Will SC House join calls to remove Treasurer Curtis Loftis after most of $1.8B didn’t exist?
After confirmation that most of a mysterious $1.8 billion did not exist, calls for the removal of Treasurer Curtis Loftis, a Republican, were renewed.
But House Speaker Murrell Smith, who called the accounting errors incompetence, still would not call for the removal of Loftis as lawmakers are now reviewing a report from independent outside forensic auditor AlixPartners.
“This is just accounting errors that have been compounded over a number of years,” Smith said. “There were some recommendations that we received from AlixPartners. We are reviewing those recommendations and intend to enact those recommendations as soon as possible.”
“I think it’s important to note, this is not any fraud, this is not a misrepresentation, that this is just incompetence, in errors that have occurred over a period of time,” Smith added.
State Rep. Heather Bauer, D-Richland, who tried to get Loftis’ salary reduced to $1 last year, filed a resolution calling for impeachment.
State Sen. Larry Grooms, R-Berkeley, who led a Senate Finance Committee panel that investigated $1.8 billion last year, renewed his call for Loftis to resign.
House Republicans, who hold a supermajority, have yet to make that jump.
“I think it’s premature to say who should lose jobs,” said state Rep. Micah Caskey, R-Lexington. “We’ve had this report for less than 24 hours. I think it would be irresponsible to jump out and say people should lose their jobs.”
Dave Bligh, a director with AlixPartners, said the issue of the $1.8 billion was known by the treasurer, comptroller general and the state auditor offices.
“We see this as a shared fault,” Bligh said. “We see this as a shared awareness.”
It appears House Ways and Means Committee members will be the first to question entities who were aware of the accounting error as they make their budget presentations.
Smith said the House’s investigation is just beginning, which will include hearings, the first of which was Thursday with AlixPartners, who was hired to carry out an independent audit.
“Everything’s gonna be on the table. We’re going into this process. There’s no preconceived notions other than we need to act, enact the recommendations to make sure that this does not happen again,” Smith said.
The comptroller general’s office, treasurer’s office and state auditor will have to make their annual budget presentations in front of a House Ways and Means panel.
“We are going through this deliberately and methodically. You know, in this business, there’s a lot done for political purposes, but in the end of the day, our responsibility is to govern this state and ensure we do what’s best. And unfortunately, that’s not always conducive to quick action,” Caskey said.
The House last year also passed legislation to remove the state auditor from being under the purview of the treasurer and comptroller general. But the bill did not cross the finish line.
Similar legislation has been filed this year, and making the change is one of the recommendations by AlixPartners.
In 2023, when Richard Eckstrom disclosed the $3.5 billion overstatement of cash balances, the House voted to reduce Eckstrom’s pay $1. The House Judiciary Committee also had planned to have a panel of lawmakers start considering the Eckstrom impeachment resolution.
Senators also planned to start removal of Eckstrom because of willful neglect of duty. But Eckstrom resigned before removal proceedings could take place.
The same momentum does not exist around Loftis, at least as of now.
Loftis maintains a strong social media presence and following, support which did not exist for Eckstrom.
Smith said that social media following would not influence the House’s actions.
“There’s politics and there’s government, and we’re going to govern, and so we’re not going to worry about what the political consequences are, we’re going to worry about the state of South Carolina,” Smith said.
Because of the questions surrounding the state’s financial books, the Securities and Exchange Commission is investigating the state’s finances. Lawmakers also have worried that the state’s credit rating could be affected.
Last year, Loftis said the $1.8 billion had been invested and generated up to $250 million in earnings. But with most of the money not existing, questions arise over how that was possible and whether Loftis lied under oath.
State Rep. Chris Murphy, R-Dorchester, who leads the House Ways and Means panel that oversees the auditor, comptroller general and treasurer’s budget, said it is possible that Loftis will be put under oath when he makes his budget presentation.
“He made some statements that were that we ..., know that were false, and we relied on those statements,” Murphy said. “There needs to be some accountability, so that will be something we will consider.”
Dave Bligh, of AlixPartners, was more blunt.
“I don’t believe there is anyway it could have earned any money on those investments or on that balance, because it does not represent real cash,” Bligh said.
On Facebook, Loftis said the $1.8 billion was real money.
“It existed in an accounting fund ... not a mysterious bank account!” Loftis said.
