DOT cash flow problem sparks fight between governor and treasurer
COLUMBIA — The gloves came off Tuesday in a simmering feud between Gov. Nikki Haley and Treasurer Curtis Loftis as the two exchanged accusations about how the state should settle cash flow problems at the Department of Transportation.
Haley cut off the discussion before resolution was reached at the Budget and Control Board over whether the agency should access a line of credit to make sure contractors are paid within 30 days, the typical window that has been pushed to 45 days. The spat was over whether the board could vote on the matter without having first added it to the agenda at the start of the meeting.
Both Haley and Loftis are Republicans. The board has five members. The governor is chairwoman.
Loftis said the board has the ability to add the item, even though it hasn’t customarily done that. He said the contractors work out in the intense heat and called the situation inexcusable. Extending a line of credit is not a significant event, he said, and one that happens regularly in business.
Loftis accused Haley’s office of ignoring him. He said he wrote the governor’s office in March.
“I think the contractors of this state who work out in 100 degree heat ought to have the ability to get paid,” Loftis said.
“Treasurer, it is not about the contractors getting paid,” Haley interjected.
Loftis replied, “It sure is about the contractors getting paid. We can amend this. We can decide what we want to do.”
Haley said Loftis' efforts are against board protocol.
“I think we need to let the secretary handle his agency the way he needs to,” the governor said. “This is to be resolved. He is very aware of how he is supposed to handle this issue. ... We are not going to be adding agenda items just because.”
Loftis said Haley’s office did not have the courtesy of giving him a response. Haley disputed that claim.
“We’re not going to do this,” Haley said, moving on to the next item.
Earlier in the exchange, Haley said she directed Transportation Secretary Robert J. St. Onge to resolve the matter quickly and make sure it doesn’t happen again. She said policies are in place now to make sure the situation is not repeated. The governor encouraged the treasurer to talk to DOT further outside of the meeting.
Loftis said after the meeting that Haley stopped the DOT from pursuing a line of credit. Haley disputed that claim.
Loftis said his attempts to add items to the agenda before the meeting are often not successful. Loftis said the members typically poll one another as to what to include on the agenda.
The Post and Courier reported in today’s paper that the DOT is 2 1/2 months behind in paying the state Infrastructure Bank for loans on major construction problems. Peak summer construction, among other components, has delayed contractors payments. St. Onge said the DOT is working with the contractors individually to ensure they are paid when they need to be. Still, some contractors tell the newspaper that their businesses are at a breaking point over the delayed payments.
The DOT expects to have its cash flow issues straightened out by the end of the year.
Senate Finance Chairman Hugh Leatherman, R-Florence, said the situation is unacceptable.
“I am not willing to sit here and hear that some of these contracts are not being paid,” Leatherman said.
It is unclear whether the agency will pursue a line of credit after today’s exchange.
Haley said after the meeting that her relationship with the treasurer was fine.
"You know, he had a heated exchange," she said. "I was fine. What I was trying to do was get order back to a meeting and act like a professional. I think what we have to understand is there are rules and policies in a meeting for a reason and you can’t just blurt out like you’re in grade school. I think we need to have respect in that board."
Haley said any member is welcome to add items to the agenda -- the day before a meeting.
Loftis said after the meeting that Haley's approach to the cash flow problem at her Cabinet agency is foolish and ill conceived.
"We are sitting on a ton of cash and we can't make any money on it," he said. "We should use this money to pay the contractors of South Carolina.
Our good name is at stake."
Loftis and Haley clashed earlier this year.
In February, the governor’s chief of staff Tim Pearson said Loftis wasn’t a relevant player in budget discussions with legislators, according to a letter obtained by The Associated Press. Pearson’s comments were in response to Loftis’ concerns about being excluded from a meeting with House and Senate budget writers.
“... I’d like to preemptively let you know that this is one of many meetings the governor will have that involve the budget and other issues before the Legislature, and, being that he is not a relevant player in those issues, Treasurer Loftis will not be invited to attend those meetings,” Pearson wrote to Loftis’ chief of staff.