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Retirement Commission Feud Infects GOP Treasurer’s Primary

By Porter Barron Jr.
Wednesday, May 28, 2014 |
Clarification: After this story went to press, RSIC spokesman Danny Varat contacted Free Times to say Chairman Reynolds Williams had in fact given sworn testimony regarding Loftis' allegations of corruption to a Senate committee, which cleared him of any wrongdoing and commended RSIC's transparency. Varat said documents were not subpeonaed because Williams had cooperated fully.

To hear Spartanburg’s Brian Adams, the Republican primary challenger for state treasurer, tell it, he’d been looking for a public office through which to serve.

But according to fellow Republican and incumbent Treasurer Curtis Loftis, Adams is the pawn of an unaccountable cabal that controls the state’s $29 billion pension investment fund and has orchestrated a “100 percent negative-attack campaign” against him.

The bitter feud between Loftis and the Retirement Systems Investment Commission, which stems from Loftis’ frustrations with poor information sharing between the commission and his office, has been well reported in recent years. Loftis also contends the commission pays too much in management fees and invests too much in risky investments. An audit of the fund released in April showed no malfeasance by the commission, which Loftis had alleged, but praised many of the process changes that were brought about during Loftis’ campaign for increased transparency.

It also concluded: “There has been a great deal of hyperbole and ad hominem attacks from both the Commission and the Treasurer’s Office. Recently, it seems these hostilities have even escalated. Personal attacks undermine the credibility and validity of points made by each party and can be too easily dismissed as either personally or politically motivated.”

“Let me be explicitly clear,” Adams told Free Times last week. “I started researching [Loftis] when he put out the graph showing the high fees and low returns. I wrote him an email thanking him for exposing that information,” he said, referring to Loftis’ public excoriation of the Retirement Systems Investment Commission for paying high fees to the fund’s money managers at a time when the alternative investments that charge those high fees were not performing well.

“I’m an IT guy,” Adams says. “I’m a numbers guy. I started digging to find out how bad it was, and when I saw that the investment commission made a 10 percent return in 2013, I don’t consider that to be low when the target is 7.5 percent.”

But, Adams says, after asking around Upstate GOP and tea party circles, he was under the impression Loftis already had drawn a challenger — a financial professional from outside Charlotte — until March 30, the candidate filing deadline, when he got a tip that Loftis was about to go unopposed.

“That was 10 o’clock. At 2 o’clock in the afternoon I was in the car on my way to Columbia to file. I was told in generic terms that there were people who were going to support [the candidate from Charlotte who pulled out] who would then put their support behind me.”

Pointing to the details of Adams’ attacks on him, Loftis says he has trouble believing that version of events.

“Mr. Adams’ website is completely the same genre of information that [RSIC Chairman] Reynolds [Williams] has been peddling to other places. … No one has access to this information except insiders at the commission,” Loftis says, adding, “I’m not surprised. When you’re a reformer in politics, you’ve got to take a lot of arrows, and Reynolds Williams is flinging every arrow he can.”

Adams says Williams “has reached out and offered support,” but only because he and others at the commission have legitimate grievances with Loftis. “Some of the frustrations that were expressed to me very early on were that [Loftis is] very combative. He basically accused Reynolds Williams of being a criminal with no evidence whatsoever,” Adams says.

“Quite honestly, financial markets are looking at South Carolina and laughing,” Adams says. “No one wants to get involved with us because no one wants to get attacked by the treasurer.”

But Loftis hasn’t abandoned his accusation that Williams has profited from the RSIC, while conceding it’s not provable. He even requested that the attorney general investigate Williams for an alleged pay-to-play scheme involving a timber company, a request the attorney general handed over to both the State Law Enforcement Division and the State Ethics Commission. SLED filed no charges, and the Ethics Commission dismissed the claim, though it urged Williams to be more careful in the future.

According to Loftis, Williams “has been telling everybody he was exonerated, but the order from the Ethics Commission said that he created the appearance of impropriety and to never do it again. That’s serious business. Did he do anything else? We’ll never know because no one has placed him under oath. No one has subpoenaed documents.”

Williams had no comment. He has repeatedly denied Loftis’ allegations.

Meanwhile, Loftis says he’s been overwhelmed by the accusations against himself.

“The problem with the Adams campaign is that uttering facts that aren’t facts seems to be the fabric of the campaign,” Loftis says. “An honorable person can’t defend against it. There are hundreds if not many hundreds of charges he’s made.”

True. Adams’ list of criticisms is too long to fit here. An ad posted to YouTube goes so far as to — gasp — compare Loftis to President Barack Obama.

“That’s the strategy — primarily to break through the veneer that he’s been so successful at creating, quite honestly, at taxpayer expense, proclaiming himself to be a tea party conservative and doing things that appear contrary to many of the beliefs that tea party people and conservatives consider their principles,” Adams says.

For Loftis, with the popular incumbent’s advantage, the strategy is to plow ahead. “We’re looking forward to June 11 [the day after the primary; online copy corrected] so we can get put this nonsense behind us and get back to protecting the people’s money,” he says.

“My poll numbers are very good. They know they can’t beat me. What they want to do is damage the brand.”

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