A defiant SC treasurer says other officials have shared inaccuracies over $1.8B error
South Carolina State Treasurer Curtis Loftis accused other officials of publicly providing inaccurate information over the course of the investigation of the state’s $1.8 billion accounting error.
Loftis’ office issued its own report over the state’s accounting issue ahead of his testimony in front of a Senate Finance panel investigating the yearslong accounting issues.
But those on the panel did not seem to buy his arguments during a hearing Thursday that predictably became heated with repeated cross talk by state Sen. Larry Grooms, R-Berkeley and Loftis.
In the report’s executive summary, the treasurer’s office says statements by certain state officials about the flow through fund “have been ambiguous, misleading, and often inaccurate, resulting in significant misunderstandings among stakeholders.”
At one point it insinuates Comptroller-General Brian Gaines lied to lawmakers and has obstructed the treasurer’s office.
“Comptroller General Brian Gaines has consistently provided inaccurate communications and under-oath testimony to the Subcommittee regarding (a flow through fund), attempting to place undue blame on the Treasurer for the CGO’s errors,” the treasurer’s office report said.
The treasurer’s report said Loftis never concealed or attempted to conceal any annual financial reporting fund balance and did not intend to release sensitive financial information that would have put the state at risk.
“The manner in which the subcommittee has chosen to undertake its ‘investigation’ has been inappropriate and may be actively endangering the State’s interests,” the treasurer’s report said.
The report by the treasurer’s office is in response to an AlixPartners report that found most of the $1.8 billion erroneously listed in a fund did not exist. However no money was ever missing. It also said the external auditor that works with the state auditor’s office, the treasurer’s office and comptroller general office were aware of the accounting issue.
Previous Comptroller General Richard Eckstrom resigned in 2023 over a $3.5 billion accounting issue and state Auditor George Kennedy resigned after the AlixPartners report was issued.
The General Assembly has already started addressing the fallout of the accounting issues.
Both chambers approved a measure to hire an outside firm to act as a financial compliance officer to oversee the comptroller general, treasurer and state auditor’s office as the state is under investigation by the Securities and Exchange Commission because of the accounting issues.
The House has passed a bill to make the auditor a position appointed by the governor. It’s under consideration in the Senate.
At one point during Thursday’s hearing Shawn Eubanks, attorney for the treasurer’s office who sat with Loftis, was warned he could confer with the treasurer but not testify unless he went under oath. Grooms even threatened to have Eubanks removed if he continued to speak to the panel and additional security came into the room.
During the hearing, Senate Democrats posted a sign outside of the hearing room with the cover of a book called “How to Steal a lot of Money Legally.” The forward of the book was written by Loftis and the sign also said “Book Signing Here.”
The South Carolina Democratic Party launched a website Thursday calling for the firing of Loftis.
“You lied to this committee, and you’ve come back and you’ve said that someone else lied, and you’ve pointed the finger,” state Sen. Margie Bright Matthews, D-Colleton said. “I got a problem with you allowing your staff to present us with information, and then you come before us, and you seem to get angry when we read their information and accepted what they say, and then you now say that we’re reading the wrong things and we’re seeing the wrong things.”
The hearing also drew the attention of House members as the General Assembly’s other chamber has wrestled on whether to join calls for Loftis’ removal. Seveal members of the House including state Rep. Heather Bauer, D-Richland, state Rep. Bill Hixon, R-Edgefield, state Rep. Jordan Pace, R-Berkeley, and state Rep. Richie Yow, R-Chesterfield, were in the hearing room.
Loftis again bemoaned how the investigation into the state’s accounting issues has taken place in public leading to media attention and causing embarrassment among those in the financial world.
“Seems like, Mr. Treasurer, every time you get boxed into a corner, you retaliate. ‘I’m going to release the state’s financial data. I’m not going to issue long-term bonds anymore. It’s going to cost the state millions of dollars.’ Every time people start looking at you, you tend to retaliate,” said state Sen. Stephen Goldfinch, R-Georgetown.
In response, Loftis said the Senate should be ashamed.
“I don’t know how other senators can sit in there (and) watch this. I don’t understand. This is child-like, and there are real consequences,” Loftis said.
Grooms said he expects his panel to issue a final report on the accounting issues in the coming weeks. Last year’s interim report did not include a removal recommendation, but Grooms already has said he wants Loftis gone.
“If this committee could instruct you to do something, it would be to resign your position as Treasurer of the State of South Carolina,” Grooms said during the hearing.
A defiant Loftis responded.
“It’s not going to happen because I’m not gonna let you get your fingers on $54 billion,” Loftis said. “It’s my job. I swore an oath. I’m gonna protect this money, and I know what Senate Finance is going to do with this money. Y’all been, y’all been chasing me for 15 years.”
