South Carolina Senate votes to remove state treasurer over $1.8B accounting error

COLUMBIA, S.C. — South Carolina's Republican-dominated Senate voted 33-8 on Monday to kick the Republican treasurer out of office over a $1.8 billion accounting error.

It will now be up to the House, also dominated by the GOP, to decide whether to hold its own hearing. If at least two-thirds of its members vote against Treasurer Curtis Loftis, he will be removed from office.

Monday's extraordinary hearing was the culmination of over two years of investigation by the Senate that began when state accountants unintentionally exaggerated money given to colleges and universities by $3.5 billion.

That led to the discovery of an account error that started a decade ago when the state was changing from one accounting system to another. If accountants couldn't balance the entries in the two sets of books as they moved thousands of accounts with different definitions, they kept adding it to a special account year after year until it grew to $1.8 billion.

It took forensic accountants, who were paid millions of dollars in fees, to finally unravel that nearly all of the money was not real cash but just an accumulation of errors.

An extraordinary hearing

Two Republican senators led the call for Loftis to be kicked out of office, saying he can no longer be trusted to handle South Carolina's bank accounts. They charged that he is incompetent and never reported the mistakes to lawmakers as required by law while refusing to take accountability.

''He's a liar that was so concerned with his public appearance that he would do and say anything to cover up his mistake,'' Sen. Stephen Goldfinch said.

Senators followed the presentation with their own questions. Most of the eight senators asked Loftis directly why he didn't take responsibility for the error and why he let others inform the Senate. Loftis said that was the responsibility of other officials.

''It's everybody but me. And maybe that's so, but it is so hard to defend ... in a ‘can he do the job' (sense)," Republican Sen. Luke Rankin told Loftis. ''Help me, help us. Accept the responsibility."

''Would you tell me what you want me to take responsibility for, because it is complicated,'' Loftis replied.

Treasurer's defense

Loftis has called the Senate investigation a witch hunt. He repeatedly said no money went missing and the errors were not made in his office, although others have testified differently. The treasurer said continuing to focus on the mistakes threatens the state's strong credit rating.

Loftis' lawyers opened the treasurer's case with a photo of Loftis and Republican President Donald Trump. They compared the hearing to coups in Zimbabwe and Myanmar that threw out elected officials and said Loftis' real judges should be the voters in the Republican primary in 14 months. Loftis said he is now running for reelection after testifying to senators this would be his last term.

Fellow lawyer Johnny Gasser reminded the 34 Republicans in the 46-member Senate that nearly every vote cast for them also was a vote for Loftis.

''Do you really want to go down this path?'' Gasser asked.

The vote

Eight Republicans voted against removing Loftis, with the rest of the Senate finding Loftis committed ''willful neglect of duty." They sent the matter to the House, which must also hold its own two-thirds vote to remove the treasurer.

No office holder has been removed in this way since South Carolina became a state 235 years ago.

Republican leaders in the House have not indicated whether they will take up the matter.

More arguments

The state's books still haven't been fully straightened out, and accountants continue to struggle with Loftis' office and how they handle bank accounts, Sen. Larry Grooms said.

The treasurer is trying anything to protect his 14 years in office and reputation as a competent conservative steward who is always looking out for taxpayers, Grooms said.

''Because of his failures, the self-proclaimed best friend of the taxpayer is costing the taxpayers tens of millions in legal, auditing and oversight fees,'' Grooms said. ''With friends like this, who needs tax-and-spend liberals.''

Lofits, without going into details, said he knew his actions fell short of expectations at times. He promised to do a better job in the future as he spoke for about 10 minutes on Monday from a temporary lectern in the back of their chamber

He said the times he misspoke or slammed papers or accused senators of a witch hunt were just his passion for fighting an injustice.

''I hope all of us in this room agree that we should rise above the moment and return our focus to what matters — serving the people of South Carolina with honor, respect and purpose,'' Loftis said.