State ethics officials have reprimanded State Treasurer Curtis Loftis for influencing the selection of a longtime friend to receive $2 million in legal work from the state.
The decision, made public Thursday, concluded the choice of Loftis’ friend to do the lucrative legal work was made by other officials. But the treasurer’s “acquiescence and agreement” indirectly guided the decision, the State Ethics Commission said.
Loftis said he would appeal the ruling, calling it “subjective and unprecedented.”
The decision by the Ethics Commission chastised Loftis for not being upfront about his relationship with the lawyer who received the assignment.
Public officials “should err on the side of disclosure” when their actions raise questions about “the appearance of impropriety,” the commission said.
Loftis contends his failure to disclose his relationship with the attorney was inadvertent, not intentional.
The decision followed a private hearing into the allegations against Loftis by the Ethics Commission. Loftis, who campaigned on opening up more of state government to public scrutiny, did not request that hearing be conducted publicly.
Samuel Griswold, a leader of the State Retirees Association, questioned the attorney’s hiring, saying the legal fees paid the lawyer — as part of a settlement of a state pension system lawsuit against a New York-based bank — cost retirees money.
However, Loftis said the complaint was “retribution” for objections that he has raised about how the pension system handles its investments.
Loftis, who lives in West Columbia, faced a fine of up to $2,000 as well as the reprimand, but no fine was imposed.
The lack of a fine isn’t important, Griswold said. “The point is that the commission found he violated the Ethics Act.”
At issue is whether Loftis should have told state Attorney General Alan Wilson about his relationship with lawyer Michael Montgomery.
Montgomery, a former Richland County councilman and former Richland 2 school board member, was a board member of a nonprofit foundation created by Loftis.
Mitchell Willoughby, the attorney initially hired by the state to sue the New York bank, sent ethics officials a statement saying it was his decision to hire Montgomery and he did so without any recommendation or request from Loftis.
But, in its decision, the ethics panel said Willoughby acknowledged he “wanted Montgomery on the team” because of his friendship with Loftis.
In Jnauary 2011, Loftis also sent a letter to Attorney General Wilson recommending Montgomery be hired — after Wilson said a decision had been made — without noting his relationship with the attorney.
Loftis said his letter simply approved Montgomery’s selection.
But the Ethics Commission said the letter amounted to improper approval of Wilson’s decision.
The ruling underscores that state officials need to be careful about trying to make sure their allies are rewarded, said John Crangle of S.C. Common Cause, an ethics watchdog group.
“It illustrates the chronic problem of people at that level seeking to steer contracts to campaign contributors and friends,” Crangle said.
Tim Flach: 803-771-8483