COLUMBIA, S.C. — A group of South Carolina senators didn't get much clarity Tuesday as they sought answers about how $1.8 billion ended up passing through a state bank account over the past decade without anyone knowing where it came from or was supposed to go.
The two typically elected officials responsible for the state's accounting and bank accounts — the comptroller general and treasurer — appeared before a Senate subcommittee.
The agenda said they were giving their budget requests. But almost the whole four-hour meeting was consumed by the missing $1.8 billion and other accounting errors that happened as the state shifted accounting systems in the mid-2010s.
Accountants are still trying to untangle the mess, but it appears that every time the state’s books were out of whack, money was shifted from somewhere into an account that helped balance it out, state Senate leaders have said. In a different problem, the state was double-counting higher education money to the tune of almost $4 billion.
Comptroller General Brian Gaines, who took over for the elected Republican director after he resigned when the accounting errors started to emerge last year, spoke for about 10 minutes. He promised to continue to help senators in any way to unravel the mess and said the account in question where the $1.8 billion went was created by the treasurer's office.
Gaines was followed by Republican Treasurer Curtis Loftis, who told the senators repeatedly for hours that it isn't his responsibility to balance the books and that he can't get any information out of the comptroller general's office.
Loftis asked for more time to find answers and then yelled at senators for suggesting he wasn't telling the truth. He argued against the chair's claim that there were identical reports with the same numbers and begged the Democrats on the subcommittee to come to his rescue.
“Senators, I’m at a bit of a disadvantage. Six people can ask me any question about the last 14 years," Loftis said.
Loftis said that his job is to be the state's banker and investment chief and that the comptroller general reconciles the books. Loftis said the comptroller general also refused to share key information, an allegation the other agency denies.
“If we weren't arguing, we could solve this problem. I’ve been given the responsibility without the authority,” Loftis said.
There were some hints of new information at the meeting.
Senators perked up when Loftis briefly suggested there might be a criminal investigation into the money, which Loftis quickly shot down, saying they misunderstood him.
The $1.8 billion may not be sitting around waiting to be spent on things like teacher salaries or prison improvements, and could actually end up taking cash from those things.
Republican Sen. Stephen Goldfinch said there are indications the money may belong to other entities, such as the state Department of Transportation, the federal government or an environmental trust fund. If the money is accounted for, the state may have to pay back the interest it earned investing the $1.8 billion.
And Loftis said the money doesn't remain in one account since the investments are pulled from multiple other places.
The meeting was suspended without any resolution. Several senators last week introduced a proposed constitutional amendment that would make the comptroller general an appointed instead of an elected position. They suggested a similar proposal for the treasurer to go before voters in November could come soon.
Stating at Loftis, his glasses perched at the end of his nose, Republican subcommittee chair Sen. Larry Grooms said that he thinks Loftis' staff knew about the problems for seven years and that “if your staff knew, then you knew.”
“The treasurer's office was responsible for maintaining the integrity of the banking and investments records, and it has failed,” Grooms said.
“No sir,” Loftis snapped back.
Grooms went on to say explanations by Loftis' staff were not instructive, not totally accurate and seemed to be intended to blame anyone else.
“You have not accepted responsibility in the seven years they have occurred and the records of the treasury are a mess,” Grooms said.
“Senator, that is highly irresponsible. It is not accurate," Loftis responded.
After an hour-and-a-half-long break, the subcommittee returned to grill Loftis again, with the line of questioning starting with Senator Tom Young Jr.
"The Senate Finance Committee is going to be dealing with the budget next week. The full Senate will be dealing with the budget in three weeks," Young explained to emphasize the urgency of the situation.
The roughly four hours back in session welcomed spirited back-and-forth arguments from the senators and Loftis.
"I want to be part of the solution. I'm too damn old to be arguing about nothing," the State Treasurer said.
Loftis asked the subcommittee for the state to consider hiring forensic auditors to look into the account.
Despite the additional hours of discussion, no recommendations were made, and not many more questions from the subcommittee were answered.
Before the group adjourned, there was mention of additional meetings to continue discussions about the mystery $1.8 billion, but no dates for the next meetings were given.