New Carolina: Lots of Talk, Few Results

February 5, 2010

Investigative Reports

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The Nerve“We, the tenacious people of New Carolina, declare independence from mediocrity. We will reach beyond past mistakes and build on historic successes toward a bright future that lifts our families, our schools, our businesses.”

So begins the self-labeled “manifesto” of the Columbia-based nonprofit organization known as South Carolina’s Council on Competitiveness, which also goes by the name “New Carolina.”

The group, formed in 2004, describes itself as a public-private partnership “working to increase per capita income and enhance South Carolina’s economic competitiveness through a cluster development strategy.”

It has a slick Web site (www.newcarolina.org) and touted itself last fall in a special full-four-page Sunday advertisement section in The State newspaper.

Movers and shakers in the South Carolina business, government and education communities sit on its 11-member executive committee and 28-member council. Leaders in its various industry “clusters” are called “champions” or “co-champions.”

Gov. Mark Sanford is an honorary member, and S.C. House Speaker Bobby Harrell, who has listed the group as a player in his “strategic framework” for a “knowledge economy,” also has an ex-officio “designated” board seat.

University of South Carolina benefactor and trustee Darla Moore, after whom the business school is named, is on New Carolina’s executive committee.

A “cluster,” according to New Carolina’s definition, is a group of companies in a similar line of business that “collaborate to improve competitiveness.” The concept is pushed by Harvard University business professor Michael Porter, who recommended the formation of New Carolina.

A favorite phrase of New Carolina is to “find, birth, build and celebrate clusters.”

But for all of its feel-good, flowery language, New Carolina’s literature makes no mention of any specific jobs or businesses that have come to South Carolina through the “cluster” strategy.

And New Carolina has lived off hundreds of thousands of state tax dollars over its five-year existence, an analysis by The Nerve found.

In fiscal years 2006 through 2008, the organization received a total of $905,000 in government funding, according to its federal tax returns for those years. The forms don’t specify which agencies provided the money, but state records show at least $800,000 of it came from the state Department of Commerce in little-noticed budget provisos in fiscal years ’07 and ’08.

The percentage of public money skyrocketed to 52 percent of total revenues in 2006-2007 from 14 percent in 2005-2006, though it dropped to 37 percent in fiscal year 2008. During that time, Executive Director George Fletcher’s total compensation rose to $156,494 from $140,000, a 12-percent increase, the federal tax returns show.

New Carolina has not yet filed a copy of its federal tax return for fiscal year 2009 with the S.C. Secretary of State’s office, said agency spokeswoman Renee Daggerhart. It was due in November, but the organization was granted an extension to May 15, she said.

In a written response to The Nerve, New Carolina Executive Director George Fletcher said his organization received no tax dollars last fiscal year and will receive none this year for “operational support.”

He said the engineering “cluster” last fiscal year received about $43,000 from the state Department of Education and expects to receive another $31,500 grant from the department this fiscal year.

Although it aims at promoting a “winning economy” in South Carolina, Fletcher said his organization does not “make projections about job creation under the cluster concept.”

“Our overall goal, on a 20-year horizon,” he said, “is to raise per (capita) income in South Carolina faster than the (Consumer Price Index) rises nationally.”

In 2007, South Carolina ranked 47th in the nation with a per-capita income of $31,013, according to the U.S. Bureau of Economic Analysis.

Much of Fletcher’s response to The Nerve mirrored the vague language in his organization’s literature. Here’s a sample: “We work collaboratively to connect the dots across sectors, organizations and people sharing common objectives, to increase efficiency and productivity We steer task forces to enhance education and workforce development, increase support for innovation and entrepreneurship, and tackle issues in distressed areas.”

In a written response to The Nerve, Department of Commerce spokeswoman Kara Borie confirmed the $800,000 her agency provided to New Carolina, though she noted her agency is “not aware of any additional funding in the last fiscal year or current fiscal year.”

Borie did not answer additional questions about why the department provided funding to New Carolina.

Commerce Secretary Joe Taylor is a member of New Carolina’s executive committee, according to the organization’s literature. Borie said her boss is an ex-officio board member “by virtue of the position.”

S.C. Department of Education spokesman Jim Foster said the $43,000 grant from his department is aimed at “promoting engineering careers with an emphasis on improving math and science education.”

Education Superintendent Jim Rex is an ex-officio board member, Foster said, adding his boss’ role is to “represent the interests of K-12 public schools.” He also said his agency’s chief of staff and an office director are members of New Carolina’s Education and Workforce Committee.

University of South Carolina President Harris Pastides, Clemson University President James Barker, Medical University of South Carolina President Raymond Greenberg and S.C. Technical College System President Barry Rusell also have ex-officio “designated seats,” according to New Carolina’s literature.

Spokespersons for the Medical University of South Carolina and the S.C. Technical College System told The Nerve their agencies do not contribute money to New Carolina.

Clemson University spokeswoman Robin Denny confirmed information provided by Fletcher that the university last fiscal year gave $6,079 to New Carolina.

In a written response to The Nerve, she said the university used a National Science Foundation grant to work with New Carolina to “document the extent of the medical device network in the region, develop a brochure and distribute it in order to market the efforts of companies and Clemson in this area.”

The university and the university’s foundation also each gave a $2,000 “sponsorship” to New Carolina in 2007 and 2008, respectively, Denny said.

Reach Brundrett at (803) 779-5022, ext. 106, or rick@scpolicycouncil.com.