Columbia, SC— After lawmakers didn't gain much information Tuesday about how $1.8 billion traveled through a state bank account over the past decade without anybody knowing where it came from or went, a South Carolina senator claimed the elected state treasurer betrayed public trust.
Republican Treasurer Curtis Loftis answered senators' questions for six hours, sometimes shouting and sometimes saying he didn't know. He told the chamber he wasn't provided information he asked to repair the mess caused by the state's mid-2010s accounting system change.
However, he left before Republican Sen. Larry Grooms concluded, “Apparently Mr. Loftis has lost control of the state treasury,” and the General Assembly can't rely on him to fix his problems. “Mr. Loftis has abdicated his state treasurer duties. Grooms, an influential 1997 Republican, alleged he broke public trust.
Accountants are still working to fix the $1.8 billion mistake, but state Senate leaders say money was moved into an account to balance the books whenever the books were off. Another issue was the state double-counting roughly $4 billion in higher education funds.
Comptroller General Brian Gaines, who replaced the elected Republican director after he resigned last year due to financial issues, opened the meeting for 10 minutes. He pledged to help senators solve the problem and stated the treasurer's office created the $1.8 billion account. Loftis maintained to the senators that he cannot acquire information from the comptroller general or balance the books.
Loftis requested for more time to find answers and screamed at senators for saying he lied. He implored the subcommittee Democrats to help him dispute the chair's claim that there were identical reports with the same figures. “I have no power here,” Loftis remarked. “All I've had is six or seven hours of 'Gotcha, gotcha.'”
Grooms said lawmakers are currently assessing the issues. He claimed that the state's accounts were negative at the end of the past fiscal year and that billions of dollars had been in error. Loftis pounded the lectern and said he was being ganged up on. “Senators, I’m disadvantaged. Six individuals can ask me anything from the last 14 years, he stated.
Loftis once claimed his report was correct and the Senate's, which had identical figures, was erroneous. “Senator from Colleton, I submit the treasurer might have trouble with addition,” Grooms told a colleague. Loftis said he is the state's banker and investment head and the comptroller general reconciles the records. Loftis said the comptroller general withheld crucial information, which the other agency denies.
If we stopped squabbling, we could fix this. Loftis remarked, "I've been given responsibility without authority." New information was hinted at the meeting. Senators perked up when Loftis recommended a criminal investigation into the money, but he swiftly explained that they misunderstood him. Instead of funding teacher wages or prison renovations, the $1.8 billion may be taken from them.
Republican Sen. Stephen Goldfinch suggested the money may belong to the state Department of Transportation, the federal government, or an environmental trust fund. If the money is found, the state may have to pay back the $1.8 billion in interest. Loftis said the investments are pulled from numerous accounts, so the money doesn't stay in one.
Grooms said the issues are being investigated. He wouldn't say if he'd recommend impeachment or other legislation. Loftis said the legislation requires his department to untangle the accounts and determine where the $1.8 billion should go. Grooms suggested taking that power from the Treasurer's Office and giving it to forensic accounts. “He began to lose control in 2016 and has not done a darn thing to correct those unresolved errors,” Grooms claimed.
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