The Charleston Chamber of Commerce joined two other groups nearly four years ago to form an organization now called the Charleston Area Alliance.

That's the popular belief, anyway. Dozens of newspapers articles reported the merger of the chamber, Charleston Renaissance Corp. and the Business and Industrial Development Corp. before, during and after it occurred in August 2004. Just ask Mayor Danny Jones, an alliance board member.

"That's what I voted for, and the boxes on the flow charts [at the time] indicated exactly that," Jones said.

But earlier this week, alliance President and CEO Matt Ballard said the chamber never merged with the alliance. Ballard was invited to a Monday meeting of the Finance Committee of Charleston City Council to answer questions about the situation.

Councilman Harry Deitzler said he recently received an e-mail from the alliance with a list of political endorsements from the chamber. "We formed the alliance by combining three groups, right?"

Not really, Ballard replied. "The chamber is a separate group, but shares staff. They did sort of merge in mindset, but not legally. We did so to get everybody talking to each other. The lines of communication are much better.

"The alliance, by charter, cannot participate in political activities." The chamber, however, is strictly political, Ballard said. "Basically, it does the annual Issues and Eggs breakfast and supports candidates."

The distinction is more than just a technicality, Deitzler said Tuesday, because both the city and the Kanawha County Commission give money to support the alliance. "You cannot use government resources to conduct political campaigning."

No public money goes to the chamber, Ballard said. And the alliance takes great pains to keep the chamber and alliance separate, even though the chamber moved its offices to the alliance-owned incubator building on Smith Street.

There, the chamber pays the same rent as other fledgling companies that lease office space from the alliance, he said. The chamber reimburses the alliance for work its staff does.

"We try to have a bright line of separation - separate computers, separate desks, separate e-mail account."

Deitzler disagreed. "The public really doesn't see the difference. That's what's bothering me. I just don't see why they can't separate, so we don't have this problem."

Councilman Ed Talkington said Deitzler has a point. "The chamber does enjoy a benefit. ... As I remember, the merger was going to be three groups, and there would be a separate Chamber PAC. It sounds like that isn't what's going on. It is kind of a queasy situation, especially when they're getting discounted rent."

On Tuesday, alliance board chairman Jack Rossi said Ballard may have misspoken. "The chamber merged, but it's affiliated. It sits out there separately.

"The thing that changed is how it's funded. A certain portion of [alliance] dues goes to the chamber," Rossi said. "Granted, they are one and the same employees."

The Charleston Chamber of Commerce joined two other groups nearly four years ago to form an organization now called the Charleston Area Alliance.

That's the popular belief, anyway. Dozens of newspapers articles reported the merger of the chamber, Charleston Renaissance Corp. and the Business and Industrial Development Corp. before, during and after it occurred in August 2004. Just ask Mayor Danny Jones, an alliance board member.

"That's what I voted for, and the boxes on the flow charts [at the time] indicated exactly that," Jones said.

But earlier this week, alliance President and CEO Matt Ballard said the chamber never merged with the alliance. Ballard was invited to a Monday meeting of the Finance Committee of Charleston City Council to answer questions about the situation.

Councilman Harry Deitzler said he recently received an e-mail from the alliance with a list of political endorsements from the chamber. "We formed the alliance by combining three groups, right?"

Not really, Ballard replied. "The chamber is a separate group, but shares staff. They did sort of merge in mindset, but not legally. We did so to get everybody talking to each other. The lines of communication are much better.

"The alliance, by charter, cannot participate in political activities." The chamber, however, is strictly political, Ballard said. "Basically, it does the annual Issues and Eggs breakfast and supports candidates."

The distinction is more than just a technicality, Deitzler said Tuesday, because both the city and the Kanawha County Commission give money to support the alliance. "You cannot use government resources to conduct political campaigning."

No public money goes to the chamber, Ballard said. And the alliance takes great pains to keep the chamber and alliance separate, even though the chamber moved its offices to the alliance-owned incubator building on Smith Street.

There, the chamber pays the same rent as other fledgling companies that lease office space from the alliance, he said. The chamber reimburses the alliance for work its staff does.

"We try to have a bright line of separation - separate computers, separate desks, separate e-mail account."

Deitzler disagreed. "The public really doesn't see the difference. That's what's bothering me. I just don't see why they can't separate, so we don't have this problem."

Councilman Ed Talkington said Deitzler has a point. "The chamber does enjoy a benefit. ... As I remember, the merger was going to be three groups, and there would be a separate Chamber PAC. It sounds like that isn't what's going on. It is kind of a queasy situation, especially when they're getting discounted rent."

On Tuesday, alliance board chairman Jack Rossi said Ballard may have misspoken. "The chamber merged, but it's affiliated. It sits out there separately.

"The thing that changed is how it's funded. A certain portion of [alliance] dues goes to the chamber," Rossi said. "Granted, they are one and the same employees."

In the early days of the alliance, those employees sometimes blurred the lines separating the chamber, he said. "Someone sent out an e-mail of chamber business with the alliance logo at the bottom.

"We feel we've corrected that. We've taken extra precautions to keep them separate. [The chamber is] an entity out there under the alliance umbrella. You cannot say it didn't merge."

Then again, maybe you can. Jim Sturgeon, tax lawyer and CPA, chamber president and alliance secretary, said he drafted the complicated document for what he doesn't like to call the merger.

"The problem is people in popular slang like to refer to this as a merger," he said. "It is not. It is an affiliation."

Four years ago, with help from other tax lawyers, Sturgeon wrote what he calls the four corporations for the affiliation. It combined three groups, but created four separate corporate entities: CADCO (Capital Area Development Corp., later renamed the alliance; the chamber; Chamber PAC, which raises money for candidates; and the CADCO Foundation, a charity.)

"These organizations work collectively for the membership, as affiliated by law," he said. "I've always referred to it as a fusion; the word 'merger' has a precise legal definition.

"I hate to say this; it's a dirty dark secret. The plan was written by a tax lawyer. It was done to allow all the activities we wanted to do."

The alliance board is made up of two groups, Sturgeon said: elected members, who also serve as chamber board members; and ex officio members who serve because of the office they hold, like Jones and County Commissioner Dave Hardy.

"That's why there's a Chinese wall, so the ex officio members are not involved in political activities."

Deitzler says he's not satisfied with Ballard's explanation, especially after finding the chamber and alliance share a Web site. The chamber's list of preferred candidates for the Tuesday primary, for example, are one click away from alliance Web pages.

And the alliance home page states the alliance "is a multi-faceted economic, business, and community development organization, as well as the largest regional Chamber of Commerce in West Virginia," Deitzler said.

"It's actually worse than what I thought. [Monday] night we learned they did not combine the organizations, despite what they said earlier," Deitzler said. "They're getting discount rent, they're using the staff, they're using the Web site.

"It is a façade. They're trying to do smoke and mirrors with us and the IRS, and it's not acceptable."

To contact staff writer Jim Balow, use email or call 348-5102.