Struggling Diaper Plant President Speaks Out; Public Officials Largely Silent

January 13, 2014

Investigative Reports

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Diaper BabiesCollin Brown III says he’s well aware of a state deadline this year to create 262 jobs and invest $6 million in a diaper production plant in Marion County, or face possible repayment of a $1 million state grant.

It’s unclear, however, whether Brown, president of the Softee Supreme Diaper Corporation, will be able to meet the Sept. 3 deadline, given production problems that he attributes in part to an ongoing federal criminal case involving Jonathan Pinson, former chairman of the S.C. State University Board of Trustees and partner in the diaper company.

“I think the more press (coverage) that happens, it clearly makes it more challenging,” Brown told The Nerve on Saturday.

Eddie Joe Altman, Marion County’s chief building official, said Friday when contacted by The Nerve that based on periodic observations by his staff, the diaper plant, located on U.S. 76 near Mullins, hasn’t been in production for months.

“As far as I know, it’s closed down,” Altman said. “There’s nobody out there now.”

Brown strongly disagreed, saying that although “we went for a period without production,” the plant recently has been “running five days a week, one shift,” adding that his vendors and customers have “stuck with us, and we’re now producing again.”

Still, Brown could not provide any employment figures at his plant when asked by The Nerve.

Marion County has consistently recorded the state’s highest unemployment rate. In November, the rural Pee Dee county’s unemployment rate was 13.1 percent – six percentage points higher than the state average, according to the S.C. Department of Employment and Workforce.

If Softee Supreme doesn’t meet job-creation and investment targets by Sept. 3, it could be required under a state incentives agreement to repay all or part a $1 million state rural infrastructure grant awarded in 2009, according to documents obtained recently by The Nerve under the S.C. Freedom of Information Act (FOIA).

How closely local and state officials are watching out for the taxpayers’ interest is unknown. The Nervelast week left written or phone messages seeking comment from Marion County Administrator Tim Harper; Kent Williams, the county’s deputy administrator and a Democratic state senator; Julie Norman, the county’s economic development director; and Allison Skipper, spokeswoman for the S.C. Department of Commerce, though none responded.

An initial Commerce press release in September 2009 announcing the project made no mention of either the $1 million grant or Pinson’s connection to the company. But state and local officials were gushing then about the project.

“Softee Supreme’s investment represents one of the largest single job creation efforts to be recruited in Marion County,” then-Commerce Secretary Joe Taylor said in a press release. “We welcome Softee Supreme to South Carolina and look forward to a long and prosperous relationship with them in the years ahead.”

The state Coordinating Council for Economic Development (CCED), made up of the heads of state agencies involved in economic development, including Commerce, approved the $1 million grant to Marion County for Softee Supreme, according to documents obtained under the FOIA.

The Nerve previously has reported that the CCED annually approves millions in state incentives – largely done in secret – that benefit companies looking to locate and expand in South Carolina. By law, Commerce Secretary Bobby Hitt, an appointee of Gov. Nikki Haley, chairs the council.

In a document dated April 1, 2010, Harper, the Marion County administrator, informed the CCED that the first phase of the diaper plant project was “100% complete” as of February 2010. In a separate document, Brown listed the number of jobs created as of April 1, 2010, at 60 – 202 fewer than required under the incentives agreement to be created by Sept. 3 of this year.

Brown also reported at the time that $2.15 million had been invested in the project – slightly more than a third of the investment requirement under the incentives agreement.

In the application for the state grant, the average hourly wage listed for the promised 262 jobs was $12.63, with 243 to earn $11.50 per hour, which would work out to be an annual wage of $23,920 based on a 40-hour work week. Brown told The Nerve that “we spent over $4 to $5 million in salaries since we got there.”

When asked what documentation the state required to verify job-creation and investment numbers, Brown was unable to provide an immediate answer, saying he first had to review a file.

The diaper company’s predecessor in Georgia had struggled financially, court records reviewed by The Nerve show, but it is unknown whether the CCED knew about the company’s legal problems prior to awarding the $1 million grant.

The Nerve in November reported that less than three weeks before the September 2009 announcement of the diaper plant project in South Carolina, a related company known as McDiapers Inc., which had owned the diaper facility in Decatur, Ga., that moved to Marion County, filed for bankruptcy in Atlanta, listing Brown as the new owner of the company’s inventory of approximately $2 million.

Then there is the ongoing federal criminal case in South Carolina.

In a federal indictment that was unsealed last November, prosecutors said the diaper’s company original owner was “struggling financially and agreed to partner with members of the enterprise, hoping to obtain financial backing and governmental assistance for relocation of the business to Marion County, South Carolina.”

The indictment alleged that defendant Pinson, a Greenville businessman, became a partner in the diaper company around 2009 and used the company to “executive a scheme and artifice to defraud and to illegally obtain money and property through the use of false and fraudulent pretenses, representations, and promises.”

Co-defendant Eric Robinson, a Greenville businessman and close friend of Pinson, “introduced Pinson and others to the owner of the diaper plant which subsequently located to Marion County and which was used by the enterprise detailed herein to convert government funds,” the indictment alleged.

After the $1 million state grant was awarded, Pinson and others “devised a plan to submit falsified invoices to Marion County for engineering services supposedly provided to the diaper plant, illegally billing Marion County at grossly inflated rates for work which was not always completed,” according to the indictment.

Pinson and Robinson have pleaded not guilty to various federal charges, and a trial is scheduled for both on March 20 in U.S. District Court in Columbia, court records show. Besides the Marion County case, the indictment also details alleged schemes involving S.C. State University and a housing development in Columbia known as the Village at River’s Edge.

Prosecutors are seeking reimbursement from Pinson and Robinson of a “minimum of $850,000,” according to the indictment.

Brown is not facing any criminal charges. He declined to comment when asked by The Nerve about specifics of the criminal case against Pinson and Robinson, saying only, “It’s an ongoing investigation, and I need to see what the legal system does.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.