EngenuitySC Reaps Public Funds, Shows Little Return

March 31, 2010

Investigative Reports

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The NerveEngenuitySC has been one of Columbia’s higher-profile economic development organizations and, at the same time, one of its less-transparent.

Formed in 2003, EngenuitySC has positioned itself as a key player in South Carolina’s knowledge-based economy initiative, a push that is being shepherded largely by state and local government officials, rather than entrepreneurs and businesses.

Heavily involved in the National Hydrogen Association Convention held in Columbia a year ago, for example, EngenuitySC received $200,000 from the General Assembly for the event, money that was passed through the University of South Carolina.

That amount represented just a fraction of the public dollars the organization has received over the past half decade. EngenuitySC has received money from the city of Columbia, Richland County, Midlands Technical College and the U.S. Department of Housing and Urban Development, as well.

Since 2004, the organization has received more than $2.5 million in public funding, according to information secured through a S.C. Freedom of Information Act request.

More than $850,000 of that came from the city of Columbia, including nearly $250,000 during 2009 while the city was struggling with a significant budget shortfall and was forced to lay off employees.

EngenuitySC is a nonprofit that describes itself as a public-private partnership. Its goal is to build a more vibrant economy that will improve per capita income and the quality of life, according to information found on the company’s Facebook page.

Among its initiatives: The USC Columbia Fuel Cell Collaborative, a collaboration between itself, USC, the city of Columbia and the S.C. Research Authority; the Greater Columbia Fuel Cell Challenge, an initiative of the USC Columbia Fuel Cell Collaborative; the Future Fuels Program, described as a research priority at USC; and the Fuel Cell District, located in an area near the Columbia Vista.

Also, EngenuitySC contributed $325,000 to the hydrogen fueling station that opened last year in Columbia, money that came from a federal grant, according to Russ Keller of the S.C. Research Authority.

Despite the influx of taxpayer dollars, EngenuitySC has rarely been required to show a return on the public’s investment. EngenuitySC’s Web site lauds the organization’s initiatives, along with the attributes of the city of Columbia and USC, but is short on real accomplishments.

EngenuitySC did pocket more than $125,000 for its role in marketing the 2009 National Hydrogen Association Conference and Hydrogen Expo, held in Columbia.

In all, EngenuitySC listed payments totaling $373,366 for the event, meaning its share represented nearly 34 percent of all marketing expenditures it paid out for the four-day affair.

And, according to a list of public funding sources secured through the Freedom of Information Act request, EngenuitySC received a total of $391,658 in public money intended for the event, leaving $18,292 unaccounted for.

The organization’s board membership is made up of some of the most visible members of the Columbia business and political communities.

According to information on EngenuitySC’s Web site, board members include: Columbia Mayor Bob Coble, USC President Harris Pastides, former PMSC chief Larry Wilson, state Sen. Nikki G. Setzler, state Rep. Joan Brady, Chernoff Newman CEO Lee Bussell and former USC President Andrew Sorenson.

Also listed is the former head of USC’s Innovista research campus, John Parks. Parks resigned in September after the university fired the developer hired to build the private portion of Innovista. USC’s Board of Trustees said it was unaware of Roscoe’s 2002 felony conviction for federal tax evasion. In addition to the $200,000 from the General Assembly, EngenuitySC has received large sums of public money since 2003:

  • The Department of Housing and Urban Development has given more than $1 million to the nonprofit; including $463,000 in 2008 alone;
  • The city of Columbia has given $870,408;
  • Richland County has contributed more than $221,250; and
  • Midlands Tech has added $67,500.

In addition, the USC Research Foundation has given $272,600. A breakdown of private funding sources for EngenuitySC was not available. Officials with the organization could not be reached for comment

EngenuitySC is led by Neil McLean, who has been one of the most vocal proponents of investing in hydrogen research in the Columbia region, despite abundant cost, production and storage problems associated with developing hydrogen as a fuel source.

“It’s like we’re in Silicon Valley at the beginning of the computer age,” McLean told The State newspaper last year regarding the Midlands’ hydrogen technology efforts. “We have the best brains in the world here. Everything can build from that.”

According to EngenuitySC’s Web site, the organization’s management team also includes Kyle Michel. Michel, a former aide to Al Gore, is a lobbyist whose firm, the Columbia-based Kyle Michel Law Firm, has received $180,000 from EngenuitySC over the past few years, according to Opensecrets.org, also known as the Center for Responsive Politics.

Also listed under public relations and marketing is Kim Cox. Cox happens to hold a similar position with Chernoff Newman, the Columbia-based advertising agency that has handled work for Innovista, the S.C. Hydrogen Fuel Cell Alliance and the 2009 National Hydrogen Convention.

Reach Dietrich at (803) 779-5022, ext. 110, or at kevin@scpolicycouncil.com.

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