Beaufort County temporarily cuts funding to Black Chamber due to lawsuit
When the Beaufort County Black Chamber of Commerce’s board sued its president last month, accusing him of misusing money and hiding financial documents, the lawsuit thrust into the limelight the 21-year-old agency that promotes economic empowerment of Black communities and small businesses.
All payments to the chamber coming from Beaufort County have been halted temporarily, according to an email obtained by The Island Packet and Beaufort Gazette. The county is among four local governments that over the years have provided the chamber with tens of thousands of dollars in accommodations tax money and grants.
The internal operations of the chamber are in disarray. The lawsuit and a letter from president and CEO Larry Holman indicate in-fighting, abrupt changes in the makeup of the board of directors and accusations that Holman has an iron grip on the agency’s finances.
Nepotism is a problem, board members say. Holman’s wife just recently became board chair, and his son oversees programs and events.
In the Black Chamber’s IRS Form 990 from 2018 (the most recent available online), Holman and his wife are listed as “individual trustee or director” and “officer” in the organization. However, in the same form, the organization answered “no” to the question: “Did any officer, director, trustee or key employee have a family relationship or business relationship with any officer, director, trustee or key employee?”
In a letter to chamber members, Holman says his wife’s involvement with the organization is “no secret.” He vehemently refutes the lawsuit’s allegations and says the suit is an attempt to ruin his reputation.
Chamber board members sue
The lawsuit, filed in Beaufort County on Nov. 18, alleges that Holman has refused to turn over tax records or hold meetings with the board since August, and by not allowing tax records to be reviewed, Holman is jeopardizing the tax-exempt status of the Beaufort organization.
According to the lawsuit, the Black Chamber’s board discovered discrepancies in the chamber’s finances in August and asked Holman for the chamber’s tax returns from 2017, 2018 and 2019, as well as 1099s and W-2s for those years.
The request for documents is routine by a nonprofit board, under the organization’s by-laws and state law, and the information should be readily available not only to the board but to chamber members, the lawsuit says.
Holman has refused numerous requests for the tax documents, the board alleges in the lawsuit, saying he doesn’t have to provide them and has evaluated the finances on his own with an accountant. The lawsuit says Holman improperly fired the board and appointed his own in violation of chamber by-laws.
The suit, filed by board members Bernard McIntyre, John McCoy and Leroy Gilliard, asks the court to require Holman to turn over requested financial and tax records, dismantle his board and recognize the elected board as the proper governing body, and not use chamber money to defend the lawsuit.
After The Island Packet and Beaufort Gazette reported on the lawsuit, interim County Administrator Greenway wrote to county leadership, advising them that due to the lawsuit, “which involved the possible mismanagement of funds,” he had asked the county to cease all payments to the organization until council members can discuss the issue at their next meeting on Dec. 14.
In response to the lawsuit, Holman wrote a scathing letter to chamber members, which was forwarded to Beaufort County government leaders, denying the claims and calling the suit “frivolous.” The two-page letter, dated Nov. 25, was sent Monday.
“My integrity means a lot to me,” he wrote, “and I will not allow anyone to tarnish it.”
Chamber leadership
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.
The chamber has five officers, according to its website — President and CEO Holman, VP of Business Lending Linda Jenkins, Office Manager Valeria Richardson, Director of Programs and Special Events Kevin Holman and Administrative Assistant Wilma Holman. The group’s board of directors, according to its website, has seven members — Bernard McIntyre, Leroy Gilliard, John McCoy, Edgar Williams, Marie Lewis, Kimberly Buckner and Shanequa Washington.
How much public money?
The Black Chamber, like other chambers of commerce, gets hundreds of thousands of dollars in public funds to make sure tourism, and the economy, thrive in Beaufort County.
In 2018, according to the chamber’s budget, the group received $215,000 in accommodations tax and South Carolina Department of Parks, Recreation and Tourism grants from Beaufort, Bluffton and Hilton Head Island.
Beaufort County gives the organization $50,000 in local accommodations tax money each year. In 2019, the county gave the group $48,000 in hospitality money for festival advertising.
