CONWAY, S.C. (WPDE) — Facing an investigation by the South Carolina Law Enforcement Division into accusations of extortion involving one of his associates, Johnny Gardner agreed to meet with ABC 15 for a sit-down, on-camera interview Friday morning to share his memory of a meeting made public in a leaked memo Thursday morning.
The agreement followed a 15-minute in person, off-camera meeting with Gardner on Thursday night in Myrtle Beach.
The scheduled interview was a chance for Gardner to share his side of the story to the public and give a more detailed account of what happened than he was able to the day before.
However, 30 minutes before the scheduled meeting, Gardner called ABC 15's newsroom to cancel.
In a phone conversation later that morning, he, again, said he denied the version of events that was reported and welcomed the SLED investigation into the allegations. He said he would not be making any further statements to the media until the investigation wrapped up.
ABC 15 obtained a copy of that memo early Friday morning, which was written by Horry County Attorney Arrigo Carotti and sent to Horry County council members and County Administrator Chris Eldridge earlier in the week.
In it, Carotti wrote that Myrtle Beach Regional Economic Development Corporation (MBREDC) CEO Sandy Davis approached him about a meeting she and a staff member had with Gardner and businessman Luke Barefoot at a restaurant.
According to the memo, Davis said Barefoot told her about a local blogger, who was planning on writing a negative story about her.
The blogger has said that he didn't plan on writing any story, nor was he asked to write any such story.
Davis allegedly said Barefoot told her the article could be taken care of, as well as any future negative publicity, if she hired a man named Donald Smith to manage the corporation's public relations for about $40,000. The memo said she was told to use the Beach Ball Classic as cover for the payment.
Smith is well known inside Horry County political circles for managing local candidates' public relations work, including Gardner's, according to the memo.
The memo reported that Davis rejected Barefoot's offer and said she couldn't hire someone for more than $5,000 without approval.
She is reported to have told Carotti that Gardner sat and listened during the conversation, which she said was secretly recorded by her employee, and that Barefoot did most of the talking.
In South Carolina, recording a conversation is not illegal as long as one participant is aware the conversation is being recorded. In this case, that was Davis' employee.
Extortion, however, is illegal.
South Carolina law defines blackmail as, "Any person who verbally or by printing or writing or by electronic communications... compels any person to do any act, or to refrain from doing any lawful act, against his will... with intent to extort money or any other thing of value from any person."
The penalty for blackmailing someone is up to 10 years in prison.
Editor's Note: A name unrelated to this story has been redacted from the memo above to protect that person's privacy.
Carotti's memo reports that several other individuals became involved once Davis opened up about the meeting, including MBREDC Chairman Fred Richardson, Treasurer Neyle Wilson and Eldridge.
The memo reported that Richardson was "very mad, and said he was going to call Luke Barefoot and give him a piece of his mind," when Davis told him about the meeting.
Reached by phone Friday afternoon, Richardson disputed that report, saying, "I don't recall a conversation with Sandy that went that way."
He said he had not seen the memo, and commented after ABC 15 read him the paragraph that included his name.
The memo stated that Wilson and Carotti spoke about Davis' account of the meeting, but had two different interpretations of what happened. Wilson allegedly was told that the comments about hiring Smith were made in passing, and "there was nothing to it."
Wilson could not be immediately reached for a response to the memo Friday afternoon.
Carotti's memo shows several different positions taken by Davis throughout the course of several weeks. In a conversation with her on Dec. 6, Carotti writes that Davis wanted the meeting recorded because of a previous discussion with Barefoot.
Wilson was reported to have been told that Davis was afraid of Gardner's negative stance on the corporation, and that the course of the conversation would make matters worse.
The memo reported that another man, attorney Scott Bellamy, was told that the conversation was recorded because Richardson could not be at the restaurant meeting for personal reasons, and had asked Davis to take good notes.
Thursday afternoon, Davis told ABC 15 that she had the meeting recorded because an executive board member couldn't be present and that said she didn't take the interpretations of what was said in the meeting the same as others did.
