RACHEL E. LEONARD, Staff Writer
Published October 24, 2006
The State Law Enforcement Division has joined the S.C. Secretary of State's Office in an investigation into the Miss South Carolina Organization, which has been accused of failing to properly distribute scholarship monies, financial irregularities and sexual misconduct by the pageant's director.
SLED spokeswoman Bobbi Schlatterer confirmed Monday that the state's top law enforcement agency is investigating the nonprofit organization, which holds its annual pageant each July in Spartanburg. The Secretary of State's Office launched an investigation into the pageant earlier this year after receiving a complaint that contestants did not receive promised scholarship money and that the organization was falsely reporting income.
Sexual misconduct?
After receiving complaints from the public and local pageant officials in September, Susan Rose, general counsel for the Secretary of State, referred the allegations to the state Attorney General's Office. One of those accusations was that a contestant caught a pageant official engaged in sexual activity with another contestant in an Atlantic City hotel room.
The Attorney General's Office forwarded the allegations to SLED for investigation, said Attorney General spokesman Mark Plowden.
In a Sept. 15 memo to the Attorney General's Office, Rose writes that representatives of her office met with
Eddie Payne and Margaret Powell, former Miss Golden Corner directors, who raised suspicions of financial discrepancies in the Miss South Carolina Organization's tax filings, including underreporting of more than $100,000 in income since 1996 and inflated expenses. Payne and Powell also made allegations that would fall outside the jurisdiction of the Secretary of State's enforcement powers. Those accusations, according to the memo, include:
• Sexual misconduct by pageant producer Joey Sanders
• Excessive field operations, road trips and meal expenditures by pageant CEO and comptroller Joe and Gail Sanders and excessive benefits to board members
• Joey Sanders receiving a $35,000 salary without formal board approval
• That the Webmaster for the organization was asked to falsify invoices
• Legal fees from a 2002 trademark case were not reported on tax filings and that Joey Sanders, under oath at a deposition, made false statements about his salary and ownership of the organization's office.
Payne and Powell requested that the state organization conduct an independent audit, a request that was rejected. They also accused the organization's board of failing to hold regular meetings or oversee the activities of its members. The Sanderses could not be reached for comment Monday. For past stories by the Herald-Journal regarding pageant issues, board members and the Sanderses have refused to speak on the investigation on their attorney's advice, but board member and accountant Dale Keown said in a previous interview he could not say how many times the board of directors had met during the past five years and that there is no set meeting schedule.
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