By Paul Gable
The anticipated showdown Tuesday between S.C. Treasurer Curtis Loftis and the S.C. Retirement System Investment Commission over transparency of investment details by the commission did not happen.
Loftis, a voting member of the commission, was holding out on signing a check for a $50 million investment, approved by the commission, until he received certain assurances in writing from commission attorneys.
As a result of Loftis’ initial refusal to issue the check and an impending default deadline for the investment, the remaining SCRSIC commissioners sued Loftis to force him to act.
When briefs were filed with the S.C. Supreme Court, which took original jurisdiction in the case, certain sworn affidavits included with SCRSIC filings satisfied Loftis’ requirement for “legal sufficiency.” Loftis ended his holdout Monday by signing the check, less than one day before the case was to be heard by the justices.
With the release of the funds by the treasurer, the case became moot and the justices dismissed the entire action.
However, the underlying dispute between Loftis and the other commissioners remains. Loftis is the official custodian of state funds and, as such, carries a fiduciary responsibility to ensure those funds are protected.
The remaining commissioners, all political appointees and supposed investment professionals, assert Loftis’ custody is administrative only and does not extend to potentially vetoing actions of the commission.
It is an interesting dispute, one the S.C. Supreme Court refused to rule on.
Those of us with any age remember it was investment professionals that gave us junk bonds and the savings and loan industry collapse of the 1980’s, the dot-com bubble and collapse of the 1990’s and the housing bubble and collapse as well as the Enron, Madoff and other Ponzi schemes of the 2000’s.
After the dismissal was handed down, Loftis said in a press release, “The assets of the Treasurer’s custody account are valued at approximately $40 billion dollars. Standardized forms, policies and procedures are common banking practices across South Carolina and the public’s treasury should be no different.
“The Retirement System should never pay more fees than were approved. As State Treasurer it is my fiduciary responsibility to protect these funds which represent the life’s work of hundreds of thousands of South Carolinians. I look forward to working closely with the Investment Commission in streamlining these common sense safety measures so that we may better protect the fund.”
The full S.C. Supreme Court opinion may be viewed here: http://www.sccourts.org/opinions/HTMLFiles/SC/27242.pdf