Welcome to Monday.
This is a special edition of The State House Gavel, a daily reporter notebook by reporters Gavin Jackson, Russ McKinney and Maayan Schechter that previews and captures what goes on at the South Carolina Statehouse this year while lawmakers are in session.
The South Carolina Senate will meet on Monday for a first-in-the-modern-era hearing to decide whether Republican Treasurer Curtis Loftis, first elected in 2010, should be removed from public office.
It is not an impeachment proceeding, but another process authorized by the state Constitution that provides for removal from office any executive officer for "willful neglect of duty."
The question for the 46 senators — 34 Republicans and 12 Democrats — is whether Loftis willfully neglected his statutory duties over a $1.8 billion government accounting error that has resulted in multiple investigations, resignations, and a costly outside audit.
It hasn't been since the late 1800s that South Carolina lawmakers held a similar hearing. It's unprecedented that a constitutional officer be removed by lawmakers in the modern era.
How to watch:
- The Statehouse is open Monday to the public, but expect a heavy law enforcement presence and limited gallery seating.
- The hearing will be livestreamed via the Statehouse website here, and streamed on SCETV's website, Facebook page and YouTube channel. The hearing will also broadcast live on ETV World.
Here's what you need to know about Monday's historic hearing.
Why is Treasurer Curtis Loftis in the hot seat?
To understand the $1.8 billion error, you have to go back to 2023.
In March 2023, statewide elected then-Comptroller General Richard Eckstrom told senators that he had unintentionally exaggerated the state's cash position by $3.5 billion by overstating the amount of money the state sent to universities and colleges for a decade, the Associated Press reported.
The blunder was discovered by a junior staffer, Katherine Kip, who testified that in 2022 she discovered that the state's annual financial report overstated the state general fund account balance by nearly 50% — an error that grew in the early 2000s when the state of South Carolina moved to a new accounting system called SCEIS.
Senators on the Senate Finance Committee — which helps write the budget every year — were incensed, as they learned of poor communication between the comptroller and the state treasurer's offices contributed to lawmakers' own lack of knowledge of the error.
The error did not impact the state budget, but, over the decade, the state's financial books were reported inaccurately to bond rating agencies and investors.
The U.S. Securities and Exchange Commission launched an investigation.
Eckstrom resigned in March 2023, as lawmakers threatened to boot him out.
In his place, Gov. Henry McMaster named Brian Gaines, a well-known and well-liked behind-the-scenes state budget official.
That fall, as senators were trying to untangle the $3.5 billion error, Gaines sent a letter to Loftis asking his office to sort out an unclaimed $1.8 billion fund, according to an April 16, 2024, Senate interim report.
It was a fund that none of the state officials with purview over the state's finances were able to identify which state agency that money belonged to.
And, at the time, lawmakers were unaware whether the money was in fact, real cash. (Most of it wasn't. We get to that later).
Fast forward to early April 2024.
In public testimony, Loftis said the money in the account had been invested and earned millions of dollars in interest — what senators assumed meant that the money in the account was very real.
Senators questioned Loftis as to why the Legislature was not told about this account. They reasoned, if the money was real, the resolution needed to be handled by the respective budget-writing committees.
Loftis testified that that was the job of the comptroller's office, as the state's accountant, and not his, which acts as the state's banker. Senators learned through their investigation that the two offices not only did not see eye-to-eye but their communication problems were growing.
The $1.8 billion error was not the only problem the special Senate Finance panel, set up to investigate the issue and led by Berkeley Republican Sen. Larry Grooms, had with the treasurer.
In a multi-hour hearing, Loftis took on senators' questions, at times gave heated answers and said he wasn't aware of all the information of the account that he said should have been provided to him by the comptroller.
Under repeated questions by senators about the fund, Loftis told the panel he would publish a report listing sensitive financial information about the state of South Carolina's treasury books so the public could see the information themselves.
Days later, Grooms on the Senate floor said that Loftis by letter to state officials said he planned to release hundreds of pages of financial information that included bank account numbers.
That plan set off alarms with state government leaders.
The comment by the treasurer resulted in a rush of emails, calls and confrontation by State Law Enforcement Division Chief Mark Keel, who told Loftis that releasing that information was illegal.
The governor and Attorney General Alan Wilson also were involved in efforts to discourage Loftis from acting.
On Jan. 15, 2025, outside audit firm AlixPartners — paid $3 million by the Legislature to investigate the error, released a report that found that most of the $1.8 billion (approximately $1.6 billion) was never real cash.
The audit found that the $3.5 billion error was the "net result of three primary categories of errors:"
- The double-counting of state money, which improperly overstated cash by $5.9 billion
- The cash balance in the treasurer's fund, which improperly understated cash by the $1.8 billion
- A $517 million state Department of Transportation-related adjustment which also had understated cash
That error led to the resignation of then-state Auditor George Kennedy, who is not elected but he and his office report to the State Fiscal Accountability Authority, made up of the chambers two budget chairs, the governor, the comptroller and the treasurer.
In testimony, AlixPartners told lawmakers that all three offices — treasurer, comptroller and auditor — bear responsibility for the $1.8 billion error, given the three offices' involvement in the fund and all three knew about the fund's existence for years.
