SC business incentives to be less secretive after state settles lawsuit with Harpootlian

The agency that handles economic development deals in South Carolina agreed to be more transparent with the incentive agreements it makes to bring jobs to the state.

The South Carolina Department of Commerce’s move is part of a settlement with state Sen. Dick Harpootlian, D-Richland, who sued after the agency redacted information when responding to Freedom of Information Act requests.

Commerce redacted the identity of executives and lawyers involved in economic development negotiations and what the agency considered confidential and proprietary information for a company.

In October 2020, a judge ruled the Department of Commerce could not keep details of business deals secret, such as the names of the prospective companies’ executives and lawyers involved in deal negotiations. The agency appealed the decision.

Under the settlement agreement, the Department of Commerce updated its FOIA policy and increased how much it discloses.

“In our view, it’s not just a big win for Harpootlian, it’s a win for commerce and the people of South Carolina who will now have significantly more information about the nature of these deals than before this case was filed,” said Chris Kenney, an attorney in Harpootlian’s office.

The S.C. Court of Appeals formally dismissed the appeal on Thursday with the settlement in place.

The settlement includes the agency providing information on the average wage for jobs that are created as part of an incentive package, whether the average pay is less than $15 an hour and disclosing the names of executives involved in negotiations.

“You will get a snapshot of what types of jobs are being created pursuant to these deals without being invasive as to the individual company that may be at issue,” Kenney said. “It will give the public more information about whether we’re getting the benefit for the bargain.”

The Department of Commerce also agreed to have its coordinating council enforce clawback provisions when employers don’t meet performance requirements under their deal. The agency also will have enhanced reporting by the South Carolina Coordinating Council for Economic Development and include available incentive data on its website.

“I am pleased to arrive at this agreement which underscores commerce’s commitment to providing more clarity and insight into our processes without inhibiting the state’s competitive position,” Secretary of Commerce Harry M. Lightsey III said in a statement. “We will continue to explore transparency that balances the public interest with our industry recruitment efforts and the competitively sensitive information of businesses operating within the state.”

Harpootlian’s law office said the senator and Lightsey worked cooperatively on settling the lawsuit, which was filed in October in 2019 by Harpootlian when Bobby Hitt was secretary of commerce.

Negotiations to settle the matter lasted more than six months.

“I want to commend Secretary Lightsey for reaching out and working cooperatively and collaboratively to resolve this in a way that provides an immense amount of transparency that wasn’t there before,” Harpootlian said in an interview with The State. “I am heartened by his attitude and his willingness to work with me in resolving this issue. It’s a sea change.”