Banking giant Wells Fargo gave the chamber a $500,000 grant in October as part of a program to help small businesses hurt by the coronavirus pandemic.
The county’s recent block on funding — which came the same day the newspapers reported on the lawsuit — happened just four days after the county’s finance committee agreed to provide the organization $32,000 in state accommodations tax money for marketing and events.
When a reporter asked Monday whether the county had cut the chamber’s funding, Holman said he didn’t “know anything about that” and abruptly ended the call.
Specific allegations
Among the board members’ complaints in the lawsuit:
▪ Holman mismanaged and misappropriated chamber money by paying himself an excessive salary without the board’s knowledge and approval, the lawsuit said. Holman was paid $127,000 as president and executive director in 2018, according to the most recent available Form 990 filed with the Internal Revenue Service. He earned $190,500 in 2017, $193,000 in 2016 and $96,000 in 2015, federal 990 forms show.
▪ The board unanimously rejected a 2018 audit and asked Holman to require an independent auditor to redo the organization’s 2018 tax return.
▪ Since late August, Holman has refused to attend virtual board meetings and said he is dismantling the board and appointing his own board, including his wife as chairperson, in violation of the chamber’s conflict-of-interest policy.
▪ Holman hired his son as a contractor to run programs and manage events, engaged in “nepotism and cronyism” and has overseen “massive” turnover among staff and contractors.
On Nov. 16, the county’s finance committee approved $32,000 in 2% state accommodations tax money to go to the chamber for marketing and events — well below the $135,000 the group had asked for.
Beaufort County Finance Director Hayes Williams confirmed Tuesday that Dick Farmer, chair of the state accommodations tax board, “wanted to hold the payment of the $32,000 until the legal issue is resolved.”
“I do not plan to issue payments to the BCBCOC until directed by [interim Administrator Greenway], [Chief Financial Officer Whitney Richland], the Finance Committee or the County Council,” Williams wrote.
‘Sad, sad day in Beaufort’
In a long-winded, blistering letter forwarded to Beaufort County Council members on Monday, Holman paints the board members who sued him as incompetent “obstructionists.” He also said he has not been served with the lawsuit.
The suit is publicly accessible online.
Holman described McIntyre as the former board chairman, and said he resigned from the board on Aug. 26 — the day that McIntyre argued with the board’s CPA about the chamber’s amortization schedule, or mortgage payment plan.
Holman described McIntyre as “whining” and “belligerent.”
Holman’s letter also said claims by board members that they were not aware of the organization’s finances are not correct.
“We don’t need negative people on our Board and especially those who don’t understand our mission,” the letter says. “It’s like the three of these ex-Board members spent 6-8 years on our Board and saying they never received any financials from our CPA or auditor which is a lie. However, they were okay with that until they rotated off the board?”
Holman said his CPA files Form 990 with the IRS and South Carolina, and the organization is audited every year.
“Bernard and Leroy, and John have seen these audits,” the letter says. “However, when you are being an obstructionist you tend to not see some things.”
Holman’s letter also defends his wife and son’s involvement with the organization. His wife, Wilma Holman, has served on the board for the past three years and has been a member for “20 plus years,” he said.
“I am in charge of hiring, firing, supervising, planning the budget, getting funding for the BCBCC and getting the right people in place so the BCBCC is successful,” the letter said. “This isn’t a function of the Board except to help get funding which didn’t happen.”
The letter states that Wilma Holman was voted as chairwoman after McIntyre’s resignation.
He says Kevin Holman, his son, “is doing an excellent job as the coordinator of programs and events.”
“It is unfortunate that Bernard nor Leroy understood the financials of the organization and became obstructionists and couldn’t understand a budget in order to pass one at a Board meeting,” the letter says.
Holman wrote that the chamber is “not required to make their audits public.” However, he says, the group “will accommodate any one who would like to see a copy.”
“It is a sad, sad day in Beaufort when ex-board members like Bernard, Leroy, and John use the BCBCC as a platform to file a frivolous lawsuit against me because of their incompetence with one supposedly being an attorney/magistrate,” the letter says.
This story was originally published December 2, 2020 at 4:40 AM.
