COLUMBIA — The commission that oversees the state retirement fund is suing South Carolina Treasurer Curtis Loftis, arguing he’s breaking the law for refusing to sign a check for an approved investment.
In an unprecedented move, the Retirement System Investment Commission asked the state Supreme Court in documents filed Thursday to take the case directly and order Loftis to write a check to private equity firm Warburg Pincus.
The commission’s chief operating officer Darry Oliver says $11.7 million must be paid by Tuesday, or the state will be in default. Meanwhile, additional interest of $1,600 a day, which began April 1, continues to accrue, he said.
“The trust fund’s already suffering loss and waste right now because the delay is increasing the cost,” Oliver said.
Loftis’ spokesman said the treasurer had no immediate response. Loftis voted with his fellow commissioners last November to approve a commitment of up to $50 million. But he’s since said he wants more assurances the state won’t overpay on investment fees before sending the money.
Oliver said the commission has repeatedly attempted to address Loftis’ concerns by providing hard copies of emails he requested, as well as postponing the deal’s scheduled March 4 closing to give Loftis more than two additional weeks to review the documents. The deal was eventually closed March 28.
The commission argues Loftis’ only role now is to open up a new account and write the check.
The first-term Republican treasurer repeatedly notes that he’s the official custodian of the state’s money. But the commission contends that’s an administrative task with no special powers.
“The treasurer does not have any authority or discretion to approve, review, ratify, or veto the investment decisions of the commission through the power of the checkbook,” the lawsuit reads.
Loftis’ “refusal to perform his ministerial duty has created an unprecedented potential default and crisis for RSIC, an unacceptable risk and, most importantly, significant harm to the retirement system, its participants and beneficiaries, and the state,” it alleges.
It’s the latest episode in an ongoing feud between Loftis and his fellow commissioners. Loftis, in his first political office, has complained for more than a year that the commission pays too much in management fees for its investments. But other commissioners say the fees serve as incentives for managers to invest wisely, with bonuses given for successes.
Loftis has threatened for months to stop writing checks on signed investment contracts. The threat initially involved his demand that the commission give his treasurer’s office staff full access to all contracts. Access had been limited to commissioners and that agency’s staff, with the commission citing confidentiality agreements.
In February, the commission voted to censure Loftis for what it called “false, misleading and deceitful” comments. Loftis fired back that he would not be silenced.