STATE’S INVESTMENT COMMISSION GAVE “THUMBS DOWN” TO PORT PROPOSAL
The S.C. State Ports Authority (SCSPA) recently announced its intention to name a proposed $700 million terminal after the most powerful politician in the state – S.C. Senate president Hugh Leatherman.
How’d that go over? Um, not well.
In fact the move – widely regarded as a sop to secure additional taxpayer funding for the agency in the state budget – has opened the SCSPA up to a flood of new scrutiny. And criticism.
So … what compelled the SCSPA to attempt such a desperate gambit?
According to our sources at the agency, the ports’ “Leatherman play” was initiated after the agency failed to convince the leaders of the state’s scandal-scarred pension fund to invest in their infrastructure expansion plans.
Wait … what? The notoriously corrupt S.C. Retirement System Investment Commission (SCRSIC) actually took a pass on the ports?
According to our source, the SCSPA went to the investment commission – which is controlled by Leatherman crony Reynolds Williams – and wanted it to “finance certain capital projects.” The commission wasn’t interested, though, because the rate of return on the investments – said to be around three percent – wasn’t high enough.
Commissioners were “looking for higher returns as their portfolio consistently underperforms.”
“The three-percent is not bad for fixed income bonds but (the commission) was not interested,” a source at the SCRSIC confirmed.
As we’ve been noting for years, South Carolina’s corrupt pension fund managers have consistently doled out massive bonuses to the very bureaucrats who have labored to produce some of the worst results of any large pension fund in America (at the highest price, too).
One reason for the abysmal results? Terrible investment decisions. Of course the deeper the hole gets – the harder commissioners push for bigger paydays.
“They are ‘swinging for the fences’ and that is the very last thing a pension fund should do,” our SCRSIC source said. “Especially one with a reputation for whiffing on higher-risk alternative investments.”
As we’ve said from the beginning of this debate, we believe government should continue to maintain public ownership of critical infrastructure – like our ports. But for the better part of the last decade we’ve repeatedly argued that private investment (and management) of these facilities was a far better method of maximizing competitive advantage.
It would also be a far better method of securing the funding the SCSPA desperately needs if it hopes to have any chance of remaining competitive in the shipping business.