Remember the Red Bluff plantation?
We wrote about this boondoggle nearly five years ago as an example of corruption involving South Carolina’s catastrophically mismanaged state pension fund (which received an $826 million annual bailout from Palmetto State taxpayers earlier this year).
McMaster has since called for several long-overdue pension fund reforms, but these measures are unlikely to pass given that taxpayers have already been placed on the hook for its bailout. In fact, fiscally conservative State Senator Tom Davis (who also urged McMaster to veto the tax hike) slammed the governor’s delayed reaction regarding the pension fund debacle – calling it “nothing short of gubernatorial malpractice.”
Anyway, Red Bluff – a 6,400-acre plantation and forest located between the Wright River and New River in Jasper County, South Carolina – was purchased in 2011 by a company called American Timberlands.
This is a company which received $30 million from the notoriously corrupt S.C. Retirement System Investment Commission (SCRSIC). In fact the leader of this panel, Reynolds Williams, benefited directly from the deal.
Reynolds’ Florence, S.C. law firm did approximately $120,000 worth of legal and title insurance work related to the Red Bluff property – despite clear legal and ethical prohibitions against fund trustees participating in such activity.
S.C. treasurer (and pension fund watchdog) Curtis Loftis did his best to sound the alarm on the corrupt Red Bluff deal at the time. Unfortunately, no one listened to him … just as they failed to heed his repeated warnings regarding the solvency of this fund.
(Click to view)
(Via: S.C. Treasurer)
Loftis has consistently fought against state pension fund managers’ foolhardy “alternative investment” portfolio – advising them to follow a more conservative investment strategy, one that didn’t rely so heavily on exorbitant fees. He also objected to the SCRSIC doling out massive bonuses to the very bureaucrats who produced some of the worst results of any large pension fund in America (at the highest price, too).
“I believe if you’re going to tell a story, tell the truth and the whole truth,” Loftis told us four years ago. “Leaving out important details like our fund is underperforming its peers and paying some of the highest fees in the country is simply unacceptable.”
Sadly, no one listened … and South Carolina’s mainstream media didn’t start reporting on this disaster until it was too late.
Who is to blame for the mess? SCRSIC commissioners, specifically Williams (who was appointed by powerful State Senate president Hugh Leatherman) and Ed Giobbe (who was appointed by former S.C. governor Nikki Haley).
Their failure has stuck South Carolina taxpayers with a massive, recurring financial obligation – one created in no small part by bad investments and corrupt mismanagement.
Which leads us back to Red Bluff …
According to our sources, this property is being used as a glorified retreat for American Timberlands executives, SCRSIC committee members and other powerful Palmetto politics – all on the backs of South Carolina taxpayers.
American Timberlands original plan for this property called for it to be conserved, with investors repaid by the leveraging of tax credits associated with its conservation.
Six years later, though, that hasn’t happened …
What happened? Was there an issue related to budget cuts for the S.C. Conservation Bank? Or did the SCRSIC not want the Internal Revenue Service (IRS) doing a deep dive on its financials in connection with the deal?
Those are good questions …
Also worth considering? Two of American Timberlands top board members – Thomas J. Barrack, Jr. and Ron Beck – recently had their profiles removed from the company’s website.
Why did they leave? That’s also a good question …
According to our sources, we could learn a lot more about this situation soon as American Timberlands is reportedly involved in a legal action with the SCRSIC.
Stay tuned … we’ve requested a copy of the lawsuit in question and are following up with our network of sources regarding the pending legal action as well as the overall status of this investment.
More importantly, this news site will continue its repeated calls for reform of the state’s mismanaged pension fund so that taxpayers will never again be forced to subsidize such a massive bailout.
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Banner via American Timberlands