South Carolina

Ethics complaint against SC treasurer continues

State ethics officials said Wednesday they want more questions answered before they decide whether to dismiss an ethics case against S.C. Treasurer Curtis Loftis.

The complaint accuses the Republican of breaking state ethics laws by using his office to help a long-time friend and business associate get a job representing the state in a lawsuit.

Gregory Harris, an attorney for Loftis, asked the S.C. State Ethics Commission to dismiss the complaint, arguing Loftis did not break state ethics laws when Michael Montgomery, a former Richland County councilman and Richland 2 school board member, was hired as additional counsel for the state in a multimillion-dollar lawsuit against the Bank of New York Mellon.

In a sworn statement included in the motion to dismiss, Loftis says he never used his office “to gain an economic interest for a personal associate.”

Loftis also said he did not request that Montgomery get the job. The attorney handling the lawsuit for his predecessor – S.C. Treasurer Converse Chellis – “asked both me and the attorney general of South Carolina” for permission to hire Montgomery to help represent the state in the case, Loftis said in the statement.

The attorney handling the case – Mitchell Willoughby – also provided a sworn statement saying he made the decision to hire Montgomery, without recommendation or coercion from anyone.

However, the Ethics Commission decided there still were unanswered questions about whether Loftis and Montgomery had business ties beyond their friendship and work together on a nonprofit that Loftis started almost two decades ago. One commissioner also asked why Loftis did not disclose his relationship with Montgomery.

A public hearing has been scheduled for June. But that may be postponed, said Ethics Commission director Herb Hayden.

In light of the remaining questions, the commission and attorneys for Loftis will meet before moving forward with a public hearing.

“If they are in business together, that needs to be fleshed out,” said Ethics Commission member Frank Grimball.

J. Samuel Griswold, a state retiree and former deputy executive director of the S.C. Budget and Control Board, brought the complaint against Loftis, alleging the Lexington Republican violated state law that says public officials cannot use their official office to obtain economic interest for “an individual with whom he is associated.”

Last year, the Ethics Commission decided to investigate the complaint.

Montgomery worked on a lawsuit that the Treasurer’s office filed, asking for $200 million that Loftis said the New York bank owed South Carolina.

In a 2013 settlement, the bank agreed to put $25 million back into South Carolina’s accounts and give the state discounts on future fees under a new 10-year contract, according to the Associated Press. The bank also paid $9 million to the state’s two attorneys, including Montgomery, who was paid $2 million.