Other Views

Guest opinion: Hilton Head still must 'trust but verify' chamber books: Hoagland

Skip Hoagland
Skip Hoagland Submitted photo

The Hilton Head Island-Bluffton Chamber of Commerce has recently stated publicly that it welcomes its first contract with the Town of Hilton Head Island.

As the town's designated marketing organization, the chamber has received tens of millions of accommodations tax dollars from the town over the past three-plus decades. The chamber also receives public funding from Bluffton, Beaufort County and the S.C. Department of Parks, Recreation and Tourism. From all of these sources, the chamber has received an estimated $60 million to $100 million collectively since its inception, always without a contract or outside investigative audits that would have ensured proper and lawful stewardship of these monies.

Because of public demand, a written agreement between the town and the chamber may soon be a reality. This action alone is not enough; there must also be an investigative audit, going back at least three to five years.

The chamber may say it welcomes a contract, but its actions show that it most certainly does not want an investigative audit. Why is this the case? This resistance conflicts with the chamber's published statements and braggadocio about its supposed accountability with state accommodations tax requirements.

Further, its refusal is in direct opposition to purported fawning statements by industry standard-bearers such as the Destination Marketing Association International and the U.S. Chamber of Commerce. The Hilton Head Island-Bluffton Chamber claims these organizations are simply gushing over its leadership and accountability.

Jay Wiendl, the chamber's chairman, did some gushing in a recent op-ed piece when he referred to the chamber's 24-member, blue-chip board composed of "CEOs, general managers, directors of marketing and small-business owners of some of the most recognized businesses on Hilton Head and in Bluffton. The board adheres to all requirements of the state's nonprofit act and to industry best practices for corporate governance."

Wiendl continued, "The board, which is the governing body under state law, has a standing finance committee that reviews financial statements and tax returns and meets with the external auditor and reviews and approves the annual audit."

If everything is just as tight as a tick, why do Wiendl and the rest of the chamber leadership continue to resist an investigative audit?

In truth, and in direct opposition to Wiendl's statements, this chamber has fought transparency, audits and even the disclosure of information legally requested by local residents, The Island Packet and the Town of Hilton Head Island under the Freedom of Information Act.

The chamber also embraces a costly and outdated model combining a chamber of commerce organization with a destination marketing organization. According to the Destination Marketing Association International, only 5 percent of all destination marketing organizations are still conjoined with a chamber of commerce. That stands to reason, as functions of chambers of commerce and of convention and visitors' bureaus are totally different.

Combining the two operations does not lend itself to more transparency, but rather hinders it through obfuscated lines of demarcation and the impression, real or imagined, of commingled fungible dollars. Ninety-five percent of all destination marketing entities can't be wrong, can they?

Wiendl also failed to say that this chamber generates significant revenue annually from the sale of advertising products. Sales of these products by this ever-expanding, tax-subsidized organization have been incredibly damaging to many of our local media companies.

During the year ending June 30, 2014, this nonprofit organization received about $3.4 million in accommodations tax funding from the Town of Hilton Head Island, Beaufort County and other state and regional entities. The chamber has about 25 employees who earn a total of more than $2 million per year. This chamber's president and CEO, Bill Miles, receives a compensation package of $350,000 annually.

Remember, Hilton Head attracts about 2.5 million visitors per year; yet, Miles' compensation ranks in the same league as the Washington, D.C., chamber head (18 million visitors per year) and Chicago's chamber president (38 million visitors per year).

The total annual spending of the Hilton Head Island-Bluffton chamber seems to not be directly correlated with the number of visitors, either. For example, when the chamber had total annual expenditures of $7.3 million, as it did in 2007, or $5.3 million, as it did in 2011, Hilton Head benefited from 2 million visitors and 2.3 million visitors, respectively (that is correct, more visitors when expenditures were $2 million less).

To Wiendl and Miles, we ask: Are residents really asking too much when they seek a multi-year, independent, full investigative audit? Don't they deserve to know how tens of millions in tax dollars were spent?

According to Wiendl, the chamber seeks to comply with the laws of South Carolina, and further, its board has high standards.

But many case histories exist where the same or higher standards were in place in chamber/DMO organizations across this country, yet in dozens of examples, millions of dollars were mismanaged, wasted or embezzled. Typical annual audits likely would never have found the problem. These discoveries came about only after an investigative audit was conducted.

If the chamber has nothing to hide, it must open its books and let the investigative audit commence.

To quote Ronald Reagan: "Trust but verify."

Hilton Head Island Town Council must do right by the community and require a multi-year investigative audit as a condition before a proposed contract with the chamber is executed and before one more dollar is funded to it. The people have spoken; let's hope the town is listening.

Related stories from Hilton Head Island Packet