Ethics complaint alleges S.C. treasurer hired business associate to represent state

S.C. Treasurer Curtis Loftis will be the subject of an S.C. Ethics Commission hearing on allegations that he hired a business associate friend as an attorney in a lawsuit against the Bank of New York Mellon.

The S.C. Ethics Commission determined there was probable cause to investigate the accusation and a hearing will be held Sept. 16 at 1 p.m.

J. Samuel Griswold, a state retiree and former deputy executive director of the S.C. Budget and Control Board, charged in an ethics complaint that Loftis violated state law that says public officials cannot use their official office to obtain economic interest for “an individual with whom he is associated.”

Griswold alleges Loftis violated that law by using his office as treasurer to gain an economic interest for former Richland County councilman and Richland 2 school board member Michael H. Montgomery, hired as additional counsel for the state in a multimillion-dollar lawsuit filed against the Bank of New York Mellon.

Montgomery also was on the board of directors for Loftis’ nonprofit, The Saluda Charitable Foundation. That business association is the issue in question, said S.C. Ethics Commission director Herb Hayden.

Loftis faces a maximum fine of up to $2,000 and a public reprimand, Hayden said.

Shortly after taking office in 2011, Loftis filed the lawsuit asking for $200 million that he said the New York bank owed South Carolina. At the time, Loftis said the groundwork for the lawsuit began under the previous state treasurer.

In a 2013 settlement, the bank agreed to put $25 million back into the S.C. accounts and give the state discounts on future fees under a new 10-year contract, according to the Associated Press. The bank also paid $9 million to the state’s two attorneys.

The complaint alleges the relationship between Loftis and Montgomery is a close, personal relationship.

Griswold alleges Loftis and Montgomery are friends, citing a May 1990 sworn affidavit where Montgomery said he had represented Loftis since he was admitted to practice law in 1986.

This story was originally published July 23, 2015 at 12:11 PM with the headline "Ethics complaint alleges S.C. treasurer hired business associate to represent state."