SC treasurer petitions state Supreme Court to stop efforts to remove him from office

COLUMBIA — South Carolina’s treasurer is petitioning the state Supreme Court to halt efforts to remove him from office.

Treasurer Curtis Loftis filed the petition seeking an injunction Thursday, about a week and a half before the Senate is set to weigh whether Loftis “willfully neglected his duties” for his role in a $1.8 billion accounting error that went unreported for nearly a decade.

The court filing comes after senators initiated an obscure constitutional process known as “removal on address.”

“This injunction is about ensuring fairness, transparency, and adherence to the rule of law,” Loftis said in a statement. “I am asking the Supreme Court to step in and clarify whether the Senate is authorized to overturn a state election using this provision. The people of South Carolina deserve a process that upholds the law and the democratic principles they have entrusted to us.”

As an elected official, Loftis can’t simply be fired.

Instead, the Senate has invoked this procedure, which has a lower bar than impeachment and applies when an official commits willful neglect of duty rather than a serious crime.

In his statement, the treasurer criticized the procedures for the hearing, scheduled for April 21, for not allowing witnesses to be called, not allowing objections to be made and not requiring a quorum of members to be present.

Under the process, the governor must remove an executive officer from office if two-thirds of both chambers of the Legislature vote to remove him.

But it’s unclear what the House will do — if anything.

While some GOP House members have called the situation both frustrating and troubling, none have called for his removal. Only Democrat Rep. Heather Bauer of Columbia has introduced legislation calling on the House to start impeachment proceedings.

Amid the mess, Loftis told senators during a public hearing last April that he would not seek re-election in 2026. But he reversed course last week. Exactly one year after he pledged not to run, he said he’d changed his mind and will seek a fifth term to the post he first won in 2010.

The error

South Carolina’s accounting problems, which involved almost no actual money, came to light in 2022.

It started with a larger, $3.5 billion error included in annual reports given to Wall Street investors that double counted funds sent to the state’s public universities. That ultimately led to the 2023 resignation of Republican Richard Eckstrom, who had been the comptroller general — the state’s chief accountant — for 20 years.

Then, a panel of Senate investigators assigned to look into the matter turned their attention to the treasurer’s office.

During the changeover from the state’s legacy accounting system to a new one, a series of electronic ledger entries made it appear the state had $1.8 billion sitting untouched in a fund with no record of where it was supposed to go. The state’s financial officials never alerted the General Assembly to the issue.

But the entries were made in error, and all but $200 million of the money was never real, according to a forensic accounting firm hired by the state.

In the wake of the blunder, the U.S. Securities and Exchange Commission has launched its own investigation into the matter. The state could face penalties ranging from a hit to its sterling credit rating to hefty fines, depending on how severely the federal investigators view the issue.

‘Not unexpected’

Loftis has maintained he did nothing wrong, pointing the finger instead at other financial officers and even the senators conducting the investigation.

State Auditor George Kennedy tendered his resignation in January. But Loftis has remained defiant against calls for his own resignation.

Sen. Larry Grooms said Loftis’ petition to the Supreme Court came as no surprise.

“It’s not unexpected,” the Bonneau Beach Republican said. “But I don’t expect the court to tell the Senate it can’t conduct a hearing that is prescribed in the state constitution.”

In his petition, Loftis argues that constitutional section applies only to “state officers elected by the General Assembly” and “has certainly never been applied to statewide elected officials.” The court documents cited a section of state code as evidence.

Senate President Thomas Alexander, who was named in the petition due to his leadership position, declined to comment on the pending litigation.