Mystery Money

Sunday’s article calls for the end of corporate campaign contributions in South Carolina (as in federal elections and more than 20 other states), using the recent upset over contributions in Myrtle Beach as an example.

The hundreds of mysterious $1,000 donations to local politicians that have caused such stir over the last two weeks are, as The Sun News has reported, both legal and commonplace in South Carolina.

And, frankly, a little repulsive.

Inherent in campaign finance is a tension between enabling free speech and preventing corruption. Contributions are widely viewed as constitutionally protected political speech, but also as having the potential to give donors undue influence over politicians (some might use the word "bribe"). In the United States, that tension is partly resolved by laws that limit the amount of money one donor can give (i.e., the $1,000 maximum in local races) and laws that require disclosure of the donors - on the premise that if an official's donors are known, the public can watch his behavior toward them.

So, at the very least, these shell corporations that passed upward of $300,000 around Myrtle Beach frustrate the public's ability to know who is supporting any given official. Who are 905 Polo Partners or Deluxe Land Partners LLC? All we know is the company's registered agent is former Myrtle Beach Area Chamber of Commerce board chairman Shep Guyton, but the company itself could have any number of partners, and the public has no way to find out who they are.

Worse yet, the corporations may be allowing some donors to skirt campaign-finance maximums, but again, the public has little ability to find out. Theoretically, Donor A and Donor X could form multiple corporations and hand out lots of money, with the public none the wiser. This, too, seems at least plausible in this case.

The most vocal critics of those Myrtle Beach City Council incumbents (Mayor John Rhodes and councilmen Wayne Gray, Chuck Martino and Randal Wallace) who received $24,000 each have suggested that the money is a form of kickback for the tourism marketing tax. That may be a bit of overinterpretation - both the ad tax and the rally restrictions had significant support from the Myrtle Beach business community, so ensuing financial support for candidates who made those decisions is to be expected - but the clandestine way in which the money was donated certainly opens the recipients up to such criticism.

And that secrecy brings us back to the larger point. Myrtle Beach certainly has its wealthy donors, and they have as much right to support their candidates as the rest of us. But why do it in secret, and moreover, why does the public allow it?

This issue is not without a solution. The federal government and at least 20 individual states (including North Carolina) all prohibit campaign contributions directly from corporations (they may create "political action committees," but there are strict limits on who may donate into those, and of course, require full disclosure of those donors). We would like to call on our local legislative delegation to support such a change, but at least seven state legislators (Sen. Ray Cleary and Reps. Thad Viers, George Hearn, Alan Clemmons, Nelson Hardwick, Tracy Edge and, to a lesser degree, Liston Barfield) all received the same money.

Our situation in Myrtle Beach is probably beyond repair in this election cycle, except at the ballot box - voters who already feel insulted by the City Council's arrogance in its recent decisions are likely to frown further upon such lavish spending in the middle of a recession. In the meantime, with corporate spending such a popular sport at the state level, we probably won't hold our breath waiting for change from Columbia, either.

Inherent in campaign finance is a tension between enabling free speech and preventing corruption. Contributions are widely viewed as constitutionally protected political speech, but also as having the potential to give donors undue influence over politicians (some might use the word "bribe"). In the United States, that tension is partly resolved by laws that limit the amount of money one donor can give (i.e., the $1,000 maximum in local races) and laws that require disclosure of the donors - on the premise that if an official's donors are known, the public can watch his behavior toward them.

So, at the very least, these shell corporations that passed upward of $300,000 around Myrtle Beach frustrate the public's ability to know who is supporting any given official. Who are 905 Polo Partners or Deluxe Land Partners LLC? All we know is the company's registered agent is former Myrtle Beach Area Chamber of Commerce board chairman Shep Guyton, but the company itself could have any number of partners, and the public has no way to find out who they are.

Worse yet, the corporations may be allowing some donors to skirt campaign-finance maximums, but again, the public has little ability to find out. Theoretically, Donor A and Donor X could form multiple corporations and hand out lots of money, with the public none the wiser. This, too, seems at least plausible in this case.

The most vocal critics of those Myrtle Beach City Council incumbents (Mayor John Rhodes and councilmen Wayne Gray, Chuck Martino and Randal Wallace) who received $24,000 each have suggested that the money is a form of kickback for the tourism marketing tax. That may be a bit of overinterpretation - both the ad tax and the rally restrictions had significant support from the Myrtle Beach business community, so ensuing financial support for candidates who made those decisions is to be expected - but the clandestine way in which the money was donated certainly opens the recipients up to such criticism.

And that secrecy brings us back to the larger point. Myrtle Beach certainly has its wealthy donors, and they have as much right to support their candidates as the rest of us. But why do it in secret, and moreover, why does the public allow it?

This issue is not without a solution. The federal government and at least 20 individual states (including North Carolina) all prohibit campaign contributions directly from corporations (they may create "political action committees," but there are strict limits on who may donate into those, and of course, require full disclosure of those donors). We would like to call on our local legislative delegation to support such a change, but at least seven state legislators (Sen. Ray Cleary and Reps. Thad Viers, George Hearn, Alan Clemmons, Nelson Hardwick, Tracy Edge and, to a lesser degree, Liston Barfield) all received the same money.

Our situation in Myrtle Beach is probably beyond repair in this election cycle, except at the ballot box - voters who already feel insulted by the City Council's arrogance in its recent decisions are likely to frown further upon such lavish spending in the middle of a recession. In the meantime, with corporate spending such a popular sport at the state level, we probably won't hold our breath waiting for change from Columbia, either.