Coastal Kickback Scandal to Grand Jury

Coastal Kickback Scandal to Grand Jury

By Paul Gable

Numerous sources reported in the last 24 hours that presentation of the Coastal Kickback scandal case to a federal grand jury began Thursday.

Beth Drake, the Public Information Officer for the U.S. Attorney’s office in Columbia, S.C. said yesterday it is the policy of the government to comment on investigations only after an arrest warrant or indictment has been issued.

Drake went on to say, in public corruption cases the government normally will issue a press release and usually hold a press conference to make the information public if and when indictments are handed down.

Public corruption is a breach of trust or abuse of position by public officials and their private sector accomplices. Broadly the law may be violated when a public official demands, solicits, accepts or agrees to receive anything of value in return for being influenced in the performance of their official duties.

The players and the timing of events in Coastal Kickback have always been fascinating. The state legislature passed the enabling legislation for the one-cent local option tourism sales tax in Spring 2009. It allowed for local government to either hold a referendum or pass the tax by ordinance with a super majority vote.

Immediately after the state legislation was signed by Gov. Mark Sanford, the Myrtle Beach city council passed an ordinance approving the new tax by super majority. The Myrtle Beach Area Chamber of Commerce was designated as the agency to receive and spend the public tax dollars generated.

It was said at the time that it was too critical to get the tax revenue flowing immediately to wait for a referendum by the voters. To date, the Myrtle Beach tourism tax is the only local option sales tax enacted in the entire state that was not submitted to a referendum vote.

Campaign donations to state and local legislators involved in enacting the tax began as early as June 8, 2009, literally just days after the tax was made law and before its July 1, 2009 starting date.

Myrtle Beach city elections were scheduled for November 2009. The next election for state representatives was November 2010 and for state senators November 2012. The June 2009 donations are beyond the pale even for early campaign donations for these respective campaign dates.

Of course, the fact that many of these donations flowed through LLC’s that had no independent offices, no visible means of income and no employees only added to the mystery. Additionally, according to records of the S.C. Secretary of State, two of the LLC’s were not registered with the state and one was disbanded 18 months prior to making $25,000 in donations.

As David Wren reported in the Sun News in December 2010, legitimate businesses that donated to PAC’s supporting the politicians who passed the tourism tax received at least $5.9 million in public money, in the first three quarters of 2010, without competitive bidding and with little oversight. Most of the $5.9 million came from tourism tax revenue.

The facts we know certainly make the actions and motivations of the public officials involved and their private sector accomplices very questionable.

We can now only wait to see if the grand jury agrees.

Link to the Wren story: http://www.myrtlebeachonline.com/2010/12/19/1877146/donors-profit-from-sales-tax.html