Topics/Categories

Get The Nerve in your in-box every weekday morning!

Masters Calls for Investigation of SCRA Chief

S.C. Research Authority board Chairman Bill Masters said Wednesday that he has called for "an independent investigation into the trustworthiness" of Research Authority CEO Bill Mahoney after Mahoney explained raises for SCRA employees two different ways.

During an SCRA board meeting in Charleston, Masters also charged that Research Authority executives have disseminated some of his SCRA e-mails through their home computers. He said the action "indicates a breach of security within our organization."

None of the other board members present at the meeting spoke in favor of Masters’ comments about probing Mahoney’s actions.

Many of the Research Authority’s board members are top-ranking state officials, including the presidents of the state’s major publicly funded universities, the state commerce secretary and the chairman of the S.C. Commission on Higher Education.

The SCRA is a state-created and controlled technology and real estate company. It is the central player in efforts by state government and some local governments in South Carolina to develop a "knowledge-based economy."

As such, the SCRA functions as a nebulous and unusual, if not unique, public-private entity.

It does not receive any direct state appropriations. But the Research Authority was chartered under state law, in 1983, and granted 1,400 acres and $500,000 in start-up capital.

In addition, a state law passed several years, the Industry Partners Act, provides a 100 percent tax credit for contributions to a fund set up under the act. The fund is overseen by SC Launch, an affiliate of the Research Authority, to provide seed capital to new technology firms.

Specializing in applying research to commercial uses, the Research Authority operates much like a general contractor. It wins bids on projects, mainly from the U.S. military, and brings subcontractors and other partners together to execute the work necessary to fulfill its contracts.

Most of the SCRA’s revenue comes from contract management fees. The Research Authority recently reported that its 2010 fiscal year revenue, more than $170 million, set a record for the organization and was 60 percent more than in 2009.

SCRA employees are among the most handsomely compensated individuals listed in the state salary database.

Because of recently approved raises, many of them now are being paid even better, and that’s the source of the latest Masters-Mahoney conflict.

The two have clashed frequently.

Under state law, the governor appoints the SCRA chairman. Gov. Mark Sanford appointed Masters to the position in 2009, urging him to ask tough questions about the Research Authority’s dealings and work to bring more transparency and accountability to the SCRA.

Masters’ efforts have not gone over well with Research Authority management. His fellow board members, meanwhile, have greeted him, at best, tepidly, and at times with utter silence.

"This is the worst job of my life," Masters, an entrepreneur with a long career in business, told The Nerve after the Research Authority board meeting Wednesday at SCRA’s Trident Research Center in Charleston. "I got beat up today."

The board’s executive committee met after the board had conferred. It was at the end of the executive committee meeting when Masters talked about an investigation of Mahoney and some of his emails being improperly distributed.

The committee approved a resolution praising Mahoney’s job performance last fiscal year and identifying goals for him to achieve this year.

Masters was the only committee member who objected to the resolution.

"I oppose," he said, "and I oppose because I had asked for an independent investigation on the trustworthiness of our CEO based on the last meeting we had and the information he conveyed to me about the compensation matters."

During a Sept. 30 meeting in Columbia, the executive committee on a voice vote approved pay hikes for SCRA employees. Mahoney said during that meeting that the raises would total about 6.5 percent for all of the SCRA’s approximately 240 workers.

"There’s no weighting top to bottom? It’s straight across the board?" Masters asked.

"Correct," Mahoney replied.

The Nerve and The Associated Press, in a story that appeared in The New York Timesreported on the raises being approved.

But in an Oct. 4 letter to employees, Mahoney explained the raises differently. He said salary increases were calculated for 97 employees only and the amounts ranged as high as 9 percent.

"The press inaccurately seized upon 6.5%, a number discussed during the meeting as an example, but not as an aggregate average," Mahoney wrote.

During Wednesday’s meeting, Masters also cited the e-mails issue in explaining his desire for an investigation of Mahoney.

He said, "And secondly is that we currently have some e-mails floating and coming from executives of SCRA from home computers, which indicates a breach of security within our organization."

None of the other executive committee members said anything about a probe of Mahoney’s actions.

But, attending the meeting by conference call, committee member Larry Wilson, a venture capitalist who once led the former Policy Management Systems Corp., said, "I think it’s also important to point out that the home computers involved no classified information or anything related to contracts."

Said Masters, "Larry, it was my e-mails and I considered them confidential and classified."

Asked to respond to Masters’ comments after the meeting concluded, Mahoney told The Nerve, "I have no comments. You’re excused."

Masters, answering questions from The Nerve, said the resolution was not tied to a pay increase for Mahoney. "He’s already gotten his big raises," Masters said.

How much?

"I can’t say. You would be impressed."

Mahoney’s salary in the state database was $237,100 as of Aug. 2.

Also in his answers to The Nerve, Masters described the Research Authority’s executive committee as "a shadow board."

Reach Ward at (803) 254-4411 or eric@thenerve.org.

Accountability Economic Development SCRA Series State Agencies Transparency