S.C. Research Authority’s FOIA Fail

April 12, 2011

Investigative Reports

Print Friendly, PDF & Email

The NerveSouth Carolina’s Freedom of Information Act law doesn’t include a specific time limit for public bodies to turn over open records, but it would seem safe to assume that 140-plus days is ample time.

That’s how long it’s been since The Nerve sent the S.C. Research Authority a FOIA request seeking details regarding all bonuses paid to executives of SCRA and its affiliates between Sept. 30, 2008, and Nov. 19, 2010.

The Nerve also requested a copy of the Research Authority’s Form 990 filed with the Internal Revenue Service for the year ended June 30, 2009.

While the SCRA did provide a copy of the IRS form within 15 business days of the request, made on Nov. 19, 2010, Chief Executive Bill Mahoney responded that the bonus data requested was under review and would be addressed in the normal course of SCRA business.

More than four months later, the agency has not only failed to provide any information pertaining to bonuses, it has ignored inquiries from The Nerve seeking an update on the status of the FOIA request.

Bill Rogers, executive director of the South Carolina Press Association, of which The Nerve’s parent – the South Carolina Policy Councilis an associate member, called the Research Authority’s delay “egregious.”

“The law says they have 15 days to respond to a request and then to provide the information within a reasonable time afterward; this is not a reasonable time,” Rogers said. “This is a ridiculous delay. The question is, what are they trying to hide here?”

Rogers added that a delay is permissible if information has to be researched.

“But I can’t imagine that researching this sort of information would take more than 30 minutes,” he said. “If it does, they’ve got bookkeeping problems. The public has a right to know, and not six months later.”

Rogers added that the salaries of state employees, including bonuses, most definitely fall under the category of public information.

Earlier this year, Rep. Bill Taylor, R-Aiken, introduced a bill that would, among other things, require public records to be furnished or made available for inspection or copying within 30 days after the date of a formal request. The bill, H. 3235, was referred to the Judiciary Committee in mid-January, where it languishes.

Comparing Apples and Orangutans

The issue of bonuses for SCRA executives is significant because last fall a controversy arose over a Research Authority proposal to dole out hefty raises, despite the condition of the state’s budget.

Last Sept. 30, SCRA’s executive committee approved a plan to enact a largely across-the-board 6.5 percent pay increase for its 240 employees, an action reported by The Nerve and other media outlets, including The Associated Press and the Greenville News.

Days later, though, Mahoney backtracked, claiming the media erred in its reporting.

He sent SCRA employees an email stating that salary adjustments were calculated for just 97 employees – rather than for all SCRA employees – and those increases ranged as high as 9 percent.

That, despite the fact The Nerve videotaped the meeting in question, and the tape showed Mahoney telling SCRA Chairman Bill Masters the increase would be approximately 6.5 percent across the board for all employees for the first year, and, if approved, nearly 20 percent total over three years.

The increase went into effect a short time later.

The salary boost stems from a recommendation of a management consulting firm, Philadelphia-based Hay Group. According to the Hay Group, the Research Authority ranked in the 25th percentile among peers in terms of what it pays.

To remain competitive, SCRA needed to raise its compensation so that it would be closer to the 50th percentile, the Hay Group reported.

But Masters pointed out that the SCRA’s compensation ranking did not include the hefty bonuses handed out to top execs, meaning the Hay study wasn’t giving an accurate picture of how the agency ranked in comparison to its peers.

While the Research Authority has yet to turn over bonus information for the entire period requested by The Nerve, the IRS 990 form it provided for fiscal year 2009 included bonus data on a handful of top executives. That data showed that:

  • In addition to Mahoney’s salary of $218,521, the SCRA’s CEO received bonus and incentive compensation of $92,582, other reportable compensation of $14,685, deferred compensation of $24,821 and non-taxable benefits of $11,486. That works out to total compensation of $362,095, according to information found in the agency’s IRS filing.
  • Robert Kiggans, the then-chief operating officer of the agency, received a salary of $154,751, along with bonus and incentives valued at $63,674, other compensation worth $45,335, deferred compensation of $20,775 and non-taxable benefits of $5,345. His total earnings for fiscal year 2009 were $289,880.
  • Chief Financial Officer Julia Martin earned more than $140,000 in salary, and also received bonus and incentives worth $54,435, other compensation valued at $15,278, deferred compensation of $18,503 and non-taxable benefits of $14,719. Her total for the year was $243,655.
  • John Gregg, executive vice president and general manager, netted a bonus of $50,715 to go with his $146,580 base salary. His total compensation for fiscal year 2009 was $254,961.
  • David McNamara, the director of SCRA affiliate SC Launch, earned $126,009 in base salary, and also got a bonus of more than $50,000. His total compensation for the year in question was $204,359.

SCRA officials have declined to release copies of the Hay study, saying the details could hurt the agency’s ability to compete.

In fact, Masters has said he was not allowed to keep a copy of the Hay Group study, either. He was allowed to review it during a SCRA compensation committee meeting, but management would not let him take it with him to review afterward, he told The Nerve.

The Research Authority, founded in 1983, can best be described as a state-created and controlled technology and real estate company. It specializes in applying research to commercial uses, but for the most part does not perform such technical work itself.

Rather, it acts much like a general contractor, winning bids on projects – many of them from federal agencies and the U.S. military – and bringing subcontractors and other partners together to execute the work outlined in its contracts.

It is also a key player in South Carolina’s state-devised “knowledge economy” development plan, which was laid out in a July 2008 press conference that featured S.C. House Speaker Bobby Harrell, R-Charleston, other legislative leaders and business executives.

The agency was started in 1983 with $500,000 and 1,400 acres of land, and in addition to having received additional land grants since then, Research Authority-affiliate SC Launch gets funding from the state’s Investment Partners Fund. Donations to the fund are good for a 100 percent, dollar-for-dollar credit against state taxes.

Masters resigned last month, citing in a letter to Gov. Nikki Haley a number of troubling allegations, including that the Research Authority is run mostly for the benefit of top management; it manipulates government contracts and data to pass audits; and board trustees are allowed to have input into issues and decisions from which they benefit without having to disclose their affiliations.

Masters has also questioned the veracity of data provided by SCRA top management to board trustees, high management salaries, and whether the agency funds jobs that go to other states.

Haley, whose office did not respond to an inquiry from The Nerve seeking comment, has yet to name a replacement for Masters.

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