"I didn't see that I was threatened or that there was extortion," she explained, "But, I will need to wait for my executive committee to decide what to do further."
The executive committee has called a special meeting Saturday morning with the purpose of going into executive session.
Davis told ABC 15 that Eldridge has asked for a copy of the recording, and said she met with SLED agents Friday to hand over the file to them.
The memo stated several times that Davis was unwilling to hand over the recording to attorneys and county administrators, apparently because she didn't want to get anyone in trouble.
It also reported that several people listened to part of the recording, including Eldrige, Carotti, Wilson, outgoing Council Chairman Mark Lazarus, and councilman/MBREDC Board Member Gary Loftus.
Carotti recalled that the recording was of good quality, and a voice said Donald Smith was "in the shadows and could influence votes or was somehow in control behind the scenes."
It was at this point in the memo that Carotti wrote about hearing references to the Beach Ball Classic and "political cover."
Lazarus confirmed that he listened to four-and-a-half minutes of the 90-minute recording. He said he had no further comment, citing the ongoing investigation.
A copy of an email apparently sent by Eldridge referencing the accusations was also attached to the memo.
In it, Eldridge states, "[the discussion about the payment] could be viewed as unethical and possibly illegal... something of this nature can't be 'brushed under the rug.' Doing so jeopardizes the credibility of the MBREDC and all it has accomplished."
Loftus couldn't immediately be reached for comment Friday. Eldridge declined a request for comment.
After receiving and reviewing the contents of the memo, ABC 15 requested and was granted an interview with Councilman Johnny Vaught, who often acts as the unofficial spokesperson for the council as a whole.
Vaught said he first looked at the memo Wednesday and had to read it three times out of disbelief.
"It totally hit me by surprise," he recalled. "It probably left me with more questions than answers."
Vaught said that the memo was a one-sided narrative of what happened, and based on his relationships with all of the people named in the memo, that narrative didn't make sense.
"I can't believe somebody would be stupid enough to do what the allegations say that they've done," he said. "Council does not need to start a new year off under a cloud, whether it be a contrived cloud or whether it be under a true cloud."
ABC 15 asked Vaught what the consequences should be if the accusations were found to be true.
"To me, it would become a legal and an ethical issue," he said. "I would lose a lot of confidence in my new chairman."
He quickly added that at this point, he does not believe that the accusations are all true and said he wanted to hear the recording before making his mind up as to what happened.
"I've known [Gardner] for a lot of years; I've accepted the fact that he's going to be my chairman, and I'm prepared to support him," Vaught explained. "I think most of council is prepared to support him, and I don't want that to change."
He was also asked to address a long-term criticism of Horry County's political environment-- that it can be a "good ol' boys club."
He said the term was created and used by people who don't know how the system works.
"Who better to know the county and know the county's issues than people who were born and raised in Horry County?" he asked.
He said council members, as leaders, are blamed whenever plans don't work out, and he knew that when he first ran for his seat.
He said detractors are free to criticize and use their free speech, but they often do so anonymously online without basing their comments on the facts.
"You're not going to change their minds because they're not part of the system and they're not willing to function within the rules of the system," he said.
He also added that Gardner was just as much a part of it as anyone else, despite being considered an 'outsider' when he ran for chairman.
The final question was simple: what happens now?
"Council is not going to change how we do business," Vaught said, firmly. "This county can't stop because of something that's happening like this."
He said council members would take whatever action they thought was needed once the investigation wrapped up-- not before.
"We're not going to shut down because of rumors and speculation," he said. "At this point right now, that's all I can call it."
When asked if he knew who leaked the internal memo, Vaught said he didn't know.
Saturday, members of the Myrtle Beach Regional Economic Development Committee called an executive session to discuss whether to allow the Horry County Administrator to review the tape. County Council Chairman Mark Lazarus disagreed and walked out of the meeting. When leaders reconvened, they announced no decision had been made in executive session.