MY LAST NERVE: Commerce Answers Questions – Sort of

October 17, 2014

Inside Insight

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commerce department‘TRUST US,’ SAYS AGENCY

The idea that employees of Commerce Department are not investment bankers – the idea, in other words, that state bureaucrats don’t have any business providing taxpayer-backed “incentives” to companies they deem worthy – may be catching on at last.

Last week, a challenger in the race for governor criticized Commerce for dumping incentives into a lot of deals that went south – or just never materialized. Commerce fired back by issuing a series of rebuttals to the challenger’s claims.

One positive note in all this: At least the Commerce Department realizes it has a duty to explain itself to the public. Ordinarily, questions about incentives deals – almost always made without any meaningful information revealed to the taxpayers who finance them – are either not answered or answered in the vaguest possible way.

It’s great that Commerce officials will respond to a political candidate about these deals. We’ll see if that courtesy applies to everyone else.

For years, The Nerve has asked for the details of economic development deals in which the company was on the receiving end of any taxpayer-backed incentives – cash incentives, fee-in-lieu-of-taxes agreements, taxpayer-financed bonds, whatever. We usually get the run-around. In one memorable instance, The Nerve was sent from the governor’s office, to the Department of Commerce, to the aid-receiving company itself. The end result: Nobody told us anything.

The curious thing about these latest rebuttal points, though, is that, thanks to the policy of secrecy, we’re expected to take the Commerce Department’s word that their claims are accurate. When they say, for instance, that grants and tax credits weren’t received by a pair of Beaufort County companies because those companies didn’t meet performance goals, how do we know this is true? Maybe it is, but how do we know? We don’t, because the details of the deals were never made public, and they won’t be made public any time soon.

Why cherry-pick projects to comment on while leaving scores of unanswered questions on some of the most high-profile and costly deals? If the department is able to comment on these, surely they can answer questions on all the rest.

There’ve been several attempts over the past few years to force disclosure of these incentive agreements. Twice in 2010 (see also S.206) and again in 2011, Sen. Tom Davis (R- Beaufort) and others tried to require a certain level of disclosure of the proposed economic development deals before the General Assembly is asked to vote up or down on them. These proposals would require continued oversight on whether benchmarks are met by aid recipients or not.

Sen. Shane Martin (R- Spartanburg) and others also took a shot at shedding light on these taxpayer-backed deals. In 2011 he filed a bill that would have prohibited the General Assembly from giving a second reading to any targeted incentives until the Department of Commerce provided a cost-benefit analysis of the subsidies. This bill made it further than the others; it received a subcommittee hearing in the penultimate week of the two-year session – when it had absolutely no chance of advancing.

So, now that incentive deals are part of the election debate, can we expect real answers from Commerce? Don’t bet on it.