Where did $1.8 billion go? A South Carolina Senator says the state treasurer breached public trust

A South Carolina Senator said the elected state treasurer has breached the public trust after lawmakers didn’t get much clarity Tuesday about how $1.8 billion moved through a state bank account over the past decade — without anyone knowing where it came from or was supposed to go.

For six hours, Republican Treasurer Curtis Loftis answered questions, sometimes yelling at senators, and other times saying he didn’t have the answers. He told the chamber he wasn’t given information he requested to try to untangle the mess that started as the state shifted accounting systems in the mid-2010s.

But he left before Republican Sen. Larry Grooms summed up the day by saying, “Apparently Mr. Loftis has lost control of the state treasury,” and the General Assembly can’t rely on him to solve the problems he created.

“Mr. Loftis has abrogated his responsibility as a state treasurer. He has breached the public trust,” said Grooms, a powerful Republican elected in 1997.

Accountants are still trying to untangle the $1.8 billion mess, but it appears that every time the state’s books were out of whack, money was shifted from somewhere into an account that helped balance it out, state Senate leaders have said. In a different problem, the state was double-counting higher education money to the tune of almost $4 billion.

Comptroller General Brian Gaines, who took over for the elected Republican director after he resigned when the accounting errors started to emerge last year, opened the meeting speaking for about 10 minutes. He promised to continue to help senators in any way to unravel the mess and said the account in question where the $1.8 billion went was created by the treasurer’s office.

Loftis followed, telling the senators repeatedly that it isn’t his responsibility to balance the books and that he can’t get any information out of the comptroller general’s office.

Loftis asked for more time to find answers and then yelled at senators for suggesting he wasn’t telling the truth. He argued against the chair’s claim that there were identical reports with the same numbers and begged the Democrats on the subcommittee to come to his rescue.

“I have no power here,” Loftis said. “All I’ve had is six or seven hours of ‘Gotcha, gotcha, gotcha.’”

Grooms said lawmakers are still trying to figure out the scope of the problems. He suggested the state’s accounts were out of balance in the negative when the past fiscal year ended — and billions of dollars of mistakes have been made both for and against the state’s favor.

Loftis angrily denied that, pounding the lectern and saying he was being ganged up on.

“Senators, I’m at a bit of a disadvantage. Six people can ask me any question about the last 14 years,” he said.

At one point, Loftis insisted his report was right and the Senate’s report, which lawmakers said had identical numbers, was wrong.

“Senator from Colleton, I submit the treasurer might have trouble with addition,” Grooms told a colleague.

Loftis said that his job is to be the state’s banker and investment chief and that the comptroller general reconciles the books. Loftis said the comptroller general also refused to share key information, an allegation the other agency denies.




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