Politics & Government

Bluffton rep behind bill that would shield chamber’s use of public money from FOIA

Rep. Herbkersman
Rep. Herbkersman SC State House

A local state representative has introduced a bill that would, in effect, end a long running court battle about whether the Hilton Head Island-Bluffton Chamber of Commerce and other chambers across the state would have to disclose how they spend public money.

Introduced by Republican Rep. Bill Herbkersman, who represents Beaufort and Jasper Counties, the bill would require any nonprofit receiving more than $100 in public funds to submit a quarterly expenditure report to the government institution that awarded the money. That report would include the “general purposes” the funds were used for and “any other information required by the jurisdiction.”

But the amount of detail would be decided by the agency contributing the money.

The Hilton Head Island-Bluffton Chamber of Commerce is in the midst of a court fight on the issue that began in 2013. The chamber contends it is not subject to the state’s Freedom of Information Act and does not have to reveal the specifics of how it spends public money. The chamber lost the first first round of that fight in court in February 2016 and has appealed the 12th Circuit Court judge’s decision directly to the S.C. Supreme Court, which heard oral arguments in October, but has yet to issue a ruling.

But if bill H. 3931 passes, any court ruling would be moot.

“Millions of dollars would go into a black hole and never be heard of again,” said Bill Rogers, executive director of the S.C. Press Association. “It’s a terrible bill for openness in South Carolina.”

Rogers believes the bill is in response to the ongoing lawsuit against the Hilton Head Island-Bluffton Chamber of Commerce, filed by vocal critic Skip Hoagland.

Herbkersman on Monday called that notion “patently false.”

He said he introduced the bill because his subcommittee on local government deals with granting state funds, and he thinks there needs to be uniformity in how each organization reports how money is spent.

He said he has not spoken with the Hilton Head Island-Bluffton Chamber of Commerce regarding the filing of the bill.

In an email statement sent Monday afternoon, the Hilton Head Island-Bluffton Chamber of Commerce said it “strongly” believes in financial transparency and is already subject to “great oversight at both the local and state level.”

“We are able and willing to abide by the proposed bill’s quarterly expenditure reporting,” the statement from Charlie Clark, the chambers vice president of communications, said. “We assume the portion of the bill regarding FOIA requests is in place to avoid redundancy in reporting and frivolous FOIA requests that exceed the intent of the law.”

Throughout the court battle, the chamber has argued it is not a public body and therefore not required to follow the state’s public records statutes. Rather, it argued the chamber acts as a contractor by using public funding to attract tourists to the area as the designated marketing organization.

Herbkersman said his proposal would make the finances of nonprofits like the chamber more transparent than they are now.

“The FOIA is not being circumvented,” Herbkersman said.

Under Herbkersman’s bill, an individual who wanted information about how the chamber of commerce uses taxpayer dollars would have to request that information from the entities that granted the chamber public funds.

The Hilton Head Island-Bluffton Chamber receives money from the towns of Hilton Head Island and Bluffton and Beaufort County.

If the reports filed by these municipalities did not include the information the individual wanted, there would be no further recourse. The chamber, and other nonprofits, would not be required to fulfill any further requests about finances.

In 2015, Hilton Head Town Council narrowly approved the current contract with the Hilton Head Island-Bluffton Chamber of Commerce, to the dismay of Mayor David Bennett. Town Council did, however, add parameters to give town leaders more oversight of the $1.5 million the chamber received that year.

Since a majority of council currently support the chamber, Hilton Head might not set strict reporting guidelines for quarterly reports.

John Troyer, director of finance for the Town of Hilton Head, said for fiscal year 2017 the chamber received $1.8 million from the town. The number varies each year because the chamber receives 30 percent of State ATAX money, he said.

When questioned Monday about the possibility of only the minimum reports, Herbkersman said an amendment will be introduced to make the financial reports “as stringent as possible.”

He could not immediately provide details about how in-depth the financial reports would be under the potential amendment, but said it will be the strictest reporting guidelines required by the state. He said he would send the preliminary amendment to an Island Packet reporter Tuesday, when the legislative session opens.

According to Title 11 of the South Carolina Code of Laws, all entities receiving or asking for state money must report an estimated line item expenditure report before public funds are received.

A municipality’s Accommodations Tax Advisory Committee must submit a report to the South Carolina Accommodations Tax Oversight Committee annually detailing how funds are spent.

Regional tourism agencies — the Hilton Head chamber among them — must also submit annual reports on their budgets and annual expenditures of ATAX money, according to the S.C. law.

Herbkersman said if institutions don’t comply with quarterly reporting, they would stop receiving public funds under this bill.