Charleston’s state-funded tourism marketing group has stashed nearly $2 million in public funds in an offshore account in an island nation known for its banking secrecy long favored by tax evaders and money launderers.
Helen Hill, executive director of the Charleston Area Convention & Visitors Bureau, said she understood that this might raise some suspicion, but the account will only be used for business and public purposes.
The account, Hill said, was set up solely to fulfill the bureau’s deal with British Airways, which gave Charleston its first non-stop transatlantic flight. At the time, this route was expected to have an estimated annual economic impact of $20.2.
On October 17, 2018, the Visitors Bureau entered into an agreement with British Airways that committed the non-profit organization to pay US$2 million each year for the airline’s two operating seasons. The money would help fund Charleston-London flights and joint marketing efforts for the company.
According to a study by Russell Mills, senior director of regional development at Bowling Green State University, these types of air incentives through conventions and visitor bureaus are common across the United States.
The ability to design incentives could make community organizations like Explore Charleston popular options when negotiating with airlines, the study found.
Charleston County and the South Carolina Department of Commerce provided $1.8 million to fulfill the agreement.
Read the main story: Charleston, South Carolina’s tourism machine
This story is part of a collaboration with The Post and Courier as part of FRONTLINE’s Local Journalism Initiative, funded by the John S. and James L. Knight Foundation and the Corporation for Public Broadcasting.
The contract stipulated that the Visitors Bureau, better known as Explore Charleston, would pay the airline in British Pounds Sterling, the official currency of the United Kingdom.
Hill said she decided to hold the money in sterling in an account in the Cayman Islands. That way the money would retain its value and not be subject to fluctuating exchange rates.
If they’re held in US currency, they may have to raise more money if the dollar weakens against the pound, Hill said.
In total, Explore Charleston paid British Airways more than US$1.7 million under this agreement, according to audits. The Visitors Bureau received a $251,992 refund after the COVID-19 pandemic disrupted air travel in 2020.
In August 2020, Explore Charleston closed its account with Wells Fargo and transferred the remaining funds to First National Bank Chris Campbell, a spokesman for the nonprofit. First National Bank holds British sterling notes in Commerz Banks, headquartered in Germany.
According to Campbell, the account currently has $766,158 for UK promotional and marketing purposes.
Campbell said they now hold British pounds for advertising in UK marketing.
In 2019, British Airways carried around 9,300 return flights from London to Charleston. During the twice-weekly flights, the planes were utilized at about 73 percent in both directions.
Hill said she was unsure if British Airways would return to Charlston. There are currently no plans to resume service.
You can reach Briah Lumpkins at [email protected] or (843) 830-2947.