SCRA Intransigence Highlights State’s FOIA Flaws

June 23, 2011

Investigative Reports

Print Friendly, PDF & Email

The NerveMore than half a year after The Nerve submitted an S.C. Freedom of Information Act request to the state agency charged with developing South Carolina’s “knowledge-based economy,” officials with the S.C. Research Authority say they’re ready to comply.

SCRA Chief Executive Bill Mahoney’s reply came Tuesday, a day after The Nerve sent an email to the Research Authority detailing the fact that SCRA has failed to fulfill a Freedom of Information Act request sent in November 2010 that sought details regarding bonuses paid to executives of the agency and its affiliates for a 26-month period between 2008 and 2010.

The Nerve’s June 20 note to SCRA stated that if The Nerve didn’t receive a response from Mahoney or someone else at the state agency by the end of the following day, The Nerve would be forced to assume that the Research Authority intended to be in willful noncompliance, a potential criminal violation, with the state’s FOIA law and would contact its attorney to discuss further action.

By midday June 21 Mahoney had responded: “SCRA intends to provide the additional requested compensation information by the end of next week.”

Stay tuned on that note.

A larger issue is that South Carolina’s FOIA law doesn’t specify a time period by which government bodies have to turn over public documents, said Columbia media attorney Jay Bender.

“Public bodies will say you can have the records, but then they never get around to giving up those records,” he said. “If the party seeking the records can’t afford to seek legal redress to force the public body to turn over the records, they’re often out of luck.”

It’s difficult to determine the S.C. Attorney General’s stand on prosecuting FOIA violations. Attorney General Alan Wilson’s office declined to respond to interview requests from The Nerve seeking comment on the issue.

However, Rep. Bill Taylor, R-Aiken, said he plans to push hard for passage of a bill he co-sponsored that would strengthen the state’s Freedom of Information Act when the General Assembly returns in January.

Flaws in the state’s open-records law became apparent shortly after The Nerve filed its FOIA request last year.

SCRA replied within 15 business days, as required by law, that the bonus data was under review and would be addressed “in the normal course of SCRA business.” However, subsequent efforts to secure the data from the agency fell on deaf ears.

The question of bonuses took on particular importance when a controversy arose last year over an SCRA plan to dole out hefty raises.

In late September during a board meeting, the Research Authority approved a proposal to enact a largely across-the-board 6.5 percent pay increase for its 240 employees, an event reported by The Nerve and other media outlets.

Days later, though, Mahoney backtracked, claiming the media had erred in its reporting. According to a letter Mahoney sent to SCRA employees, salary increases were calculated for 97 employees – rather than for all SCRA employees – and those adjustments ranged as high as 9 percent.

However, The Nerve videotaped the meeting in question, which showed then-SCRA board Chairman Bill Masters asking Mahoney directly, “What percent raise are we talking about giving out? Is it across the board or weighted toward one group?”

Mahoney told Masters, who would later resign over his inability to bring openness and transparency to the agency, that 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 salary boost proposal stemmed from a management consulting firm recommendation. To remain competitive, the Research Authority needed to raise its compensation closer to the 50th percentile, according to the consulting firm.

However, SCRA’s compensation ranking did not include hefty bonuses handed out to many top executives, Masters said.

The Nerve was able to learn that during fiscal year 2009, the most recent information available, several key SCRA officials took home bonus pay and benefits that far exceeded the annual incomes of most South Carolina state employees. Those included:

  • Mahoney, the CEO, who received in addition to a salary of $218,521, 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 for total compensation of $362,095, according to information found in the agency’s Form 990 filing, submitted to the Internal Revenue Service.
  • Robert Kiggans, the then-chief operating officer of SCRA, 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 pulled in 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, got a bonus of $50,715 to go along with his $146,580 base salary. His total compensation for fiscal year 2009: $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 fiscal year 2009 was $204,359.

In all, the above five individuals earned a total of more than $310,000 in bonuses alone during the fiscal year ended June 30, 2009, or an average of more than $60,000 apiece. By comparison, annual income for the average South Carolinian is less than $32,000, according to University of South Carolina economists Doug Woodward and Joey Von Nessen.

None of this would be known to most South Carolinians, however.

The SCRA is a state-created and controlled technology and real estate company. Acting much like a general contractor, the Research Authority specializes in forming partnerships to commercialize scientific and technological research. The SCRA is also a key player in efforts by the state and some local governments in South Carolina to develop a “knowledge-based economy.”

Begun in 1983 with a gift of $500,000 and 1,400 acres of state land from the General Assembly, the Research Authority is a largely below-the-radar operation. While information on its employees who earn more than $50,000 annually can be found in the state salary database, those figures don’t include such items as bonuses and other forms of compensation.

Hence the Freedom of Information Act request by The Nerve, submitted on Nov. 19, 2010, seeking additional compensation data. Until Tuesday, Mahoney declined to respond to all phone calls and emails from The Nerve since initially replying to The Nerve’s FOIA last year.

However, recent developments may force government bodies bent on intransigence to rethink that stance.

Earlier this month, the S.C. Supreme Court ruled that the nonprofit Friends of the Hunley would have to pay Greenville businessman Ned Sloan’s attorney’s fees because it initially refused to comply with the state’s open-record laws.

Under the S.C. Freedom of Information Act, Sloan sued the group in 2001, seeking a list of documents pertaining to the Friends of the Hunley’s corporate structure and legal relationship with the Hunley Commission, a state agency.

The Friends of the Hunley, dedicated to the recovery and conservation of the Confederate submarine H.L. Hunley, denied that it was subject to FOIA even though it had received public money, and declined to produce the documents for Sloan.

Eventually, the Friends of the Hunley agreed it was subject to the Freedom of Information Act. Sloan and his attorneys then sought nearly $140,000 to cover their legal expenses.

The state’s high court, in a ruling handed down last week, wrote that permitting an agency to avoid attorney fees by disclosing the documents after the plaintiff has been forced to file a lawsuit would undercut the policy behind the act.

However, it reversed the award of fees beyond the time Friends of the Hunley produced the requested documents, cutting Sloan’s awarded fees to just under $6,500.

What many people, including some government officials, don’t know about the state’s Freedom of Information Act is that violations can carry criminal penalties.

In May, three current and one former Holly Springs Fire and Rescue District commissioners went on trial in the first criminal prosecution under the state’s Freedom of Information Act.

While a jury found that the four acted out of ignorance rather than a willful desire to violate the state’s open-meeting law, Bill Rogers, executive director of the South Carolina Press Association, told the Spartanburg Herald-Journal that the case “sends a message statewide that public officials can be held accountable by citizens if they don’t follow the law.”

A conviction can carry a penalty of 30 days in jail or a $100 fine.

H. 3235, the bill introduced by Taylor, the Aiken Republican, would require immediate compliance regarding requests if the information is designated “public,” and would require all requests be fulfilled within 30 days of the date of the request.

Taylor said his bill is designed specifically to deal with issues like SCRA’s unresponsiveness in turning over public records.

“It’s the right of every citizen to have access in a timely fashion to the information that they want from government,” he said. “The idea of dragging things out, as government agencies can do, is wrong and this bill is an attempt to do something about that.”

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