South Carolina Treasurer Curtis Loftis pictured Tuesday, March 31, 2026, during a meeting of the five-member State Fiscal Accountability Authority. (Photo by Jessica Holdman/SC Daily Gazette)
COLUMBIA — Loan negotiations by the state treasurer’s office contributed to unplanned overages and sky-high financial penalties against the Election Commission for new voting machines, according to a report Thursday by South Carolina’s inspector general.
In a statement, Treasurer Curtis Loftis denied that his office was at fault.
He laid the blame squarely on the state’s former elections chief, who was fired last September and arrested a month later on charges of embezzlement and misconduct unrelated to the voting machine contract.
Fired SC elections chief charged with embezzlement, misconduct
The nearly year-long investigation found mismanagement in the office of the state’s top banker. Whether it represented misconduct is outside the inspector general’s purview, the report noted.
The investigation, requested by a Senate chairman, followed his committee’s inquiry into a $1.8 billion accounting error in the state’s books.
In the process, Inspector General Brian Lamkin came across a different issue.
According to his report, Loftis’ office “failed to recognize” before signing a $30.8 million loan for 3,200 ballot scanners that the state Election Commission did not have enough money to make payments.
“This exposed taxpayers to millions in avoidable liquidated damages and violated the (Treasurer’s Office) core obligation to faithfully discharge official duties and protect the state’s fiscal interests,” Lamkin wrote.
While the Legislature provided money for the machines, the agency wasn’t set to receive it until February 2026 – four months after the first loan payment was due.
That misstep was made worse by a clause within the agreement, negotiated by the Treasurer’s Office. The terms included a 213.84% compounding late fee owed by the state for any payment more than 30 days delinquent.
That meant the Election Commission’s initial $11 million payment would shoot up to $16 million by the time it received the funding approved in the state budget. And because that late payment wasn’t factored into the budget, the fees kept piling up.
“This created an endless debt cycle,” Lamkin wrote in his report.
The deal the treasurer negotiated “adversely affected public interest,” Lamkin added, and his office “missed opportunities” to catch the error.
Loftis said it was the Election Commission that requested the financing and the Treasurer’s Office did not check behind the agency to ensure it had the funds.
Ultimately, the treasurer and elections offices reached an agreement with the lender, TD Bank, to modify the loan and avoid the full late penalty. But the Election Commission still had to pay nearly $140,000 in interest, the report said.
As for the rest of the report, the inspector general also pointed out reporting errors that came up as part of the earlier Senate investigation.
The panel led by Sen. Larry Grooms started out looking into $3.5 billion worth of accounting errors by South Carolina’s former comptroller general, a job that’s essentially the state’s top accountant.
Then the senators turned their attention to Loftis and the role he played in allowing $1.8 billion in ledger entries — separate-yet-related to errors made by the comptroller general — to linger on the state’s ledger for nearly a decade.
Forensic accountants hired by the state ultimately determined that all but $200 million was only on paper, not actual cash. And what was real had already been spent.
Still, Grooms said the lack of notice from Loftis was enough to erode confidence in the treasurer and the Bonneau Beach Republican led unsuccessful efforts to impeach him.
Grooms, in a speech on the Senate floor Thursday, said the inspector general’s report only reinforced that.
SC treasurer won’t take out long-term loans in continued fallout from $1.8B accounting error
“If the treasurer were about the business of following state statutes and doing his job, we would have confidence,” he said. “But we don’t.”
Meanwhile, federal securities investigators continue to look into the state’s financial records.
Loftis acknowledged the report “identifies areas where processes can be improved.
“And we take those recommendations seriously, as we always do,” he said.
Loftis, who is seeking a fifth term in November, went on to call the language used by the inspector general in his report, as it relates to the Election Commission, “regrettable.”
But, he claimed, the remainder of the report “confirms an important truth: there was no finding of fraud, theft, personal enrichment, criminal misconduct or malfeasance by me or my office.”
“My focus remains exactly where it has always been … protecting the taxpayers of South Carolina, safeguarding the state’s financial resources, and continuing to serve with integrity,” Loftis wrote.
First elected in 2010, Loftis has no GOP opponent. Two Democrats are vying for the nomination to challenge him in November.
Courtesy of South Carolina Daily Gazette
