Story last updated at 7:00 a.m. Monday, January 27, 2003
SPA comes under fire for role in study
BY RON MENCHACA
Of The Post and Courier Staff
The State Ports Authority is drawing criticism for its role in a recent study of the agency's economic benefit to South Carolina, a study whose findings were promoted in a statewide advertising blitz.
While not directly challenging the study's conclusions about the port's economic significance, critics are concerned that the SPA had some part in crafting and financing the study, which is being touted as "unbiased" and "independent."
The SPA doesn't deny that it used its own cash and staff to get the study done, but it maintains its role was hands-off.
One local economist called the financial arrangement that produced the study "troubling." Another economist said the study couldn't be called independent "by any stretch of the imagination."
The study released earlier this month was conducted by CharlestonSouthern University economist Al Parish, who runs the school's Center for Economic Forecasting. Parish defended his study, calling it "objective" and dismissing as "whiners" those who have questioned its independence.
Among the concerns raised by watchdog groups South Carolina Coastal Conservation League and Contain the Port are that:
-- The SPA lent Parish and the economic center $76,433 to purchase the computer software model with the understanding that the center would repay the SPA as it made money using the model to produce other studies. The center has paid back the SPA using private grant money.
Frank Heindel of Mount Pleasant-based Contain the Port said a state agency has no business facilitating the purchase of a product that a private entity can use to generate profits, "particularly in a tight budget year."
-- The SPA helped collect surveys mailed to companies whose businesses rely on the port. Survey respondents were told that SPA staff members were available to assist respondents in completing the surveys. Respondents also were allowed to complete surveys on the SPA's Web site.
Parish said the SPA's help in gathering the surveys increased the response rate because respondents were more likely to provide sensitive information to a business partner than an economist.
About half of the 2,500 businesses surveyed gave the financial and employment figures that were fed into the computer model that produced the study's findings, Parish said. "All the port did was act as a courier," he said. "I can't collect that many surveys by myself."
Citadel economics professor Don Sparks said the SPA's role raises a potential conflict of interest. "If they are gathering the data, you can't call that an independent study," said Sparks, who was critical of a similar economic study the port did a few years ago. "If it's a joint study, call it that. It removes any kind of ambiguity about independence or intent."
While not commenting directly on the port study, Clarence M. Condon, the dean of the School of Business and Economics at the College of Charleston, said "joint study" might be a better way to describe the financial and administrative arrangement between the SPA and the Center for Economic Forecasting. "I certainly wouldn't call it independent."
-- Because respondents were promised confidentiality, Parish said, he destroyed all completed surveys. "That's bothersome that you can't verify the data," Sparks said. "It raises another troubling aspect."
Parish said any group that wants to verify his numbers should buy their own model and do their own study.
SPA spokesman Byron Miller said the SPA was upfront about its part in Parish's study. The arrangement, Miller said, allowed the SPA the free benefit of a valuable study, one that would have cost $50,000 if the SPA had paid for it.
Dana Beach, the director of the Conservation League, said his main concern is that people are more inclined to take a study at face value if they believe it came from an objective source. "This is about as dubious as you can get," Beach said. "If they put it out as a joint study, that would be a different matter."
Soon after the study's release, the SPA began highlighting the findings in newspaper and radio advertisements, and in booklets mailed out to thousands of state government and business leaders.
In January, the SPA spent $180,000 to advertise the study results. Some of the ads ran in The Post and Courier. The SPA spent another $10,000 to produce and mail the booklet highlighting the findings, Miller said.
The ads suggest that the findings - such as one linking 281,000 jobs statewide to the port - bolster the need for port expansion at the former Charleston Naval Base in North Charleston.
Miller referred specific questions about the study methods to Parish because he is the author. "Dr. Parish is a respected economist on this community and state. I think his credibility is beyond reproach," Miller said.
Beach and Heindel have asked port and university officials for more information about the study, including financial records.
Such study details should always be disclosed upfront, said Burt Keller, a professor of ethics at the Medical University of South Carolina, whose courses often touch on the controversial issue of pharmaceutical companies paying for studies that sing the wonders of their drugs.
"Generally speaking, the people who pay for a study get the results they want," Keller said, citing a favorite adage: "He who pays the piper calls the tune."