‘Divorce is an ugly thing’: Beaufort’s Black Chamber president, board square off in court
A judge is urging reconciliation, but warring sides of the Beaufort County Black Chamber of Commerce are digging in their heels.
The outcome of the legal tussle will determine the leadership of an organization that formed more than 20 years ago to empower Black-owned businesses using private and public funding.
Board members filed a lawsuit against Chamber President Director Larry Holman, accusing him of poor financial management and ignoring the board’s direction. They claim the organization’s tax-exempt status and millions of dollars in funding are at risk.
Holman, who has run the organization for 20 years, says there are no financial problems, and he is asking the court to dismiss the board’s claims.
Both sides were in Judge Marvin H. Dukes III’s courtroom Mondaybecause board members say Holman is in contempt of court for violating a previous order to provide tax documents and ignoring board directives.
The tax documents have since been turned over. At issue now is whether Holman is refusing to reduce his $126,000 salary, and still serving alcohol at a chamber cafe, without the proper licenses, against the board’s wishes. Board members also say they’ve told Holman to get approval for expenditures of more than $500.
Holman claims he has complied. And he’s added his own charge: Board members are trying to redefine his position, against the judge’s order.
Dukes encouraged a compromise.
The Black Chamber is a “wonderful organization,” Dukes said, and needs to be protected. The parties, he added, should try to reach a resolution because the dispute is causing the organization to lose funding. Whatever decision he makes, Dukes added, will only be appealed, dragging out the conflict.
“Is there some kind of middle ground which would let you all talk?” Dukes said.
Attorneys wanted to press on.
Steve Davis, an attorney for the board members, said compromise is only possible with compromising people, and added, “We want total separation. A divorce is an ugly thing.”
Holman’s attorney, Clifford Bush, called Davis and board Chairman Brenard McIntyre, also an attorney, “some of my heroes in the law field.” But he added that the members of the chamber should come together and nominate a new board to guide the organization.
“Remove Mr. Holman from the chamber?” Bush said. “Who’s going to run it?”
The case is too complicated to offer an immediate decision on whether Holman violated the order, Dukes said. More than 60 pieces of evidence have been filed.
Holman’s salary, other issues debated
Holman did not testify during the three-hour hearing, but Bush, his attorney, called on CPA Verna Harden-Baker, the Black Chamber’s Savannah-based bookkeeper for six years. Has there ever been any problems with the organization’s finances?
“No sir,” said Harden-Baker, who prepares tax statements and works with an auditor to prepare financial reports.
John Edward Brown, who audits the organization’s books, also said in an affidavit that he found no financial irregularities.
On cross-examination, Davis, the attorney for the board members, told bookkeeper Harden-Baker there was a $59,000 deficiency that made a 2017-18 audit incomplete. No secret accounts? He asked. “No,” Harden-Baker replied. Pressed, she said a secret account could exist if she did not see the statements.
Harden-Baker also was asked about Holman’s current $126,000 salary and whether it had ever been as high as $200,000. She said she could not recall. Davis said she should have anticipated the question.
Gary Littlejohn, the former owner of a tax preparation business, testified that he did find unusual transactions serving as the board’s treasurer. He’s not saying money is being stolen, he testified, but the chamber is not being run right organizationally. Holman’s $126,000 salary was never authorized by the board, which recently asked him to reduce it to $80,000.
Holman is an independent contractor, not an employee, which also is unusual for a not-for-profit, Littlejohn said, with Holman signing his own paychecks.
At one point while he was overseeing transactions, Littlejohn said, he inquired about $15,000 and $10,000 withdrawals but got no response. Those transactions may be legitimate, he said, but the board should know about withdrawals of that size, said Littlejohn, who supports a “forensic audit” of the chamber.
When Bush, Holman’s attorney, took over on cross-examination, he asked questions about board treasurer Littlejohn’s $1,000 monthly pay for serving as treasurer, whether he was a CPA (he isn’t) and how four members of the board, two shy of a required quorum, could vote to pay him. Littlejohn, Bush said at one point, just didn’t seem to find the bookkeeping to his liking. Holman also produced affidavits from others who worked at the chamber who said that they, too, were independent contractors and did not want to be employees.
Violating its own bylaws, Bush said the board held meetings without having enough members to do so, and also didn’t notify members of meetings, and yet here they are micromanaging Holman. A small chamber, he added, can’t afford the negative publicity.
“This is money they are losing because this board refuses to abide by its own bylaws,” Bush said.
A recent general meeting of the membership voted to remove the current board, he said.
Davis countered that board members, even if there were quorum issues, should be able to ask the judge for “injunctive relief” because of irreparable harm they say Holman is causing. There’s no way on God’s earth, Davis said, that Holman is in charge of the board.
“Mr. Holman is an employee,” Davis said. “He’s not an employer.”
Chamber founded 23 years ago
Founded in 1999, the chamber’s goal is to support minority-owned businesses and entrepreneurs in the area. The organization also offers housing and financial counseling and micro-loans to small businesses.
In November 2020, three members of the chamber’s board of directors — McIntyre, John McCoy and Leroy Gilliard — filed a lawsuit alleging Holman improperly fired them, appointed his own board — including his wife as chair — misused money and hid financial documents.
In December 2020, Dukes ordered Holman to dismantle his “improperly constituted” board of directors, reinstate the old board and provide board members with copies of the organization’s financial records.
The board has said previously that $2.6 million in potential funding, from public and private sources, for the chamber, is being held up because of the situation.
This story was originally published February 15, 2022 at 4:20 PM.
