July 15, 2024

The Nerve Archive

Where Government Gets Exposed

Senator: Lawmakers left out of loop on Leatherman’s $550M bond proposal


Claiming that many lawmakers had little or no notice of a $550 million taxpayer-backed bond plan for projects at the Port of Charleston, a senator has proposed expanding the Ports Authority governing board to include the heads of the state Commerce and Transportation departments.

Besides making Commerce secretary Bobby Hitt and DOT secretary Christy Hall voting members of the current nine-member Ports Authority Board of Directors, the bill, sponsored by Sen. Sandy Senn, R-Charleston, would allow the two agency heads to attend closed board sessions.

Currently, Hitt and Hall serve as non-voting, ex-officio board members and are allowed to attend only the public portion of board meetings. The governor appoints the nine voting members with consent of the Senate; a 10-member legislative committee qualifies board candidates.

Asked why she introduced her bill, Senn told The Nerve when contacted Thursday: “I was pretty shocked when they came to us and asked for $550 million. Those of us who sit on (the Senate) Judiciary (Committee) didn’t get wind that it was coming, and even those on (the Senate) Finance (Committee) only had about two weeks’ notice.”

Senn was referring to a joint resolution, sponsored by longtime Senate Finance Committee chairman Hugh Leatherman, R-Florence, authorizing the sale up to $550 million in general obligation bonds – to be repaid by state taxpayers with interest – for various “infrastructure” improvements at the Port of Charleston.

In drafting her bill, Senn said she thought that making Hitt and Hall voting members of the Ports Authority board “might be a way to have somebody who is a state employee – not a quasi-(state employee) – really answer to the state, know what’s going on there, and potentially give us warning and give the (Ports) board as well that this (bond proposal) probably won’t go over well.”

She added, though, she would consider amending her bill to allow Hitt and Hall to attend closed board sessions, though not making them voting members, after hearing about concerns from other senators on that provision, noting that Hitt “definitely knows what’s going on, and he knew that $550 million request was coming.”

The planned projects at the Port of Charleston include a rail yard near a soon-to-be-opened terminal named after Leatherman, and a new barge system connected to the terminal. In addition, a new road recently was opened to provide truck drivers a direct connection between the terminal and Interstate 26.

Last month, The Nerve revealed that the S.C. Treasurer’s Office projected the total taxpayer cost of Leatherman’s bond proposal at $878 million over 20 years, including $328 million in interest. The joint resolution, which Leatherman introduced on Jan. 27, passed the full Senate on Feb. 24 and is now before the House Ways and Means Committee.

The resolution was amended before it passed the Senate to require the Ports Authority to use a portion of shipping container fees to reimburse the state’s general fund $150 million in principal.

The Ports Authority is a state-created agency, though it does not receive state general funds for basic operations.

Under state law, Commerce secretary Hitt is chairman of the S.C. Coordinating Council for Economic Development (CCED), made up of the heads or chairpersons of 11 state agencies that deal with economic development, including the Ports Authority and Department of Transportation.

As The Nerve previously has pointed out, the CCED, which is administered by Commerce in the agency’s headquarters in a high-rise office building across the street from the State House, typically discusses taxpayer-backed incentives projects in secret.

Although the salaries of Commerce employees making at least $50,000 annually are included in the state salary database, the Ports Authority doesn’t provide that information for the database. The Nerve in December revealed that more than 200 Ports Authority employees received at least $100,000 in total wages last fiscal year, with agency president and CEO Jim Newsome making $546,236, according to records obtained under the state open-records law.

In February, The Nerve revealed that top managers at Palmetto Railways, a Commerce division heavily involved with the proposed rail yard near the Leatherman terminal, also are well paid, though their salaries and other financial records aren’t readily available to the public. Jeffrey McWhorter, the Charleston-based railroad’s president and CEO, makes $200,000 annually – slightly more than what Hitt receives yearly – and received a $70,000 “incentive” bonus last year, records show.

Senn’s bill was introduced on Feb. 23 and approved a month later by the Senate Transportation Committee, chaired by Sen. Larry Grooms, R-Berkeley. If passed by the full Senate, the bill can move to the House, though it likely will miss a procedural deadline to be transferred to the other chamber, meaning it couldn’t be considered again until next year unless the House by a two-thirds vote agrees to consider it this session.

The Nerve this week sent written requests for comment on Senn’s bill to the Ports Authority and the Commerce and Transportation departments, but received no responses by publication of this story.

Bryce Fiedler, a policy analyst with the South Carolina Policy Council, the parent organization of The Nerve, contributed to this story. Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

Nerve stories are free to reprint and repost with permission by and credit to The Nerve.


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