S.C. Treasurer Curtis Loftis apparently wasn’t the only one trying to get to the bottom of the mess over at the S.C. Retirement System Investment Commission (SCRSIC) – the government bureaucracy responsible for (mis)managing the Palmetto State’s underperforming pension fund.
Mallory Factor – the Charleston, S.C. businessman who was accused last week of running a “pay-to-play” scam involving Loftis – was also attempting to find out how the commission was conducting its affairs.
In fact, prior to “pay-to-play” allegations being leveled against him, Factor asked the S.C. Legislative Audit Council (SCLAC) to conduct a review of the commission’s finances. Factor sits on the governing board of the SCLAC, which frequently conducts audits of government agencies.
That makes sense … after all, The SCRSIC is asking for nearly $20 million in the FY 2012-13 budget, nearly four times what it received in last year’s budget. And while it has been busy expanding its bureaucracy, the commission has also been dramatically ramping up the management fees that it pays to various investment firms.
In fact South Carolina paid out $343.6 million in fees last year – or 1.3 percent of its assets. By comparison, Virginia’s $54 billion pension fund paid less than half that percentage in fees.
Prior to taking this particular political hatchet in his back, Loftis had been investigating this discrepancy as part of a broader inquiry into the fund’s deteriorating performance. Now it looks as though Factor was complementing this investigation by calling for an audit of the commission’s budget.
Hmmmm. No wonder an associate of the fund’s former CEO – who was forced from his $485,000 a year post as a result of Loftis’ investigation – decided to accuse them of nefarious activity.
The only think we’re scratching our heads at?
Why the state’s mainstream media fell for the ruse so easily …
Anyway, while we wait on the S.C. State Law Enforcement Division (SLED) and the S.C. Attorney General’s office to formally clear Loftis, it’s becoming increasingly clear that the assault against him (and Factor) was more than just political payback – it was actually a preemptive strike aimed at deflecting attention from the real scandals taking place at this agency.
Unlike S.C. Gov. Nikki Haley and Comptroller General Richard Eckstrom (whose investment commission appointees have been “going along to get along“), Loftis has been pushing ever since he was elected to fix the very serious problems that exist with respect to this fund.
On the one hand, he’s proposed several reforms that would reduce its unfunded liabilities while on the other hand he’s argued for wiser asset allocation in an effort to generate a better return on the fund’s investments.
Such common sense ideas ought to be embraced … not attacked. Unfortunately this is South Carolina, where good ideas go to die.