State Treasurer Curtis Loftis says he’s hired a lawyer as state police investigate a possible pay-for-play scheme involving the state’s retirement system and a friend of the Republican treasurer. But as Loftis and his allies claim the accusations are nothing but a politically-motivated hit job, it’s only the latest indication that Loftis is using his office to secure lucrative state contracts for his friends.
In November, a financial management firm told the state’s Retirement Investment Commission it was contacted by wealthy GOP power broker Mallory Factor about the opportunity to manage South Carolina’s pension fund. The firm said Factor mentioned his relationship with Loftis, and told them the state contract could be all theirs — for a fee, of course. While Loftis totally swears that no money changed hands, according to The State’s Adam Beam, two of the investment firms Loftis recommended were indeed represented by Factor.
As state senators on Wednesday discussed a measure which would remove the treasurer altogether from the board which manages the state pension fund, Sen. Greg Ryberg (R-Aiken) blasted Loftis for politicizing a state agency. “The issue isn’t whether the treasurer and his friends have broken the law,” said Ryberg. “The issue is that our treasurer has turned the retirement fund into a political sandbox.”
However, the record shows that Loftis has been playing in political sandboxes ever since taking office. The Associated Press’ Jim Davenport described last summer how just a week after Loftis was sworn in, the new treasurer managed to get one of his college fraternity brothers added to a massive state lawsuit against the Bank of New York Mellon. Campaign records show the attorney, Michael Montgomery, gave over $1,000 to Loftis’ 2010 campaign and served as legal counsel for the treasurer’s transition team.
At the time, Charleston law professor Gerald Finkel said Loftis’ habit of giving state business to his friends “smacks of political patronage.” Loftis stood by the practice, telling the Post & Courier “We don’t hire enemies to do stuff for us.”
That Loftis is steering business to his friends is decidedly clear. What isn’t clear, however, is what exactly Montgomery was brought on to do. Even a cursory glance at the 87-page lawsuit, which was initiated by Loftis’ predecessor and filed just nine days into the new treasurer’s term, shows that it was prepared long before Loftis’ friend was brought into the mix.
Reached for comment late Wednesday, Montgomery denied Loftis had anything to do with his addition to the case, calling the Associated Press’ account of Loftis’ involvement incorrect. Montgomery told Palmetto Public Record he has performed about 600-800 hours of general counsel work since last January.
But regardless of whether Montgomery actually contributed to the lawsuit, as one of the attorneys for the suit he stands to take home a big chunk of the state’s winnings — up to $3 million, according to the Associated Press. Talk about “friends with benefits,” right?
If Loftis continues to throw legal work to his friends, he may be at it for a while. Follow the Money reports that of the $189,741 in donations Loftis took in during his 2010 campaign, nearly a quarter of that came from lawyers and law firms.
It seems the treasurer has a lot of friends to look out for.