asked, “Does that mean the chamber must give (public) notice of its meetings” and meet similar requirements placed on public bodies such as city councils?

Smith replied in the affirmative.

Another issue justices appeared to wrestle with was the dual role chambers play — one on hand they serve as tourism marketing organizations, and on the other, they act as lobbyist for their members.

“The chamber’s political (and lobbying) activities become public” if they were to be subject to the open records law, which could lead to “all sorts of ... problems,” Few said.

Chief Justice Donald Beatty questioned whether applying the state’s Freedom of Information Act to the chamber would allow critics like Hoagland to “put tentacles in all different portions of the chamber.”

Smith — who said the chamber intentional operates in this “hybrid format” — argued that the chamber actively sought its status as a designated marketing organization for Hilton Head Island, Bluffton, and Beaufort County, and reiterated that the group should be treated as public body.

Cundari said, “It would not be a wise decision … to convert (organizations such as the chamber) into public bodies” because it could open chamber members —private companies — to abnormal public scrutiny.

Theoretically, the chamber could isolate its marketing efforts from its lobbying efforts, but Few said there is nothing in current state law that establishes how such an organization would operate.

It could take months for the justices to issue a ruling in the case, but after Thursday’s hearing Hoagland said he was confident they would affirm the lower court’s decision.

“I think we are going to win this case,” he said.

“I think it’s a pretty clear argument: if you use public money, you should be transparent about it,” Hoagland said. “If there’s a lack of transparency you have to wonder if there’s something to hide.”

This story was originally published October 19, 2017 at 1:38 PM with the headline "Should the Hilton Head chamber tell how it spends its money? Legal battle goes before SC Supreme Court.."