Clyburn doesn't list business deals on required form

U.S. Rep. James Clyburn is in business with Waccamaw Regional Transportation Authority officials and area business leaders and is a backer on nearly $2 million worth of real estate loans, though Clyburn has never included that information on financial disclosure forms as required by federal law.

Clyburn's business partners include Egerton Burroughs, a member of the authority's board of directors, and Benedict Shogaolu, who was fired as the mass transit agency's chief executive officer last month. Shogaolu's firing followed an investigation that said he spent public money on personal expenses and possibly violated state and federal laws.

Clyburn is a member of the House Appropriations Committee and its transportation subcommittee. Those groups help determine how much federal tax money is spent and where it is spent on mass transit and other transportation projects.

Clyburn, a Democrat who represents South Carolina's 6th District, said Wednesday he doesn't see a conflict in doing business with mass transit officials.

"I have never asked for an appropriation for [the authority]," he said.

Clyburn said he was surprised the business deals weren't listed on his financial disclosure forms.

"I had no idea," he said.

Clyburn became part of the business partnership in 2000. His financial disclosure forms for 2000, 2001 and 2002 do not include information about the partnership. Those forms are signed and dated by Clyburn. The 2003 form is due May 15.

Mortgage documents related to the business partnership are on file at the Horry County Register of Deeds office. Those documents include signatures of all the people involved in the partnership, including Clyburn.

One of the mortgage documents was among papers found in Shogaolu's desk after he was fired. The Sun News obtained the document under the state's Freedom of Information Act.

It is not illegal for members of Congress to be in private business deals, but federal ethics laws say those deals must be disclosed to the public.

The authority's records show Burroughs wrote to Clyburn in 1999 asking for his help in getting $26 million for the mass transit agency. In 2002-03, the authority paid a Washington, D.C., law firm nearly $20,000 to lobby members of Congress, including Clyburn and U.S. Rep. Henry Brown, for federal grants, according to documents from the authority, which does business as Lymo and provides public bus service to Horry and Georgetown counties.

Clyburn said he has known Burroughs for more than 35 years and the two have been involved in several investments. Clyburn said he knows who Shogaolu is but doesn't know him personally and wasn't aware that he was a part of the real estate deal.

"I don't know all the people involved," Clyburn said. "My relationship with that project is with Egerton Burroughs. I have no idea who else is involved."

Telephone records obtained by The Sun News under the S.C. Freedom of Information Act show Shogaolu called Clyburn's cell phone at least five times during a 14-month period between Oct. 18, 2001, and Dec. 16, 2002. Clyburn's office telephone number is listed on his Web site as a way the public can contact him. His cell phone number is not publicly listed.

"I know who [Shogaolu] is, but I don't have any type of relationship with him," Clyburn said. "I interact with the different transit people in the state all the time, and I have spoken to him. But he is not anyone who I accept investment suggestions from."

Burroughs could not be reached for comment Wednesday.

Natasha Hanna, Shogaolu's attorney, said Shogaolu doesn't want to comment on the business partnership.

"His private business has nothing to do with Lymo," Hanna said. "There is nothing wrong with him being in business with Egerton."

State ethics laws require government officials and board members to disclose their pay and benefits and any business dealings they may have. Shogaolu, Burroughs and other authority board members did not file those disclosures. Cathy Hazelwood, attorney for the S.C. Ethics Commission, said the authority wasn't on the commission's list of agencies expected to file and had not been notified of the requirement.

Federal law requires members of Congress to report all income, assets, liabilities and travel reimbursements on annual disclosure forms. Government officials who omit information or file false disclosure forms can face civil penalties of up to $10,000 and possible criminal prosecution.

The Sun News obtained Clyburn's disclosure forms from Dwight L. Morris and Associates, a Washington consulting firm that specializes in campaign finance research.

Clyburn said he thought he had listed the $2 million in real estate loans on his financial disclosure forms.

"I thought everything I was involved in was on the forms," he said.

The $2 million worth of real estate loans that Clyburn and at least nine others are involved in were taken out under a structure that includes three corporations, documents show.

The loans are on two lots near Husted Road in Conway - a $1.6 million loan in 2000 on property where a Stock Building Supply warehouse is located and a $368,000 loan in 2002 on another site. The properties have a combined fair market value of $2.45 million, according to Horry County tax records.

Both properties are owned by Carolina Builders Master, a limited liability corporation of which Burroughs Brothers Properties Inc. owns 50 percent and Investment Entrepreneurs LLC owns 50 percent, according to Cheryl Wingard, managing partner of Investment Entrepreneurs.

Burroughs is listed as the registered agent for Carolina Builders Master, although his name is misspelled "Borroughs" on corporation papers filed with the state.

Wingard said Investment Entrepreneurs has eight partners, including Clyburn, who owns 10 percent of the corporation. Shogaolu also owns 10 percent of Investment Entrepreneurs, which state records say was formed in August 2000.

Burroughs Brothers Properties, owned by Egerton Burroughs and Howard Burroughs, also owns 10 percent of Investment Entrepreneurs, Wingard said.

Other owners include Wingard, James Adamson, Donnell Lewis, Shital Patel and Salvador Villapando.

Carolina Builders Master, the umbrella group for all of the investors, was formed in July 2000, according to state records.

Wingard said Investment Entrepreneurs has "talked about opportunities down the road" but doesn't have any investment plans beyond the two pieces of property in Conway.

"The way we have set it up is if anybody has an opportunity, they can bring it to the entire group and we'll look at it," Wingard said.

Investment Entrepreneurs and Burroughs Brothers Properties each are responsible for half of the real estate loans, Wingard said. The individuals who make up Investment Entrepreneurs have liability equal to their share of the corporation. Clyburn's liability, for example, would be 10 percent of Investment Entrepreneurs' half, or 5 percent of the total.

Clyburn said his friendship with Burroughs has led to several business deals over the years.

"Occasionally, I invest in things he does if it's something I feel comfortable with," Clyburn said. "Some things have made money, and I've lost in some investments. You take a gamble. That's what the American system is all about."

Clyburn - whose district includes all or part of 15 counties, including Marion and Williamsburg counties - said he also owns a piece of property on Dunbar Street in Myrtle Beach and has an investment in Florida. Neither of those investments are listed on Clyburn's financial disclosure forms. Clyburn said he also is considering investing in the Grande Dunes residential project that Burroughs & Chapin Co. Inc. is developing.

"I may look at it as a retirement area," Clyburn said. "I love to play golf, and I wish the Grand Strand was in my district."