COLUMBIA — State Sen. Dick Harpootlian wants to force the state Commerce Department to disclose how it doles out millions in incentives to lure businesses to South Carolina, saying the agency's secrecy makes it impossible to discern whether taxpayers actually benefit.
Harpootlian, D-Columbia, sued Commerce for information the agency refused to provide about its deals with Giti Tire in Chester County and the defunct Viva Recycling in Berkeley County. The freshman senator chose those two companies because of their woes. His lawsuit cites articles in The Post and Courier about the massive cleanup at the former tire recycling facility — paid by taxpayers — and lawsuits indicating Singapore-based Giti isn't paying its bills.
Giti Tire opened with much fanfare two years ago, with Commerce officials saying the company's first U.S. plant would create 1,700 jobs within a decade. How many currently work there is unclear. But a lawsuit filed in August claims the company began missing payments for contracted employees as early as January 2018.
"Were solid business decisions made, or are we giving money to folks based on job numbers that sound like a good deal?" Harpootlian told The Post and Courier on Wednesday.
Last year, The Post and Courier documented how Viva executives had a string of bankruptcies in the Northeast before launching their tire-recycling projects in South Carolina. Despite those failures, state and local officials greased their entry into South Carolina in 2013 by approving tax-exempt bonds. The company's operating permit was revoked four years later.
Neither the public nor legislators who approve Commerce's budget have any idea how the agency actually spends its money, he said: "So the reason I sued is two-fold, for these specific deals and to have a judge tell them what they’re legally required to give up."
Harpootlian, an attorney, submitted two separate Freedom of Information Act requests to Commerce in August.
Commerce pointed to exemptions in the state's public records law as a legal reason for blacking out large portions of what it supplied last month. Redactions included total incentives, the agency's analysis for taxpayer costs and benefits, and who signed the state contracts. Information state law allows government agencies to withhold includes trade secrets, personal information, and proposed contracts.
Commerce spokesman Alex Clark said the agency responded to the requests "as we routinely do," in full compliance with the law.
"While the law provides access to certain public records, it also protects, among other things, competitive company-specific information," he said. "Commerce stands ready to respond in accordance with state law and remains committed to protecting the confidentiality of our companies, as the law allows."
But Harpootlian argued the agency is hiding behind vague wording in the law that no longer applies to those companies.
"Those deals are done. There are no trade secrets," he said. "What we see is they’re unwillingness to tell the taxpayers how much they spent, what they spent it for and did we get our money’s worth."
Late Wednesday, Commerce sent Harpootlian and the newspaper a follow-up response supplying much of the information on Viva Recycling the senator had sought, which the agency noted had to be retrieved from archives. Information the company identified years earlier as confidential was still redacted "in an abundance of caution," the agency explained, but Commerce no longer blacked out what it called personal information "in light of the company's departure from the state and failure to meet its obligations," the cover letter read.
Commerce gave no additional information on Giti Tire.
The lawsuit filed Tuesday in Richland County court follows Harpootlian's public spat with Commerce earlier this year over incentives to the Carolina Panthers.
Legislators eventually approved up to $115 million in tax breaks to get the Panthers to build its headquarters and practice fields in York County, but only after Commerce supplied some information that Harpootlian demanded to end his filibuster on the deal.
Harpootlian and seven other senators then signed a request asking the Legislative Audit Council to review 10 years' worth of business incentives handed out by Commerce. But Commerce could be similarly withholding information from the Legislature's auditing arm, he said.
"This is the most efficient and effective way, in my opinion, to find out how these taxpayer dollars are spent and what we got for it as taxpayers," he said.
This has been updated to reflect a follow-up response Commerce emailed late Wednesday.