Explore Charleston CEO Says No Ill-intent With Cayman Bank Account
Passengers wait in line at the British Airways counter at Charleston International Airport for the inaugural flight from Charleston to London in early April 2019. (File/Brad Nettles/The Post and Courier)
Charleston’s state-funded tourism marketing group stowed nearly $2 million in public money in an offshore account on an island nation known for banking secrecy long favored by tax dodgers and money launderers.
Helen Hill, chief executive of the Charleston Area Convention & Visitors Bureau, said she could understand that this might provoke some suspicion, but the account was used strictly for business and the public’s good.
The account, Hill said, was set up solely to make good on the bureau’s deal with British Airways that brought Charleston its first nonstop transatlantic flight. At the time, this route was expected to have an estimated $20.2 annual economic impact.
On Oct. 17, 2018, the visitors bureau entered into an agreement with British Airways that required the nonprofit to hand over $2 million for the airline’s two operating seasons each year. The money would help underwrite the Charleston to London flights and joint marketing efforts for the venture.
These types of air incentives by conventions and visitor bureaus are quite common in the United States, according to a study by Russell Mills, the Senior Director of Regional Development at Bowling Green State University.
The ability to design incentives may make community organizations, like Explore Charleston, popular options when negotiating with airlines, the study said.
Charleston County and the South Carolina Department of Commerce put up $1.8 million to help satisfy the agreement.
Read the main story: Charleston, South Carolina’s Tourism Machine
This story is part of a collaboration with The Post and Courier through FRONTLINE’s Local Journalism Initiative, which is funded by the John S. and James L. Knight Foundation and the Corporation for Public Broadcasting.
The contract called for the visitors bureau, more commonly known as Explore Charleston, to pay the airline in British Pound Sterling, the official currency of the United Kingdom.
Hill said she decided to keep the money in Pounds Sterling in an account in the Cayman Islands. That way the money would hold its value and not be subject to fluctuating exchange rates.
If kept in U.S. currency, they may have to come up with more money if the dollar loss value to the pound, Hill said.
In total, Explore Charleston paid British Airways more than $1.7 million as part of this arrangement, according to audits. The visitors bureau received a refund of $251,992 after the COVID-19 pandemic paused air travel in 2020.
In August 2020, Explore Charleston closed its account with Wells Fargo and moved the remaining funds to First National Bank, Chris Campbell, a spokesperson for the nonprofit. First National Bank holds the British Pound Sterling notes in Commerz Banks, headquartered in Germany.
Campbell says the account currently holds $766,158 for the purpose of advertising and marketing in the United Kingdom.
In 2019, British Airways had about 9,300 passengers fly back and forth from London to Charleston. Each way during its twice-weekly flights, the planes ran about 73 percent full.
Hill said she’s unsure if British Airways will make a return to Charleston. As of now, there are no plans to resume service.
This story has been updated.
Reach Briah Lumpkins at email@example.com or (843) 830-2947.