hilton head island sign (web only) (copy)

The Hilton Head Island-Bluffton Chamber of Commerce promotes tourism in that part of the state. File/Provided

The spending activities of a South Carolina tourism marketer that receives tax dollars are not subject to the state's Freedom of Information Act, the S.C. Supreme Court ruled Wednesday.

The decision reversed a lower court's decision that found the Hilton Head Island-Bluffton Chamber of Commerce was a public body that falls under the open records law.

It effectively shields millions of dollars in tax revenue around the state from public scrutiny. 

"We hold, as a matter of discerning legislative intent, that the General Assembly did not intend the Chamber to be considered a public body for purposes of FOIA as a result of its receipt and expenditure of these specific funds," the high court wrote.

The case stems from a 2013 lawsuit filed by C.C. “Skip” Hoagland. The retired businessman said he requested “total access to the financials” of how the Hilton Head-Bluffton Chamber was spending what’s known as accommodations tax funds — public money that local governments can assign to a “destination marketing organization” to help promote the area. 

Hoagland said he would continue his crusade to get the group to disclose its financial information, potentially by using the state's nonprofit regulations.

Hoagland said he viewed the court's opinion as an example of "corruption to the highest levels of South Carolina."

"We don't even need the Supreme Court. The Supreme Court was just a way of proving how bad things are in South Carolina," he said. 

Some tourism promotion organizations have argued that broadly applying the state’s open records law would hinder their ability to do their jobs in the highly competitive industry. Some in the nonprofit sector also worried that a ruling in support of applying the FOIA could put a burden on smaller organizations that receive public money. 

"This ruling is an affirmation that chambers of commerce and nonprofits are not government entities and should not be treated as such," Charlie Clark, a spokesperson for the Hilton Head-Bluffton Chamber, wrote in a statement. "The chamber recognizes the critical role of transparency and takes this responsibility and obligation very seriously."

The Myrtle Beach Area Chamber of Commerce also opposed the application of open records laws by filing a brief in support of the Hilton Head group. Both organizations receive the majority of their funding from public sources

Open records advocates countered the FOIA is crucial to the public’s ability to learn how their tax dollars are spent. Bill Rogers and Jay Bender of the S.C. Press Association said that, in effect, the court's decision has shielded tens of millions of dollars given out as acomodations tax funds to tourism marketers around the state.  

"If the Supreme Court majority is correct, then the General Assembly has created a scheme to allow money laundering on a grand scale by chambers of commerce," Bender said.

State Rep. Bill Taylor, R-Aiken, said the opinion may mean lawmakers need to clarify the disclosure standards for chambers and other publicly funded tourism marketers. 

"If (they) don't do the right thing, which is to be transparent with taxpayers' money, it certainly is up to the Legislature to push forward with some legislation that would call for that," Taylor said. "It's on my radar screen now."

The main legal option left to Hoagland is to ask the court to reconsider its decision, which was 4-to-1. 

Taylor Smith, the attorney for Hoagland, said they were "still digesting the opinion and evaluating our options."

In the dissent also released Wednesday, Justice John Cannon Few wrote that the state's disclosure law was clear in its definition of who it applied to, and that the chamber falls in that category.

State code says the FOIA applies to "any organization, corporation, or agency supported in whole or in part by public funds or expending public funds."

"The majority has employed an elaborate analysis to avoid the plain language of the FOIA under the guise of 'discerning legislative intent,'" he wrote in his dissent.

John McDermott has been the business editor of The Post and Courier since 2006. He's written about all facets of the South Carolina economy, served in the U.S. Air Force and is a graduate of the University of Hawaii-Manoa journalism program.

Chloe Johnson edits the Health and Environment team and writes about South Carolina's changing climate. Her work has been recognized by the Society for Features Journalism, the Scripps Howard Foundation and was a finalist for the Pulitzer Prize.