Haley Staffers, Senator, Commerce Flack Attend Air Show

August 2, 2011

Investigative Reports

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The NerveA large South Carolina delegation to the Paris Air Show in June included two mid-level employees in Gov. Nikki Haley’s office, the then-spokeswoman for the S.C. Department of Commerce and state Sen. Hugh Leatherman, according to documents obtained from Haley’s office.

The records, acquired by The Nerve using the S.C. Freedom of Information Act, help fill in details about the Palmetto State contingent at the air show and a trade mission to Germany immediately following the event.

But the documents do not provide a complete picture of the overseas economic development excursion, perhaps most importantly for state taxpayers the total cost of it.

For a story by The Nerve previewing the taxpayer-funded junket, Haley press secretary Rob Godfrey did not acknowledge or respond to emailed questions.

Those included who was going on the trip, the official business to be conducted on it, the overall expense of it, and what South Carolina taxpayers could hope to get in return for their money.

When the trip concluded, The Nerve submitted a request pursuant to the open-records law seeking the answers from Haley’s office after Godfrey had refused to provide them beforehand.

The office produced 83 pages of documents, which Haley’s chief legal counsel, Swati Patel, described in writing as “responsive” to the request.

But only a small fraction of the total cost of the trip can be gleaned from the documents, because they do not include expenses for most of the South Carolina delegation; nor, presumably, all expenses incurred by the members of the group from Haley’s office.

Similarly, much of the delegation’s schedule was blacked out on itineraries The Nerve asked for as part of its Freedom of Information Act request.

In her written response, Patel cited sections of the law that allow for “proprietary information” related to “economic development or contract negotiations” to be kept confidential, along with materials “relative to efforts or activities of a public body to attract business or industry to invest within South Carolina.”

Nevertheless, the documents released do reveal some big pieces of the puzzle, as well as some interesting nuggets.

For South Carolina, the backdrop to the Paris Air Show, held June 20-26 in the French capital, was Boeing’s decision in 2009 to locate an assembly plant in the Charleston area for the company’s next-generation 787 jetliner.

Now operational, the facility is widely acclaimed as an economic development golden goose for the Palmetto State. But, while it is boosting South Carolina’s economy, the aircraft fabrication plant also came with a heavy price for taxpayers in the form of state and local incentives.

And, along those lines, some of the goings-on at the Air Show point up intricate connections in the ever-evolving economic development axis between state government and the multinational corporate world, replete with lobbyists, lawyers and lots of wining and dining.

The records obtained under the Freedom of Information Act show that a sizeable cohort of state and local officials took part in the trip to the air show and the trade mission to Germany.

From Haley’s office they included Haley and her husband; Taylor Hall, who is Haley’s Cabinet liaison; and Rebecca Schimsa, who is special assistant to Haley’s chief of staff, Tim Pearson.

Airfare expenses for those four members of the delegation, and at least roughly $540 in meals, were the only costs disclosed in the records Haley’s office provided.

The four’s plane tickets to and from Europe cost $1,529 each, plus a little more than $1,900 for Haley’s plane travel on the Germany leg of the trip.

That’s about $8,000 in airfare, although The State newspaper reported in late May that Haley’s husband would “pay his own way.”

“The state anticipates paying $52,830.58 in coach airfare and accommodations for Haley, (Commerce Secretary Bobby) Hitt and staff members to attend the Paris event, according to the state Department of Commerce,” The State’s report said.

Godfrey, Patel and Pearson did not respond to an email seeking confirmation of who paid for Haley’s husband’s airfare.

In addition to Hitt and former Commerce spokeswoman Kara Borie, four other high-ranking officials from the agency were among the South Carolina delegates, according to the documents from Haley’s office: George Patrick, Ford Graham, Wayne Fritz and Ian Forbes-Jones.

Patrick is listed as the department’s chief of staff in a state salary database on the S.C. Budget and Control Board website. A “Paris Air Show Contact List” in the documents lists him as deputy commerce secretary.

Graham is a program manager for the agency and Fritz is an economic development division manager for Commerce, according to the Budget and Control Board salary table. Forbes-Jones is not listed in the database.

Jack Ellenberg, vice president for cargo development at the State Ports Authority, also was part of the South Carolina delegation on the trip.

Leatherman, R-Florence, appears to be the only representative from the legislative branch of state government among the delegates.

Chairman of the state budget-writing Senate Finance Committee, Leatherman is perhaps the General Assembly’s biggest and most powerful champion of incentives-driven economic development.

In the run-up to the Paris Air Show, Leatherman announced on the Senate floor that he was trying to rearrange his schedule to go. “Because I believe with Boeing locating here, that we stand a golden opportunity – South Carolina stands a golden opportunity – of getting Boeing suppliers to locate here,” he said.

On the itineraries, Leatherman’s name is listed among anticipated attendees at several events.

As for local officials, the “Paris Air Show Contact List” features the names of 10 people mostly from regional economic development groups across the state.

Columbia Mayor Steve Benjamin also attended the air show. Benjamin recently voluntarily reported his costs for the trip, saying they totaled about $4,000. Columbia City Council had authorized him to spend up to $6,000 on it.

While she was on the trip, Haley released a YouTube video from the air show touting a “buzz” at the event regarding South Carolina’s “business-friendly” environment.

In the video Haley says in part:

“Since Boeing has come to South Carolina, we have got so many suppliers that are looking to do business here. And I will tell you that along with Michelin and GE that we met with today, everything is all abuzz about how great our trained workforce is, how the cost of doing business is low, and how we continue to get more business friendly. They’ve seen our fights against the unions. They understand that we’re trying to do great things to create a business environment.”

A news release on the governor’s office website shows a somewhat different version of that quote.

Like Boeing, General Electric and Michelin employ registered lobbyists at the State House.

In this year’s legislative session, Boeing retained four lobbyists. One of them, former Columbia Mayor Bob Coble, works for the go-to economic development law firm in the Palmetto State – Nexsen Pruet.

Headquartered in Columbia across the street from the State House, Nexsen Pruet represented Boeing in its negotiations with the state to obtain an incentives package that vies for the largest corporate welfare dish the state has ever served up.

Conservatively, the incentives total a minimum of approximately $500 million, according to an investigative series The Nerve published upon its launch in January 2010.

Some estimates put the total at closer to $900 million.

The giveaways to the multinational aerospace and defense industry giant, which regularly reports billions in annual revenues, include $270 million in “free” proceeds from bonded debt the state issued that South Carolina taxpayers must cover with interest.

On its website, Nexsen Pruet proclaims “a pivotal role” in bringing Boeing to South Carolina.

One of the events at the air show was a reception for the South Carolina delegation. The sponsors of the reception included Boeing and Michelin, the itineraries show.

Michelin, in fact, held its own reception for a select group of the Palmetto State’s delegation: the Haleys, Hitt, Ellenberg, Leatherman and two of the other Commerce officials.

An invitation to the Michelin reception says, “You and a guest are invited to enjoy delicious French cuisine made by the Chefs Pourcel and admire the beautiful view over Paris at the prestigious restaurant located on the rooftop of the Theatre des Champs Elysees.”

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