Dear Aiken City Attorney Smith,
On April 12, 2023, you requested an informal opinion from the South Carolina Ethics Commission in regard to the dissolution of the AMDC. In that letter, you wrote the following in regard to the Aiken Corporation:
“The Aiken Corporation is a 501(c)(3) corporation that was formed by (Aiken) City Council in 1995 to promote economic development in the City of Aiken. Historically, two City Council members have served on the Board of Directors of Alken Corporation. The Bylaws of the Aiken Corporation provide that in the event of dissolution, the residual assets of the organization will be turned over to the City of Aiken to be used exclusively for public purposes.”
The first sentence in this paragraph is now in question. Can you cite the specific ordinance, resolution, or other City Council action that resulted in the actual formation of the Aiken Corporation?
In her informal opinion, Ethics Commission General Counsel Courtney Laster interpreted this description of Aiken Corporation as meaning the Aiken Corporation was created by and serves at the discretion of Aiken City Council:
“However, the Commission held an exception to the recusal requirement exists when ‘the public official sits on a board in his official capacity . . . in order to be serving in his official capacity, the public official must sit on a board, foundation, agency, etc. which is an arm or child of the council, i.e. created by council and existing solely at the discretion of council.’ SEC A02001-001.”
Again, could you cite the specific ordinance, resolution, or other City Council action that shows Aiken Corporation was created by Council and exists solely at the discretion of Council?
The Aiken Corporation’s founding documents and subsequent tax filings only describe the City of Aiken as a “related” organization. The March 13, 1995 agenda only contains resolutions defining Aiken Corporation as a partner with the City of Aiken; no different than the City’s relationshp with the Chamber of Commerce. A 2005 memo from Richard Pearce furthermore states the Aiken Corporation “is not a division of the City of Aiken.
If there is evidence that Aiken Corporation was formed by City Council, and not merely assisted in its incorporation application in 1995 by then City Manager Steve Thompson, please advise.
Also, if it turns out the Aiken Corporation was not formed by Aiken City Council, can this be corrected with the Ethics Commission for the historical record, since it would mean that the two Council members who sat on the Aiken Corporation Board of Directors acted appropriately by not moving forward on the March 13, 2023 resolution to transfer ownership of Aiken Municipal Development Commission properties to the City of Aiken? This in turn resulted in City Council indirectly acting to transfer the properties by dissolving the AMDC, rather than having City Council, acting in its capacity as the AMDC, to transfer the properties and leave the AMDC intact.
The latter is a point I still believe the Ethics Commission mistakenly interpreted. In fact, the transfer of the properties occurred to avoid potential conflicts of interest by Aiken Corporation Board Members who are also Aiken City Council members. Without this potential conflict of interest, the properties would undoubtedly have been transferred directly by Aiken City Council acting in its capacity as the AMDC, and the AMDC would remain to this day. Thus, the rationale for the dissolution of the AMDC was to transfer the properties, and not to dissolve the AMDC.
I understand the confusion surrounding this rather archaic, 20th Century organization, but any confusion about the recipient of City funds and staff time should be resolved now, given the current and proposed role of the Aiken Corporation in the $20 million effort to develop a “Mixed-Use” office building, with the hopes that the Savannah River National Laboratory operating contractor will obtain upwards of $0.5 million in federal funds to lease the facility.
Thank you,
Donald Moniak
On December 5, 2023, Mr. Smith responded:
“Good morning Mr. Moniak,
I would politely suggest that you refer this question to your personal attorney.
Thank you,
Gary Smith”