SC treasurer committed impeachable offenses, senator says, but will House make a move?

A panel of South Carolina senators investigating the existence of a $1.8 billion account wanted to recommend Treasurer Curtis Loftis’ removal from office. The leader of the panel even says Loftis committed impeachable offenses.

But the group backed off of a removal recommendation at the request of Gov. Henry McMaster who wants to allow a task force he convened time to work to determine the origins of the money.

The investigation of the $1.8 billion account has soured Loftis’ relationship with the Senate once again. He may have support in the House or at least no one in leadership is calling for him to be ousted from his job now.

If lawmakers end up wanting to remove the treasure, they will have a couple of ways to make that move.

The state constitution allows the General Assembly to remove a statewide constitutional officer with two mechanisms. One is through impeachment, which would start in the House. Two-thirds of the 124-member House would have to vote to impeach for serious crimes or misconduct. Two-thirds of the 46-member Senate would then have to vote to convict in order to have a constitutional officer removed.

Lawmakers have another option to remove a statewide constitutional officer, through a process informally referred to as “impeachment-lite.” Two-thirds of both chambers could vote to remove a constitutional officer for willful neglect of duty. But the move also requires action by the governor.

Any moves to try to remove Loftis have been stifled, at least for now, by the governor, who put together a task force with the treasurer’s office, comptroller general’s office, Department of Administration and the state auditor to figure out the origin of the money.

“I thought that what we ought to do is to take the issue off the front pages if we could for a while and get everybody involved and we do what we do best is communicate, collaborate and cooperate; $1.8 billion is a lot of money,” McMaster told reporters Wednesday.

Did Loftis commit impeachable offenses?

When State Sen. Larry Grooms, R-Berkeley, presented a scathing report of Loftis, he said on the Senate floor he thinks the treasurer should resign from the job. While speaking to reporters, Grooms added Loftis could face impeachment for some actions.

Grooms points to the statutory violations listed in the interim report issued Tuesday, specifically how Loftis’ office did not provide the comptroller general’s office with accurate statements of cash transactions in the treasury, did not report to the General Assembly the existence of the $1.8 billion account as pertinent information, and did not publish a quarterly statement of how much money the state had on hand and at which banks money is deposited.

“There are probably some impeachable offenses that the treasurer has made and so we’re going to continue to take a look at at what has occurred and what is occurring and we’re going to get with members of the House of Representatives to get their feeling and their appetite for what they intend and what they would like to do,” Grooms said.

On Facebook, Loftis said his office plans to further respond to Senate’s interim report.

“My office is studying the report and will write a rebuttal, but the report is long, convoluted and based innuendo, facts not evidenced (sic) and intentionally confusing language and narrative,” Loftis wrote.

Loftis, in an interview with The State, said the moves made by Grooms may just be political payback. In 2010 Grooms defeated then Treasurer Converse Chellis, a former Dorchester County Republican state representative, who was elected treasurer by the General Assembly to finish the term of Thomas Ravenel.

“I beat his friend who had this office,” Loftis said in an interview with The State on Wednesday. “Then I exposed $250 million a year in fees, that were hidden, to Wall Street. We had the worst performing plan in the country, worst of the 40, and we’re paying the highest level fees. And he hates me for it. And they voted against me every time.”

Loftis has previously has had public battles with other officials before.

The Republican treasurer, who’s in his fourth term, while on the Retirement System Investment Commission was investigated by SLED for allegedly conspiring to make money off of the pension system. The investigation did not lead to charges.

Loftis has repeatedly criticized the contentious and at times combative recent Senate hearing where he was grilled for more than six hours over how he runs the office and about the $1.8 billion account.

“They accused me of breaking the law over and over. They accused me of bullying an auditor,” Loftis said. “They had carte blanche to say whatever it is they want to say because there are no consequences for their actions.”

“It is a difficult job in this environment to be the treasurer to have people that have no allegiance to the truth show false documents after false documents after irrelevant documents hold things up and say ‘you broke the law, you broke the law, you broke the law,’ and then you look at the document and it says nothing of the such,” Loftis added.

Does House share similar feelings on Loftis

The question will be how many allies Loftis has in the State House.

In the House, where Republicans hold 88 seats, formal discussions about what to do with Loftis have not taken place, said House Majority Leader Davey Hiott, R-Pickens.

The task force created by the governor is expected to be helpful and addressed some immediate concerns on how to move forward.

“I think when (McMaster) formed that committee it put most of the House members at ease. I think we’ll figure out from that task force where that money came from and where it belongs,” Hiott said.

Hiott added a caveat.

“If this task force finds there was some dereliction of duties or serious issues going on, we’ll discuss it at that time,” Hiott said.

Loftis may find some allies among the 17-member House Freedom Caucus. Loftis has attended events with Freedom Caucus members.

“I don’t think we have enough information, but the treasurer has been an advocate for the taxpayer since he’s been elected. And I think it’s imperative that we gather more information to figure out where we go,” said state Rep. R.J. May, R-Lexington, who serves as vice chairman of the Freedom Caucus. “But from day one, the treasurer has been an advocate for limited government for getting rid of ESG type investments and we’ll continue to fact find.”

But no formal vote by the House on the treasurer has taken place.

Prior to previous Comptroller General Richard Eckstrom resigning last year after disclosing he inflated the state’s cash balances by $3.5 billion over the course of 10 years, the writing was on the wall that lawmakers were ready to toss him out.

The House voted 104-7 to reduce Eckstrom’s salary to $1. Thirty-five of the state Senate’s 46 senators signed onto a resolution to remove Eckstrom for willful neglect.

Even though House members didn’t make a similar move during its budget deliberations in March, they will have another chance at the budget when it returns to the chamber after the Senate’s budget debate. A proposal on whether to reduce the treasurer’s salary would be a test vote on how much support the treasurer has in the House chamber.

State Rep. Heather Bauer, D-Richland, who proposed Eckstrom’s salary reduction last year, might consider the same move again this year.

“I think it’s a very good chance I will do that again, unless (Loftis) does what’s right and resigns first,” Bauer said.

State Rep. Chris Murphy, R-Dorchester, who leads a House Ways and Means panel that oversees the treasurer’s budget, said informal discussions are taking place among members of the House.

“We’ll see where it leads us. It’s a 50-50 call right now,” Murphy said. “There are some serious questions about how he has handled this situation and whether or not this is a one-time incident, or is this symptomatic of how he’s actually been running the entire agency.”

Murphy said historically Loftis has had a great relationship with House members, but the issue with the $1.8 billion has done him harm.

“I think he’s done himself some damage over this,” Murphy said. “It’s been made larger by the fact that he is stonewalled, that he’s deflected, he’s pointed fingers at everybody else.”

“We just need to see how it develops,” Murphy added. “It remains to be seen to whether or not he should remain in office for this term.”

Reporter Anna Wilder contributed to this article.