After release of scathing report, McMaster still maintains confidence in SC treasurer

COLUMBIA, S.C. — The day after the release of a scathing report that puts blame on Treasurer Curtis Loftis for a $1.8 billion debacle, Gov. Henry McMaster said he still has confidence in the ability of South Carolina’s elected treasurer to control the state’s money.

But McMaster is calling on Loftis to communicate and work with other state agencies to resolve the issue — something a group of state senators and South Carolina’s comptroller general claim the treasurer has been loath to do to this point.

For months, a Senate subcommittee has been investigating nearly $2 billion in taxpayer money with no known owner and which lawmakers didn’t know about until last fall.

In a report it released Tuesday, the group holds Loftis responsible for this discrepancy, saying his office created the fund containing the money several years ago but never notified the legislature of its existence.

Loftis has claimed he invested the money and generated around $200 million in interest, which he said the legislature has spent, and asserted Comptroller General Brian Gaines, the state’s accountant, bore responsibility for telling lawmakers about it, which Gaines did last October.

In a statement, Loftis said he did not plan to read the report, though his staff would, and decried it as character assassination from a group of lawmakers set on overturning his election to install their own puppet to control the state’s money.

In the report, senators outlined a series of interim recommendations, including a forensic audit to determine the money’s ownership, but they stopped short of calling for Loftis’ removal from office, at the governor’s request.

Sen. Larry Grooms, R – Berkeley and the chair of the subcommittee, said had McMaster not asked them to hold off, it would have been among their recommendations.

The governor made the request after forming a new task force last week, and he wants to give it time to work.

“The main thing is not to, at this point, is not to point blame or try to find error, but to find out the answers about the money: where is it, where was it supposed to go, did any of it get to where it was supposed to go, what was it supposed to be used for, and if it’s really there,” McMaster told reporters Wednesday.

The multiagency group — led by the Department of Administration and including both Loftis and Gaines, at whom the treasurer has assigned much of the blame — has been charged with determining where this money came from by July 1.

“We have to get those answers,” McMaster said. “Otherwise, the public is going to lose complete faith in the system. That’s $1.8 billion.”

The newly released Senate report details that days after a contentious, hours-long hearing between Loftis and Grooms’ subcommittee earlier this month, the treasurer threatened to publish sensitive information on the state’s finances online.

McMaster had to get on the phone to try to stop him, briefly describing their conversation Wednesday.

“That it would be dangerous to do that, and I wish he wouldn’t do it,” the governor said he told Loftis, confirming the story Loftis claimed in a Facebook post Tuesday is “a bold faced lie.”

Grooms said South Carolina’s top law enforcement officer, SLED Chief Mark Keel, and Attorney General Alan Wilson also had to intervene to stop Loftis, and the treasurer ultimately did not publish the information.

Yet McMaster said he still has confidence in Loftis.

“I think as long as we all work together — communicate, collaborate, cooperate, and work for the people and quit fighting among ourselves — we’re going to be just fine,” he said.

When asked what would happen if the task force did not meet McMaster’s July 1 deadline to determine the money’s ownership, the governor said he was confident they would have answers by then.

But Grooms said he did not believe that was feasible and that the only question they may be able to figure out by then is whether and how much of the money is actually real.

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