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Masters Sounds Concerns on SCRA in E-Mail

Outgoing S.C. Research Authority Chairman Bill Masters continues to sound a steady drumbeat of concern regarding the state-created agency.

Monday, he sent out an e-mail questioning the direction of the agency, touching on a number of different issues, including the veracity of data provided by SCRA top management to board trustees, high management salaries, SCRA’s accounting practices and whether it funds jobs that go to other states.

According to Masters’ e-mail, obtained by The Nerve, meetings of the agency’s executive committee and its full board of trustees, both scheduled for Feb. 17, were canceled early last week.

Masters writes that SCRA Chief Executive Bill Mahoney has ignored his recent requests to discuss concerns regarding the organization; therefore, he wrote that he had no recourse but to address his misgivings through the e-mail after the meetings had been called off.

It is unclear how many people Masters sent his e-mail to or to whom exactly it was sent.

"The lack of transparency and the unanswered questions by top management leaves me no choice but to insist that the governor, the Legislature and the public demand to know more about SCRA, its mission and its value to South Carolina especially during these tough economic times," Masters writes.

One of the most damning allegations in Masters’ e-mail is his assessment of top management: "In my opinion as chairman and trustee, the top management of SCRA is simply spinning the data and is not trustworthy enough to give all the trustees complete and clean information with which to do our jobs."

Mahoney did respond to an inquiry from The Nerve seeking comment.

As an introduction, Masters states that he’s been chairman for almost two years and has been trying to resign for four months, but will only be able to be relieved "once citizens get involved."

He officially submitted his resignation to Gov. Nikki Haley earlier this month, but is staying on until a replacement is named.

The "problem is what I see as a cover-up of many jobs and resources that should be refocused to South Carolina," he writes. "If any of this letter rings true then please pass it onto your e-mail list and encourage the Legislature to dig deeper. It appears many people have their finger in the pie so rocking the boat is not acceptable."

The Research Authority, founded in 1983, can best be described as a state-created and controlled technology and real estate company.

SCRA specializes in applying research to commercial uses, but for the most part does not perform such technical work itself. Rather, it acts much like a general contractor, winning bids on projects – many of them from federal agencies and the U.S. military – and bringing subcontractors and other partners together to execute the work outlined in its contracts.

It is also a key player in South Carolina’s state-devised "knowledge economy" development plan, which was laid out in a July 2008 press conference that featured S.C. House Speaker Bobby Harrell, other legislative leaders and business executives.

Who Benefits?

Last week, The Nerve detailed the fact that SCRA has, at present, far more job openings out of state than in South Carolina. Masters appended The Nerve story to his e-mail.

A glance at SCRA’s employment opportunities page last week showed 22 openings. Fully 18 of those – or nearly 82 percent – were for positions at Fort Leonard Wood, Mo. The other four were in Charleston. This runs counter to objectives laid out in the agency’s enabling legislation, including:


  • Increasing employment opportunities for South Carolinians;

  • Developing the human, economic, and productive resources of South Carolina; and

  • Promoting and encouraging expansion of the research and development sector, with emphasis on capital formation and investments … in South Carolina.


When the Research Authority was begun, the state gave it $500,000 and about 1,400 undeveloped acres. At that time, more than 25 years ago, the land was estimated to be worth about $10.7 million, according to a 2005 review of the SCRA by the state Legislative Audit Council.

 

Since then it has received additional land grants from the state, including more than 100 acres in Richland County in 2009.

SCRA gets other taxpayer support, as well. For one thing, the Research Authority is exempt from income, sales and property taxes.

Also, the Industry Partners Act of 2006, which led to the creation of the SCRA affiliate SC Launch, created the Industry Partners Fund. That fund provides working-capital seed grants to new technology companies.

Donations to the Industry Partners Fund are good for a 100 percent, dollar-for-dollar credit against state taxes, which means money is diverted from the state’s general fund – $6 million, the maximum, last year alone.

The Legislature’s top four leaders – Harrell, R-Charleston; House Ways and Means Committee Chairman Dan Cooper, R-Anderson; Senate President Pro Tempore Glenn McConnell, R-Charleston; and Senate Finance Committee Chairman Hugh Leatherman, R-Florence – did not return calls from The Nerve.

Haley’s office also did not respond when called for comment.

Masters’ resignation letter, dated Feb. 1, included an accompanying report charging that SCRA has evolved from a scientific research organization into a political organization that uses data and information manipulation to market itself and benefit top management and its allies.

Masters also alleged that SCRA is "run mostly for the benefit of its top management for monetary benefits and for exerting control and power," that the agency spent approximately $600,000 on an investigation directed mostly at Mahoney in 2008, and of questionable dealings concerning some SCRA board trustees.

He also questioned SCRA’s handling of assets, such as bequests of land by the state and state-assigned monies, which he claimed were directed primarily to maximize top-line and bottom-line numbers in order to increase management largesse.

That included possibly selling or booking land to cover losses or increase profits, he said.

Further, Masters asserted that SCRA charges overhead to South Carolina customers at a rate considerably higher than it charges for a large percent of its other contracts whose monies and jobs may not be South Carolina bound.

Dietrich can be reached at (803) 779-5022, ext. 110, or kevin@thenerve.org.

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