By Paul Gable
Early reporting on a recently released report by S.C. Inspector General Patrick Maley heralds no criminal wrongdoing at the S.C. Retirement System Investment Commission (SCRSIC) but acknowledges a dysfunctional relationship with S.C. Treasurer Curtis Loftis.
The report was generated three months after Loftis sent the Attorney General’s Office a 37 page complaint listing multiple potential misconduct “red flags” at the commission over a several year period.
While the report claims no criminal misconduct, it acknowledges a toxic relationship between Loftis, a statutory member of the commission, and remaining commission members.
A marvelous example of bureaucratese, in our opinion, the report does point to valid complaints by Loftis about limited information being provided to him as well as acknowledging a legitimate debate exists over investment strategies of and high fees paid by the SCRSIC.
South Carolina’s pension system routinely is ranked near the bottom of investment results and near the top of fees paid by independent rating agencies and think tanks around the nation.
Loftis has been critical of this type of performance (or non-performance if you wish) by the SCRSIC since campaigning for treasurer in 2010.
The genesis of the “toxic” relationship can be placed firmly at the feet of the SCRSIC.
Shortly after Loftis took office as treasurer in January 2011, commission members and officials alleged wrongdoing by Loftis and an investment professional in Charleston for allegedly masterminding a “pay for play” scheme for firms wishing to do business with the SCRSIC.
The allegations were investigated by the S.C. Attorney General’s office with both Loftis and the investment professional being completely exonerated of all allegations.
Last year, Loftis provided the Attorney General’s office with evidence he (Loftis) believed demonstrated SCRSIC chairman Reynolds Williams and a law partner privately profited from an investment decision of the commission. That investigation remains open although we hear SLED completed an investigation of the allegations and its report rests in the AG’s office.
Investment commission COO Darry Oliver was quoted in a media outlet at claiming the report “completely exonerated” the commission and “debunked” Loftis’ claims.
Actually, it doesn’t. Serious problems remain at the SCRSIC with respect to its performance in managing the investment of the public pension fund’s approximately $25 billion in assets and the approximately $15 billion shortfall in future liabilities.