SC Supreme Court rules: You can't ask Hilton Head Chamber how it spends tax dollars

A battle that has been waged for five years came to an apparent close Wednesday morning when the South Carolina Supreme Court ruled the Hilton Head Island-Bluffton Chamber of Commerce is not a public body and is not subject to the Freedom of Information Act.

That means the public has no right to ask the chamber how it spends tax dollars.

The court issued the opinion Wednesday morning on a case filed in 2013 against the local Chamber by DomainsNewMedia.com, a company owned by local government critic Skip Hoagland.

Justice John Cannon Few issued a separate, dissenting opinion on the matter.

"We are disappointed," said Taylor Smith, attorney for Harrison, Radeker & Smith, who is representing Hoagland. "This represents a dark day for transparency in South Carolina. Presently, we are still digesting the opinion and evaluating our options moving forward."

The years-long case was prompted by a FOIA request sent to the Chamber in November 2012 from DomainsNewMedia asking for information on staff membership, policies, minutes and accounts, according to the Supreme Court's opinion. The chamber refused to fulfill the request because it said it was not a public body subject to FOIA.

The Chamber, a nonprofit, receives accommodations tax (ATAX) money as the town's designated marketing organization, and argued that information on the expenditure of those funds is available to the public through local and state government, the opinion said.

"Since laws and strong oversight to ensure ATAX dollars are spent effectively and legally already exist, we are pleased the Court recognizes the harm that would have resulted from regulatory redundancy, additional legal red tape, and the potential emergence of issues that could erode the individual privacy of employees," Charlie Clark, spokesperson for the Chamber, said in an emailed statement Wednesday afternoon.

"This ruling is an affirmation that chambers of commerce and nonprofits are not government entities and should not be treated as such," the statement continued. "The chamber recognizes the critical role of transparency and takes this responsibility and obligation very seriously."

Hoagland was unaware of the ruling when a reporter contacted him Wednesday morning.

"Oh my God, the corruption is worse than I ever imagined," Hoagland said.

In its decision-making, the Supreme Court considered whether the legislature intended that the chamber be a public body, according to the opinion.

"While the Chamber technically expends public funds, we are firmly persuaded that the General Assembly did not intend the Chamber to be considered a public body for FOIA purposes based upon its receipt and expenditure of accommodation tax funds," the opinion read.

Few, in his dissenting opinion, found that conclusion wrong.

"By placing the responsibility for the expenditure of public funds in the hands of a private entity such as the Chamber, and then relying on public officials for 'oversight,' with no right of access by the public, the accommodations tax statute actually inhibits citizens from being 'advised of the performance of public officials and of the decisions that are reached in a public activity,' thereby frustrating — not furthering — the 'vital' policy of open government."

Executive director of the South Carolina Press Association Bill Rogers called the ruling "disappointing."

"This means the public will not be privy to how $60 million in tax money is being spent," he said, referring to money allocated to chambers of commerce throughout the state. "This money is going down a rat hole never to be seen again."

John Troyer, director of finance for the Town of Hilton Head, said for fiscal year 2017 the Chamber received $1.8 million in ATAX money from the town.

In February 2016, the 12th Circuit Court Judge Michael Nettles ruled in favor of Hoagland and his company.

The Chamber fought that decision, and asked to bypass the Court of Appeals and take the case directly to the Supreme Court, which was granted.

The Supreme Court heard arguments in October 2017.

This story was originally published May 23, 2018 at 12:38 PM with the headline "SC Supreme Court rules: You can't ask Hilton Head Chamber how it spends tax dollars."