November 30, 2005
Chances are you or somebody you know has lost their job at the Savannah River Site. Tonight, we investigate “3161” funds, taxpayer money designed to create local jobs. In a News 12 Special Assignment, we found out some of your money is going to companies that may never pay it back.
Since 1993, the Department of Energy has funneled $22 million into our community; $12 million of it went to SRRDI, the Savannah River Regional Diversification Initiative, located here on the campus of Aiken Tech. So what have you gotten for your money? Some of it has paid off big time, Bridgestone Firestone is a shining example of the good that federal money can do.
“We’ve been able to put SRRDI money, 3161 money to good use, creating jobs,” said Fred Humes, Economic Development Partnership.
Fred Humes runs Aiken and Edgefield County’s Economic Development Partnership. He used $3 million of 3161 money to extend a rail line to this industrial park in Graniteville, and that was enough to bring in one of the world’s largest tire makers, and more than 1,000 jobs with it.
“That’s a very competitive park, close to a billion dollars in investment there, close to 1,800-2,000 jobs. So we think that investment has been good,” Humes said.
But some of your money hasn’t had nearly the return. Small businesses also got hundreds of thousands of dollars in either loans or grants. One of them was Phil Alexander’s CallingPost, still in business here off Fury’s Ferry Road in Martinez. In 1996, Alexander got a grant of $25,000. A year later in 1997, Alexander got a loan of $52,000 and repaid it in 2005. Then again in 1999, he got two loans totaling $225,000.
It’s money he’s supposed to pay back. The agreement was Alexander would repay $500,000 by 2004. But, when his loan came due, he renegotiated with SRRDI and agreed to give SRRDI CallingPost stock instead, stock Alexander is supposed to buy back by December 2006.
“I think most venture capitalists will tell you, you lose more than you win,” said Ed Presnell.
Ed Presnell is SRRDI’s chairman.
“We have an equity position in their company, so bottom line is we stand to make some money to this if it survives,” Presnell said.
And that’s the half million-dollar question: Can CallingPost make it and repay back the money it owes you, the taxpayer?
News 12 learned in a bid to business with the state of South Carolina, Alexander claimed to be located at this address on the Jefferson Davis Highway. Turns out that address is really SRRDI’s office at Aiken Tech. Remember, his real office is 21 miles away in Martinez.
In a type of hearing that comes up less than once a year, South Carolina wanted to determine if Alexander should be banned from doing business with the state because of it.
“How is SRRDI facility a satellite office of CallingPost?” asked Mike Spicer, SC Data Control Board Officer.
“We asked them if we could use them for filing this out and they said sure,” said Phil Alexander, CallingPost CEO.
“So he did not have your permission to call you his SC satellite office or anything like that?” News 12 asked.
“No Ma’am, not one bit,” Ed Presnell said.
It’s something we wanted to ask Mr. Alexander himself.
“Do you have anything to say about the bid, where you said you where a South Carolina company?” News 12 asked.
Mr. Alexander did not respond.
And the response was the same when we asked about the SRRDI loan.
“Do you feel you have to pay SRRDI back the half million dollars you owe them?” News 12 asked.
Mr. Alexander again did not respond.
Now if Mr. Alexander’s name sounds familiar, we first introduced you to him when we were investigating suspicious spending by former state school superintendent Linda Schrenko. The auditor of Georgia still says Alexander received a gratuity, or a freebie, from Schrenko, $49,000 in fact, for nothing.
The problem with Mr. Alexander or any other company not paying back their loans is that there is no more 3161 money. If those companies did pay back their loans, it could be loaned to other entrepreneurs to start new companies.
And we should mention, there are other companies not pay back loans: Bitz America borrowed $147,000, Best Line Hair Products borrowed $35,000, American Anodize Corp borrowed $250,000 (it was bought out), and Surgimach borrowed $250,000. According to SRRDI, all those companies are not out of business, and they borrowed a total of $932,000.