SCRA Now Hiring – But Mostly Out of State

February 18, 2011

Investigative Reports

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The NerveCall it mission creep or a basic misunderstanding of the mission, but the S.C. Research Authority – created nearly 30 years ago in part to boost employment in South Carolina – would appear at present to be doing more good for the Missouri Ozarks than the Palmetto State.

A glance at SCRA’s employment opportunities page on its website earlier this week showed 22 openings. Fully 18 of those – or nearly 82 percent – were for positions at Fort Leonard Wood, Mo. The other four were in Charleston.

The previous week, there were 26 openings; the 22 at Fort Leonard Wood, six in Charleston and two in McLean, Va.

That would appear to go against one of the basic tenets behind why the S.C. Research Authority was created. When the agency was begun by the General Assembly in 1983, specific objectives were laid out in the agency’s enabling legislation, including:

  • Increasing employment opportunities for South Carolinians;
  • Developing the human, economic, and productive resources of South Carolina; and
  • Promoting and encouraging expansion of the research and development sector, with emphasis on capital formation and investments … in South Carolina.

To get the Research Authority up and running, the state gave the entity $500,000 and about 1,400 undeveloped acres. At that time, more than 25 years ago, the land was estimated to be worth about $10.7 million, according to a 2005 review of the SCRA by the state Legislative Audit Council.

Since then it has received additional land grants from the state, including 110 acres in Richland County in 2009.

SCRA gets other taxpayer support, as well.

For one thing, the Research Authority is exempt from income, sales and property taxes under its enabling legislation.

And the Industry Partners Act of 2006, which led to the creation of the SCRA affiliate SC Launch, created the Industry Partners Fund. That fund provides the working-capital seed grants to new technology companies.

Donations to the Industry Partners Fund are good for a 100 percent, dollar-for-dollar credit against state taxes, which means money is diverted from the state’s general fund, $6 million alone last year.

Today, the Research Authority can best be described as a state-created and -controlled technology and real estate company.

SCRA specializes in applying research to commercial uses, but for the most part does not perform such technical work itself.

Rather, the Research Authority 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, other legislative leaders and business executives.

The Research Authority currently employs around 240 individuals. It’s not clear how many are based in South Carolina.

On its website, the SCRA touts a $13.7 billion total economic impact since its inception. And, in a Sept. 23 interview with The Nerve, Chief Executive Bill Mahoney said studies by the Moore School of Business at the University of South Carolina put the Research Authority’s job creation total at 15,000 since 1983.

But when asked whether most of the contract work the SCRA farms out goes to South Carolina firms, Mahoney responded, “The answer to that is ‘no.’” Only a minority percentage of Research Authority contracts are awarded in-state, he said.

If the agency’s current job listing is any indication, it would appear only a small percentage of the Research Authority’s recent employment opportunities are being created in state, as well.

Mahoney did not return calls from The Nerve seeking comment, nor did representatives from Gov. Nikki Haley’s office.

The Legislature’s top four leaders – House Speaker Harrell, R-Charleston; House Ways and Means Committee Chairman Dan Cooper, R-Anderson; Senate President Pro Tempore Glenn McConnell, R-Charleston; and Senate Finance Committee Chairman Hugh Leatherman, R-Florence – also did not return calls from The Nerve.

Earlier this month, Research Authority Chairman Bill Masters included with his resignation letter to Haley an accompanying report that blasted the agency charged with leading South Carolina’s “knowledge-based” economy.

Masters states in the eight-page report that SCRA has evolved from a scientific research organization into a political organization that uses data and information manipulation to market itself and benefit top management and its allies.

Masters also alleged that SCRA is “run mostly for the benefit of its top management for monetary benefits and for exerting control and power;” that the agency spent approximately $600,000 on an investigation directed mostly at Mahoney in 2008; and of questionable dealings concerning some SCRA board trustees.

He also questioned SCRA’s handling of assets, such as bequests of land by the state and state-assigned monies, which he claimed were directed primarily to maximize top-line and bottom-line numbers in order to increase management largesse. That included possibly selling or booking land to cover losses or increase profits, he said.

Further, Masters asserted that SCRA charges overhead to South Carolina customers at a rate considerably higher than it charges for a large percent of its other contracts whose monies and jobs may not be South Carolina bound.

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