The South Carolina Supreme Court will hear arguments on Tuesday from the South Carolina Retirement System Investment Commission seeking a court order directing state Treasurer Curtis M. Loftis Jr. to comply with the mandatory requirements of his job under South Carolina law.
The commission is responsible for investment of the $26.6 billion South Carolina Retirement Systems, Columbia. As treasurer, Mr. Loftis is the custodian of retirement system and controls the flow of assets in and out of the fund. He is the only elected member of the investment commission.
The investment commission filed a petition April 11 in the Palmetto State's highest court, seeking to compel Mr. Loftis to fund a disputed private equity investment and “to permanently enjoin him to perform and comply with his ministerial duties as custodian of the funds of the Retirement System,” according to court documents.
During a Feb. 28 commission meeting, investment commission staff and commissioners urged Mr. Loftis to release funds for an $11.7 million first capital call for a $50 million commitment made in September to Warburg Pincus XI Partners to avoid going into “default,” as Hershel Harper Jr., chief investment officer, told the commission meeting.
Mr. Loftis said during an open session of the meeting that he would not release the funds until he received sufficient information about the Warburg Pincus contract.
The court ordered Mr. Loftis to respond to the commission's petition by 10 a.m. Monday. He did so, noting in a statement that he had authorized the Warburg Pincus funding after information he sought was provided in “sworn affidavits supplied by senior officials” of the commission.
Darry Oliver, the investment commission's chief operating officer, declined to comment, but provided the commission's reply to Mr. Loftis' court response made earlier Monday: “Although the treasurer has, at the eleventh hour, finally relented and agreed to properly fund the obligation based upon information which has been in his possession for many months, the prospect of this unlawful conduct remains without clarification and determination from this court that treasurer must fund lawful investment decisions as custodian, unless able to come forward with evidence that the approved investment is palpably illegal.”
“Best any comments wait until tomorrow in court,” said Brian DeRoy, the treasurer's spokesman, in an e-mail, declining to comment further.