S.C. attorney general will not investigate alleged pay-to-play scheme
COLUMBIA — The S.C. Attorney General’s Office will not pursue charges related to an alleged “pay-to-play” state pension fund scandal involving state Treasurer Curtis Loftis.
Charleston resident Mallory Factor, who says he was treated as a witness in the probe, said political foes were trying to silence the treasurer’s questions about the pension system.
“They were after Curtis and they didn’t care who they hurt in the process,” Factor said. “This is a cesspool up there and it’s just terrible what goes on.”
The review had been sought by the S.C. Retirement System Investment Commission in November after it received documents alleging that Mallory Factor and his associates made calls last fall to two investment companies about pension fund work.
An employee from one of the companies told a state retirement fund official that month that one call had made it seem that the company would have to pay an elected official to be considered for work, the Retirement System Investment Commission’s vice chairman has said.
Factor, a political operative and financial consultant, describes himself as a supporter and “business friend” of Loftis.
The Attorney General’s Office in a brief letter released Friday concluded that no legal action was warranted after reviewing a report on the alleged scheme the office sought from the State Law Enforcement Division.
Loftis and Factor claimed vindication and lashed out at what they separately described as an attempt by Loftis’ political foes to shut down the treasurer’s questions about the pension funds’s fees, expenses and performance.
“Today’s release is a major victory for transparency and accountability, the state taxpayers, public servants and retirees,” Loftis said in a statement. “This effort by my political opponents to inject the legal process into a political battle over how public funds are invested was shameful.”
Factor said the allegations were the product of “gutter politics” and have destroyed his reputation and hurt his family. He said he was never the subject of SLED’s investigation and was treated only as a witness.
Factor said he was trying to help the pension fund and state taxpayers by pointing the Investment Commission toward two better-performing investment companies and getting out of “horrific investments” that the commission was in.
The commission oversees the state’s $25 billion retirement fund for public workers.
Factor has said he also was a “third-party marketer” of the investment firms he wanted the state to do business with. If the state hired a firm he markets, he would receive a cut — generally about 20 percent — of the fees paid by the state, he has said.
But Factor said the only Investment Commission member to respond to his inquiries was Loftis.
Loftis is the only elected official who serves on the commission, and he voted like the rest of the board to turn over the documents at the center of the alleged “pay-to-play” scheme to the Attorney General’s Office.
The documents were later leaked to media outlets.
Factor on Friday called for SLED to investigate who had leaked the documents discussed in a closed session of the commission, but a spokeswoman for the agency said its inquiry is closed.
The Post and Courier has filed a Freedom of Information Act request for SLED’s report.
As the Attorney General’s Office and SLED were examining the alleged scandal earlier this year, state Sen. Greg Ryberg , R-Aiken, led an unsuccessful effort to have Loftis voted off the commission.
Ryberg’s measure, which was defeated by senators in a 34-10 vote in February, would have forced Loftis and future state treasurers to appoint a commissioner instead of serving on the commission themselves.
Ryberg has said the requirement would remove any politics from commission affairs and ensure that all of its members would have the necessary financial expertise to handle decisions on complex pension fund investments.
Loftis was unavailable for comment Friday. Commission Chairman Allen Gillespie declined to comment Friday on the Attorney General’s Office decision.