"The $1.8 billion represents the net cash balance of thousands of journal entries, the ultimate intent of which were to allow the state treasurer's office ("STO") to balance the bank general ledger accounts in the SCEIS system to the cash balances maintained in individual banks," the audit said.
The offices of comptroller and treasurer were "both aware" of the decision to exclude the fund holding the $1.8 billion from the 2016 annual finance report and years after, the AlixPartners report said.
Grooms's special committee to investigate the issue wrapped up its investigation in late March 2025, finding Loftis at fault by saying he "breached his fiduciary duty."
Offering examples, the report said Loftis:
- "Made financial decisions that were not in the best interest of the state, independent of any oversight body’s authority to encourage or discourage this decision and announced his actions in an inflammatory manner that put the state’s financial security at risk."
- Is "currently in violation of federal law requiring repayment of federal funds and interest earned thereon," dealing with a March 18, 2025, U.S. Treasury notice of noncompliance over Housing Assistance money that was "incorrectly directed" to the state general fund by the treasurer.
- Has "unnecessarily caused the expenditure of state resources in response to the Subcommittee investigation and the release of the AlixPartners report, acting without care or prudence."
- "Threatened to release sensitive state financial information and then took active steps to do so."
The report recommended to the full Senate that the elected treasurer be removed from office for "willful neglect of duty and other reasonable clauses."
Loftis has repeatedly denied wrongdoing to lawmakers.
"The state should accept the AlixPartners recommendations and move forward. Our taxpayers deserve better than the subcommittee’s continued grandstanding which places the state’s strong credit ratings and ability to access affordable financing at risk,” Loftis said in a Feb. 27 statement.
He's called the Senate investigation a "witch hunt" and "power grab."
He now said he'll run for reelection in 2026.
How will the Senate hearing work?
In the 30,000-foot-view of all this, the state Constitution says that the governor "shall" remove a statewide officer after a two-thirds vote of each legislative chamber.
Loftis, in this case, is allowed the opportunity to pose a defense. So can his attorney.
Then, the chambers vote.
In the Senate's case, with 46 members, a two-thirds vote would be 31 members.
Senators will gavel in at noon Monday.
The Senate's case will be presented by Sen. Grooms, who led the chamber's investigation, and Sen. Stephen Goldfinch, R-Georgetown.
They have up to 1.5 hours to present their case. Loftis and/or his attorney, Deborah Barbier, will present their defense for up to three hours.
Grooms and Goldfinch will have up to 30 minutes to respond.
Each senator will have up to 10 minutes to question both sides.
Both sides cannot call witnesses.
Before the weekend, the state Supreme Court declined to intervene and stop the hearing, saying in its unanimous decision that the case was "not yet ripe for the Court's consideration."
The S.C. Constitution says:
For any willful neglect of duty, or other reasonable cause, which shall not be sufficient ground of impeachment, the Governor shall remove any executive or judicial officer on the address of two thirds of each house of the General Assembly: Provided, that the cause or causes for which said removal may be required shall be stated at length in such address, and entered on the Journals of each house: And, provided, further, that the officer intended to be removed shall be notified of such cause or causes, and shall be admitted to a hearing in his own defense, or by his counsel, or by both, before any vote for such
address; and in all cases the vote shall be taken by yeas and nays, and be entered on the Journal of each house respectively.
What will the House do?
Because the hearing is unlike a traditional impeachment trial that would start in the House, the lower chamber can decide whether to hold a similar hearing over Loftis.
The House has held a few public hearings into the $1.8 billion error.
But they've largely let the Senate steer the investigation.
That raises the obvious question: Would the House, up for reelection next year, wade into the matter of a statewide elected official's future?
At the Greenville County GOP convention last week, Loftis said no.
You can listen to him below:
SC Public Radio has reached out to the House Speaker's Office for a response.
What does the governor say?
The governor, who has known Loftis for years given the two's activity in GOP politics, has largely dealt with the matter behind the scenes.
Not too long after the public disclosure of the $1.8 billion error, McMaster launched a "working group" with the various responsible offices.
And, in public remarks to reporters, he's cautioned officials about making premature statements about the investigation and the error itself. When Loftis threatened to post sensitive financial information online, McMaster told reporters that he told Loftis it would be "dangerous" to do that, and asked him not to.
But, while acknowledging the error, McMaster has refused to publicly pinpoint Loftis as at fault, instead saying that all parties need to get along and better work with each other.
SC Public Radio spoke to McMaster ahead of Monday's hearing last week.
You can listen below:
In other public comments, McMaster has said he does not believe Loftis should be removed.
Daily planner (4/21)
SC Senate
- 10 a.m. — Gressette 308 — Labor, Commerce and Industry Committee
Agenda Available
Live Broadcast
Live Broadcast - Audio Only - Noon — Senate in session
Live Broadcast
Live Broadcast - Audio Only
MAAYAN SCHECHTERThe S.C. Senate in chambers in Columbia, S.C.
Clips from around the state
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- USC student sues over terminated student visa status (SC Daily Gazette)
- Democratic Rep. Jim Clyburn meets SC voters face-to-face as Republicans keep their distance (Post and Courier)
