Bob Coble Mayor, City of Columbia

Last Wednesday city council went hunting for money but couldn’t find any. The Midlands Education Business Alliance (MEBA) needed to further fund its operations to maintain itself for another year of working with Columbia–area kids.

The program is an exercise in career orientation, an infusion of real–world awareness in the secondary school classroom. MEBA is a success story, and the money in previous years (about $200,000 a year from the city in a $700,000 annual budget) was seen as well spent.

Mayor Coble argued in favor of tapping the water and sewer funds for MEBA. Council member Rickenmann asked why a private venture capital subsidy from the city could not be redirected to the kids. Coble jumped to the defense of the venture capital subsidy and asked again to take the money from water and sewer. Council member Osborne agreed with Rickenmann in that Osborne held his ground on the principle that water and sewer funds should, in fact, fund water and sewer infrastructure and that the city’s play in private venture capital was a bit unconventional. Others in the audience murmured it may be illegal.

Walter Alessandrini Business Advisory Board This past Sunday morning around seven the water main broke near the Horseshoe. Water stopped flowing in the neighborhood, to include the 20–story Senate Plaza residence, all 158 units of it. The water took another 12 hours to come back on, and that was a dirty dozen hours on a Sunday. The fault was a poorly maintained water system, but not an under–funded one.

Two years or so ago a house in Heathwood burned to the ground because of low water pressure out of the fire hydrant. The homeowner sued the city for irresponsibly poor water main maintenance. Money was flowing out of the water system if not the actual water.

The city uses its water and sewer funds to finance all sorts of preferred projects while the water and sewer systems get shortchanged and fail to function.

The city subsidizes Trelys

The venture capital fund Coble tried to protect is a $125,000 annual payment to Trelys, a private profit–chasing operation run by Larry Wilson, the former chairman, president, and CEO of Seibels Bruce’s Policy Management Systems, later called Mynd. Mynd merged with Computer Sciences Corporation in 2000, and Wilson merged with other outside independent business interests. The advisory board at Trelys is something of a SC Who’s Who in risk capital top tier circles.

G. Larry Wilson Managing General Partner Wilson’s assistant at Mynd, Robert Fletcher, took his Harvard MBA with him as Mynd merged with CSC and followed Wilson to Trelys.

Also on the Trelys advisory board is the former president of Nasdaq – the stock exchange where Microsoft is listed – Al Berkeley.

Walter Alessandrini ran Union Switch and Signal in Columbia but left for California to join a company and guide it through a fabulously successful initial public offering. Alessandrini is on the Trelys board. Reportedly his net worth shot up above $100 million after the California venture matured.

Darla Moore, who dedicated $25 million in her hedge fund to the USC business school endowment, and who put up another $45 million in a matching challenge for the school’s building fund, is on the Trelys board. She’s quoted on the Web site: “One thing that distinguishes America above all other economies of the world is our willingness to put capital behind a good idea.” Her husband Richard Rainwater became friends with Sid Bass at the Stanford MBA program. Bass tapped Rainwater to manage the Bass brothers’ money, making billions.

Darla D. Moore Business Advisory Board Through it all, Trelys started with the big boys and girls who had their tons of money to back risks offered in Trelys. The idea, simply put, is to make a killing. Greed is good, as Gordon Gekko put it. Good ideas get funded and businesses get started and eventually everybody invested sees a windfall in the public sale of stock or the private sale of the company to a larger company.

So, what in the world is the City of Columbia doing here with an agreement to give these zillionaires $125,000 a year for three years….possibly at the expense of successful business/education relationships and programs…. certainly at the expense of the city’s water and sewer system? Would Trelys do just as well (or poorly) without the city’s $125,000 a year? Yes is a good guess, and yes, the same people would probably be doing the same thing at the same place and at the same pace.

The city has already given two years’ payments to Trelys, altogether a quarter of a million dollars. What did the city expect to get for its money? Nothing. The city can’t legally participate as an investor or as a partner with any expectation of a return. All the city can do is hope businesses get funded and get successful and get rich and stay in Columbia. That’s all.

Moreover, absolutely no one at Trelys has done anything wrong. All they did was ask for money and they got it. Over 10 years ago, no one at Air South did anything wrong. All they did was ask for money,º and they got it. At least Trelys is getting just a minuscule amount of the total money necessary to make something happen. But like Air South, if it happens, the city’s share of the return is zilch.

Photos by John Temple Ligon