S.C. Research Authority Chairman Bill Masters submitted a second and “absolute” resignation letter to Gov. Nikki Haley late last week, informing SCRA board members and legislators of his decision Monday.
Masters handed in his first resignation notice along with a report detailing his assessment of SCRA to Haley on Feb. 1. He had originally planned to wait until a replacement was found, but now will leave the position by March 9 at the latest, according to his latest letter to the governor, obtained by The Nerve.
“Since that [Feb. 1] report the tension within SCRA, both within management and the board, has increased to the level that in my opinion is doing more harm to the state than the long-term good that I had hoped and has effectively curtailed the ability of the board to do its work,” Masters writes to Haley in his second letter.
Masters’ Feb. 1 report to Haley detailed a number of troubling allegations, including that the Research Authority is run mostly for the benefit of top management; it manipulates government contracts and data to pass audits; and board trustees are allowed to have input into issues and decisions from which they benefit without having to disclose their affiliations.
“That report, which I deeply feel to be accurate, has greatly upset the SCRA management and its executive board, and my further involvement is not what is best for the state at this time,” Masters writes in his Feb. 24 letter.
“The CEO [Bill Mahoney] will not even reply to my request to function as chairman and facilitated the cancellation of board meetings and strategy planning sessions, a direct affront to the position of chairman and a telling culture that the next governor-appointed chairman will have to face eventually unless changed,” he adds.
Masters also has questioned the veracity of data provided by SCRA top management to board trustees, high management salaries, and whether the agency funds jobs that go to other states.
Masters cites irony in the fact that his second letter was sent to SCRA trustees on the day scheduled for a “visioning/strategic planning start,” an event he says he had been trying to get the agency to undertake for many months.
Masters, who took over as chairman in mid-2009, writes that it has been more than two years since SCRA held its last such session, and blames Mahoney for the postponement.
“I assume the visioning was canceled for the same reason as the last time, miscommunication to you [the board of trustees] by our CEO about my intentions in order to control the information exchange between us as trustees,” he writes.
Mahoney did respond to an inquiry from The Nerve seeking comment.
Masters said he did not want to comment beyond what was in his correspondence to Haley.
Masters in his most recent letter adds that he had planned on having the trustees and top management address several critical issues, including:
- Does the organization have processes in place for awarding contracts that enable it to maintain arms-length transactions, as in the contract award for master planning of the recent gift of 137 acres in Columbia to SCRA to a state legislator’s engineering company?
- The recent exit of the COO and the above-normal turnover present in SCRA of talented and supposedly well-chosen employees;
- The possible and soon-effected transaction of more than $15 million in assets owned by SCRA, and indirectly by the taxpayers, and the plans for the use of those funds coming into SCRA; and
- The independence and work time of the board.
“In my opinion as chairman and trustee I continue to believe that both the trustees and the CEO are failing to fulfill their full fiduciary duty to the citizens of South Carolina … but instead continue to protect the silos of power and sources of money, a trait that appears to be rooted deeply in the culture of SCRA, its management and trustees,” Masters wrote.
“SCRA could be characterized as a race horse pulling a loaded wagon – there are great opportunities crippled by a command-and-control culture – only an independent and committed board can begin to make a difference,” he added.
Masters also has recently questioned 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.
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, R-Charleston, other legislative leaders and business executives.
The agency was started in 1983 with $500,000 and 1,400 acres of land, and in addition to having received additional land grants since then, Research Authority-affiliate SC Launch gets funding from the state’s Investment Partners Fund.
The Industry Partners Fund was set up a few years ago up to provide working-capital seed grants to new technology companies.
Donations to the fund are good for a 100 percent, dollar-for-dollar credit against state taxes. The maximum overall amount that can go into the Industry Partners Fund is $6 million a year, an amount reached for at least the past two years.
That means millions of dollars that would have gone into the state’s general fund and could have been put toward education and other core services have instead been diverted to SC Launch.
In his most recent letter, Masters urges Haley to choose a chairman who is “not part of the SCRA culture or close to the organization or one that could receive either direct or indirect economic or political gain of any kind.”
“He or she should be a person who is passionate about helping South Carolina move from some of the last positions in which we find ourselves,” he adds.
Reach Dietrich at (803) 779-5022, ext. 110, or at email@example.com