INVESTMENT COMMISSION’S FAILURE FINALLY UNDER LEGISLATIVE MICROSCOPE
Earlier this month we did (another) post on the sorry state of South Carolina’s pension fund … and efforts by S.C. treasurer Curtis Loftis to reform the corrupt panel which controls its investments.
We’re referring of course to the notoriously-corrupt S.C. Retirement System Investment Commission (SCRSIC) – which is effectively controlled by appointees loyal to S.C. governor Nikki Haley and powerful State Senate leader Hugh Leatherman.
Under their “leadership,” this fund as seen its debt (which was once as low as $300 million) soar to a whopping $22 billion. Meanwhile the fund’s value has plummeted – all while overpaid bureaucrats have been doling out massive fees to incompetent fund managers. In fact, South Carolina has consistently paid the highest investment fees in America – only to see its fund rank in the bottom third of large public pension funds in terms of return on investment.
That’s totally unacceptable – and Reynolds Williams (Leatherman’s appointee) and Ed Giobbe (Haley’s appointee) deserve the blame. That’s why we called for their resignations … three years ago.
Not only has this fund underperformed by $7 billion on their watch, but Williams and Giobbe have repeatedly attacked Loftis for performing his fiduciary duty to taxpayers.
Now it appears as though Loftis finally has some support in this critical battle – which is exposing taxpayers to massive new costs.
How’s that? Well, when this fund underperforms, state employees and their employers (a.k.a. taxpayers) are called upon to put more money into the pot.
State lawmakers appear to have finally had enough of the scam. In fact on the first reading of the S.C. House budget earlier this week, the corrupt SCRSIC was completely defunded.
That’s right …. the agency’s entire budget was deleted.
The next day House budget writers reconsidered and reinstated the budget – but then they voted to delete the salaries for the five SCRSIC commissioners. That’s eminently sensible. These commissioners make $20,000 per year (including a fancy license tag, travel and expense reimbursements). That’s exceedingly pricy compensation for a group that only meets between four to six times a year.
S.C. Rep. Gary Simrill, a budget writer and one of the House members who recently requested an audit of this troubled agency, made no bones about the rationale behind the House’s actions.
“The actions taken in the House while debating the budget voice the frustration regarding the commission and their apparent dereliction of duty in gambling state employees money away,” Simrill said.
In the aftermath of the House’s decision, the pension fund’s six-figure bureaucrats – including executive director Michael Hitchcock (who makes $300,000 a year) – were seen furiously lobbying lawmakers to put their money back in the budget.
Let’s hope they are unsuccessful …
We’re told to expect additional developments in this brewing battle. Stay tuned.
“I’m glad the House is angry,” Loftis told us. “They should be.”
As we’ve said from the beginning of this process, Loftis deserves tremendous credit for battling this powerful, corrupt establishment – even as its leaders were waging a non-stop vendetta against him. We’re glad his finally got some reinforcements in that battle.