Push on to shut revolving door at SC roads agency

During state budget negotiations last spring, four senior leaders of the S.C. Department of Transportation quit.

They left because of a proposal that would have banned the Transportation Department from awarding contracts to private firms for one year after they hired an engineer from the state agency, according to interim Transportation Secretary Christy Hall.

“They (the employees who left) were concerned about their ability to work after leaving the Department of Transportation,” Hall said of those who quit the state agency.

The proposed one-year ban did not make it into the state budget.

But it did signal just how upset some lawmakers are with the perception of a revolving door between the Transportation Department and private engineering firms that vie for state road contracts.

The one-year ban would have ensured that state employees did not leave the Transportation Department with information that would give their new employers a leg up over other firms in landing multimillion-dollar contracts with the state, said state Sen. Creighton Coleman, D-Fairfield, who drafted the proposal.

Coleman fretted that the appearance of revolving-door favoritism would cause taxpayers to question how state road dollars were being spent at the same time that lawmakers were debating whether to raise taxes to repair South Carolina’s crumbling roads and reform the state’s roads agency.

That debate is expected to be even more intense when legislators return to Columbia in January in the wake of historic flooding that put even more attention on the state’s road repair needs.

‘Drain on many experienced employees’

When Coleman’s revolving-door ban was introduced, it raised questions among state Transportation Department employees.

Staffers were concerned about their ability to support their families long term and what they would do after they retired from the state agency, said interim chief Hall, who is awaiting Senate confirmation to become the roads agency’s permanent head.

Coleman’s proposal sought to block a natural career progression, according to a spokesman for the organization that represents the private engineering firms. Transportation engineers often start their careers at state transportation departments, and later go to work for private engineering firms, he said.

The private consulting companies, where the former Transportation Department employees went to work, design road projects, conduct field inspections, perform traffic engineering studies and secure environmental permits for road projects. Engineering officials at the Transportation Department go to work for consulting firms because their experience and professional licenses are transferable to the firm’s design and inspection roles.

The exodus of high-ranking Transportation Department leaders represented “a drain on many experienced employees,” said John Hardee, one of eight commissioners who govern the state roads agency.

Hall would not identify the four high-ranking Transportation Department leaders who left the agency in the wake of Coleman’s anti-revolving-door proposal. However, The State newspaper was able to identify three and contact two. Neither would return phone calls to the newspaper.

The State newspaper also reached out to three private firms where the former Transportation Department officials went to work. Officials at two of those firms told The State they would not comment. Officials at the third firm did not return phone calls.

When Coleman’s revolving-door ban failed to make the state budget, Hall imposed her own ban.

That ban bars former Transportation Department employees from working on state contracts that are awarded to their new employers for one year after they leave the state agency. Private companies that do business with the Transportation Department must sign contracts legally agreeing to the policy.

Even though Coleman’s proposal failed, the Transportation Department “saw the handwriting on the wall,” leading Hall to impose her own ban, said Joe S. Jones, executive director of the American Council of Engineering Companies of South Carolina.

That organization, which represents the engineering consulting firms, lobbies the Legislature and opposed Coleman’s anti-revolving-door proposal.

However, Hall says that if an employee leaves the state roads agency, that former worker should not be competing for Transportation Department work at his or her new job for a year.

Hall said her ban is intended to remove a gray area in state ethics law.

That law bars a former state worker from accepting a new position with an employer if the job involves a matter in which the employee “directly and substantially participated during his public service or public employment.”

But the meaning of “directly and substantially participated” lacked clarity, forcing the Transportation Department to make interpretations, Hall said.

Consulting engineers have talked through scenarios and given feedback to the Transportation Department on the one-year ban, Hall said. “The industry understands the need for why we do it.”

The policy that Hall put in place is appropriate, said Transportation commissioner Hardee.

Still, Hardee doesn’t think a firm that hires a former Transportation Department would have an advantage in winning roads contracts. Hardee said the Transportation Department is going to hire the most qualified firm, regardless of its connections to the state agency.

Jones agreed, saying his organization is a strong proponent of qualification-based selection. That selection process ensures the engineering firms that the Transportation Department chooses for road and bridge design work are the best ones for the job, he said. “One of the reasons it (qualification-based selection) was introduced … was to prevent favoritism.”

Coleman is unconvinced.

The Fairfield County Democrat hopes Hall’s internal policy will address the revolving-door issue.

But Coleman said he wants to ensure there is a level playing field during the bidding process so that smaller consulting firms, which do not have the resources to hire former Transportation Department employees, get their fair share of state contracts.

‘Spending the monies in the right way’

The debate over the revolving door at the Transportation Department comes as lawmakers prepare to decide whether to increase the state’s 16.75-cent-a-gallon gas tax to raise more money to pay for road repairs. Legislators also will have to decide whether to restructure again the Transportation Department, a demand of some conservative lawmakers.

Coleman supports increasing the gas tax.

However, he said, the revolving door at the Transportation Department gives voters reason to question whether the state agency is spending taxpayer money properly. “We need to insure that (the Transportation Department) is spending the monies in the right way,” giving taxpayers the biggest bang for their buck.

But going from a state agency to a private firm is “almost a natural career progression,” said Jones of the American Council.

Young professionals interested in transportation often start their work careers at state road departments, Jones said. Across the nation, private firms then hire those state workers because they want experienced employees who know the work.

Others say that creates the possibility for abuse.

The problem with a revolving door is that it could cause a state agency to favor a particular contractor and disregard the interest of the state, said John Crangle, head of the Common Cause South Carolina government watchdog group. That could result in taxpayers getting less for their money or something they don’t need or want.

While Hall’s one-year ban is an improvement, it probably should be two or three years, Crangle said. “The closer you have between the opportunity to be corrupt and the reward for being corrupt, the more the person is tempted to do it.”

Still, Crangle said, Hall’s move is a step in the right direction.

“Maybe it’s the best you can do under the circumstances,” Crangle said.

This story was originally published November 7, 2015 at 8:05 PM with the headline "Push on to shut revolving door at SC roads agency."