After a $1.8 billion error, could South Carolina Treasurer Curtis Loftis be impeached?
For the last year, close watchers of South Carolina’s politics have been on the edge of their seats, waiting to discover the source of $1.8 billion that was mysteriously discovered in a state bank account.
How did it get there? Why didn’t officials, especially the state treasurer, not know about it?
Now, after the state spent $3 million trying to answer those and other questions, it appears that most of the money — all but approximately $200 million — never existed at all. It was an accounting error created sometime between 2015 and 2016 as the state transitioned to a new bookkeeping system, according to a report produced by an investigation conducted by AlixPartners, an outside consulting firm.
But this revelation has only raised more questions, one of which is what will happen to embattled state Treasurer Curtis Loftis, the man who has been widely blamed for the error. Inside the State House, some have floated the prospect of impeachment, but there appears to be little consensus about whether Loftis should be impeached, much less a roadmap on how it would be done.
State Rep. Heather Bauer, D-Richland, filed a bill Jan. 16 to direct the House Judiciary Committee to open an inquiry into whether Loftis should be impeached.
Bauer told The State that impeachment is necessary because of the scale of the problem, which is forcing South Carolina taxpayers to spend millions to fix it.
Loftis has consistently defended his actions. In a speech last week before the Legislative Black Caucus, Loftis said “to be very clear, there is no mystery bank account with $1.8 billion in it. It’s never existed. It never will exist. Every dollar, every dime that the State Treasurer’s Office has is in our books. You can find it anytime that you want to.”
Although most of the money never existed, Loftis said last year that it had generated $250 million in investment earnings. This statement in particular has drawn scrutiny from lawmakers, who are questioning what Loftis knew about the missing money at that time.
“This is not about the error when it was made… this is about what happened ten years following that error and not fixing it and covering it up and lying under oath,” Bauer said. “If this happened at my job, or at IBM or Apple they would be fired today.”
But others have been less eager to pursue that route.
Following the release of the AlixPartners report last week, state state Rep. Micah Caskey, R-Lexington, said, “I think it’s premature to say who should lose jobs.”
On Thursday, state auditor George Kennedy III resigned from his position. Kennedy, who answered to the Office of the Treasurer and the state comptroller general, said he believed the move was “in the best interest” of his office.
Can Loftis be impeached?
Were representatives to take up impeachment, the General Assembly would be wading into largely uncharted territory.
No elected official in South Carolina has been impeached in living memory, according to several lawyers and others who follow state government. The closest was Gov. Mark Sanford, who avoided impeachment in 2009 following revelations that he instructed staff members to mislead the media and public regarding his whereabouts. Rather than “hiking the Appalachian Trail,” Sanford — then a married father of four — was in Buenos Aires, Argentina, carrying out an affair.
The House Judiciary Committee voted 18-6 not to impeach Sanford, and instead simply censured the lame duck governor, who had 13 months of his term remaining.
Determining how this process could play out is also complicated by the fact that there is no set process between states for impeaching an elected official.
“States are laboratories of experimentation in enforcing and implementing their state constitution,” said Scott Bauries, a professor of constitutional law at the University of South Carolina law school. “You got probably fifty different approaches to most problems.”
South Carolina’s process for impeachment is designed similarly to the federal process.
An elected public official who has committed “serious crimes or serious misconduct in office” can only be impeached following a two-thirds vote of the House of Representatives, which functions like an indictment. If all 124 House members voted, 82 votes would be needed for an impeachment. This standard for impeachable crimes is roughly equivalent to the phrase enshrined the Constitution of the United States, which permits the president or vice president to be impeached for “high crimes and misdemeanors.”
Following a House vote for impeachment, the official is suspended from office and faces a trial before the Senate. Two-thirds of senators are required to vote for conviction in order to remove the official from office. If all 46 senators vote, 31 votes would be needed to convict.
Unlike with impeachment efforts in Congress, the processes for S.C. House impeachment proceedings and a Senate trial are unspecificied.
While stripping an official of their position is the only punishment the legislature can impose, impeachment does not prevent other agencies from pursuing criminal action.
What are the other options?
Loftis has already indicated that he does not intend to run again for treasurer in 2026.
But Bauer said that letting Loftis simply serve out his term sends the wrong message given the gravity of what’s described in the AlixPartners report and its consequences.
“The longer we wait, the more we pay,” Bauer said. In 2023, state Comptroller General Rick Eckstrom resigned when it was revealed that he had inflated the state’s cash balances by $3.5 billion.
While a full impeachment is reserved for serious crimes and serious misconduct, South Carolina’s governor has the power to remove an elected official following a two-thirds “address” by both the House of Representatives and the Senate for “willful neglect of duty” or other “reasonable cause” that isn’t sufficient grounds for impeachment.
But with little to no case law to draw from, the line between willful neglect and misconduct in office is “pretty fuzzy,” said Bauries.
“In this circumstance, I would think that removal would be more likely than an impeachment,” said Jay Bender, a prominent Columbia area lawyer who deals with constitutional matters.
But while the impeachment or removal process is a legal proceeding, it is “impossible” for elected officials to be impartial in those moments, Bauries said.
“It’s sort of unrealistic that we designed the process this way and asked for impartial adjudication by a bunch of politicians. That being said, they always try to do a good job.”