High-paid lobbyists pushing SCRA legislation

February 21, 2019

Investigative Reports

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By RICK BRUNDRETT

In 2016, Senate Finance Committee chairman Hugh Leatherman introduced a bill that would have allowed the South Carolina Research Authority – a state-created, multimillion-dollar nonprofit whose governing board included Leatherman – to double its main funding source.

The legislation never made it out of the Florence County Republican’s committee. A year later, a similar bill whose main sponsor was Leatherman passed the Senate but died in a House committee.

In this legislative session, the Senate and House each have passed their own versions of the bills. The Senate version would raise the annual total tax-credit cap for the “Industry Partnership Fund” (IPF), which offers a dollar-for-dollar state tax credit to contributors, from $6 million to $12 million through 2024. The House version, which is now before Leatherman’s committee, would increase the cap to $9 million with no sunset provision.

Working behind the scenes on the SCRA legislation are several of the state’s highest-paid lobbyists, who collectively represent major corporations, trade associations and government groups, records reviewed by The Nerve show. Total annual lobbying expenses reported by SCRA soared from $312 in 2015 to $74,104 last year, according to State Ethics Commission records.

SCRA lobbyists last year included:

  • Former longtime Republican House member Harry Cato, currently a consultant with the Nelson Mullins law firm;
  • Nelson Mullins lawyers Edward Poliakoff, who heads the firm’s state government relations group, and Dwight Drake, who worked for former governors Richard Riley – now a Nelson Mullins senior partner – and John West, and was a 2010 Democratic gubernatorial candidate; and
  • Jason Puhlasky and Vicki Parker with the Parker Poe Consulting firm.

“We’re working on it,” Drake said about the current SCRA legislation when contacted Thursday by The Nerve, adding, “It’s likely to be passed.”

Drake’s, Poliakoff’s and Cato’s reported lobbying income last year totaled $322,641, $193,433 and $164,242, respectively, Ethics Commission records show. Among other clients, Drake represented Walmart and state-owned utility Santee Cooper, while Poliakoff’s clients included State Farm Insurance and Richland County. Cato’s clients included the American Progressive Bag Alliance, which represents plastic bag manufacturers; and Florida-based NextEra Energy, which expressed interest in buying Santee Cooper.

All three are registered lobbyists for SCRA this year, according to Ethics Commission records.

Puhlasky, whose clients included the Consumer Healthcare Products Association and the Municipal Association of South Carolina, had $385,811 in total reported lobbying income last year, Ethics Commission records show. Parker, whose reported lobbying income totaled $221,601, represented SCANA Corp. and the South Carolina Hospital Association, among other clients.

In a Nerve story last week, SCRA spokeswoman Jessica Cokins said SCRA representatives have been “in discussions with legislators about the importance of increasing from $6 million to $12 million the annual tax credit cap,” and that the Industry Partnership Fund is “critical to the SCRA’s execution of its mission.”

Created by lawmakers in 1983, the Columbia-based SCRA “fuels South Carolina’s Innovation Economy by supporting entrepreneurs, enabling academic research and its commercialization, and connecting industry to innovators,” according to the organization’s website.

Under state law, the research authority is governed by a 24-member board of trustees that includes the presidents of state universities, the governor or his designee, and the chairmen of the budget-writing House Ways and Means and Senate Finance committees or their designees.

The IPF is used by SCRA’s nonprofit affiliate, known as SC Launch Inc., to provide grants and loans to qualified startup companies in South Carolina in the “life sciences, information technology, and advanced manufacturing and materials sectors,” the website says.

For the fiscal year that ended last June 30, SCRA took in about $6.6 million in contributions and grants – the single-largest income source out of approximately $12.9 million in total revenues, according to its federal income-tax return. SCRA, which has four “Innovation Centers” in the state, also is a landlord: About $3.1 million, or approximately 24 percent, of the total revenues last fiscal year was rental income.

The Nerve reported last week that since fiscal 2015, the S.C. Department of Commerce had paid a total of more than $2.9 million to SCRA, which listed $69 million in net assets as of June 30. The SCRA board includes Commerce secretary Bobby Hitt.

SCRA pays its top executives well: Last fiscal year’s income-tax records show that executive director Bob Quinn received $281,428 in total compensation, including $248,998 in base salary, $15,000 in “bonus and incentive compensation,” and $17,430 in “retirement and other deferred compensation.” Nine other executives received total compensation ranging from $146,336 to $212,669.

Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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