The Daily News
By B. SCOTT McLENDON The Daily News
August 23, 2023

LEAGUE CITY - The city will attempt to recover $92,000 in federal COVID aid the chamber of commerce paid to one of its board members without full approval if an investigation finds the money was wasted, Mayor Nick Long said Wednesday.

Controversy over the money led the League City Regional Chamber of Commerce’s board of directors Tuesday night to remove its five-member executive board.

The assertion is the executive board paid the money, which had been awarded to the city, to a board member’s consulting firm without knowledge or approval of the full board, city and chamber officials said Wednesday.

The business owner, however, asserts reports about the spending were rife with errors and that he welcomes the outcome of audits underway by the city and chamber.

At issue is a series of $6,000 payments made by chamber CEO Dewan Clayborn, who resigned in March over unrelated matters, to Treasurer Charles Pulliam for consulting services, new Chairman Carl Joiner said.

Interim CEO Beth Journeay in July raised concerns about a lack of transparency in the chamber’s spending of about $200,000 in federal grant money approved by the city and meant to help businesses that suffered during the pandemic, city and chamber officials said.

“But at this point, there’s been no proof of wrongdoing,” Joiner, who is the former mayor of Kemah, said. “And the city has asked for an audit.”

The chamber also will audit all financial interactions that took place under the former CEO’s watch, Joiner said.

Pulliam, CEO of Solushiens Management Consulting, on Wednesday issued a written statement to The Daily News.

“My company worked with the chamber and the city of League City concerning and in support of two COVID relief grants between 2020 and 2022,” Pulliam wrote. “I was not the treasurer, nor did I have any signature authority during either grant period.

“The invoice total and individual invoice amounts reported are inaccurate. All invoices and expenditures had to be approved by the city of League City.

“We look forward to the audit being completed.”

Pulliam didn’t say how much his company earned after disputing the $92,000 that chamber officials reported.

The chamber’s 16-member board, which includes Long and former city council member Hank Dugie, voted Tuesday to remove the four executive board members responsible for overseeing such matters as payments to vendors.

The board voted Tuesday to remove Chairman Dan Newman, past Chairman Bryan Schneider, Pulliam, Secretary Diana Vazquez and Joiner, who was vice chair and reappointed as chairman.

“Our chamber board decided to remove the executive committee because we don’t think there’s a lot of transparency on some of the expenses,” Dugie said Wednesday.

No bylaws prevent the chamber from granting money to a business connected to one of its board members.

“We’re optimistic that the future of the chamber is bright,” Dugie said. “But every decision that’s made by the chamber needs to be run by the board and have board input to prevent something like this from happening again.”

Many board members felt they weren’t involved in the decision-making about the federal grant, Dugie said. Removing the executives came at an opportune time, with CEO Bryan Bolton’s first day scheduled for Monday, Dugie said.

Joiner can appoint the next executive board, he said.

The money came from a $600,000 allocation to the city from the American Rescue Plan, the $1.9 trillion national stimulus package passed in 2021. The League City City Council approved a three-year, $600,000 agreement with the chamber to help fund pandemic-affected businesses.

After seeing little bang for their buck by 2022, the council decided to reduce that amount to about $200,000, Mayor Nick Long said Wednesday.

“The biggest problem is the irregularities coming from the old CEO paying the treasurer many small payments and payments never went to the board,” Long said. “It never was disclosed to the board or the city that the money was going to a board member.

“It’s time for transparency.”

The city manager is expected to produce a report Thursday detailing exactly how much money the city has given to the chamber, and exactly where it was spent, Long said. It’s something residents have wanted to see for some time, Long said.

“I want to see it, too,” Long said.

Councilman Justin Hicks thinks the issue starts with the lack of transparency, he said Wednesday.

“If they were not spending it appropriately, we need to find out,” Hicks said. “Maybe the investigation will find out it’s not that bad.”

There’s no evidence anything nefarious happened, Hicks said.

In the city council’s Tuesday meeting, Long made a motion to cease all transfers of money to the chamber until an audit is complete; the motion passed.

“You can’t hide payments without the board knowing,” Long said. “This is the taxpayers’ money and federal money. We have to be diligent where it’s spent.

“We’re going to try to get that money back if it was wasted.”