Let the sun shine in on the S.C. Investment Commission
BY CURTIS M. LOFTIS JR.
This week, media outlets across the country are celebrating “Sunshine Week,” a time devoted to the promotion of open government. The cause is noble, and leaders across all levels of government should be committed to the goal of daily transparency and not just during an appointed week.
Creating a transparent and accountable government is far more difficult than one may assume. There are many obstacles to granting citizens a “look-see” into what really happens, not the least of which is the old fashioned sense of embarrassment. Few of us enjoy someone looking over our shoulders and even fewer like the entire state peering wide-eyed into our daily work.
But good government cannot exist in today’s modern and complicated world without such sunshine.
Advocates of open government include members of the press corps, grass-roots organizations, and yes, even a few elected officials. One example of such advocacy is state Rep. Bill Taylor of Aiken. His bill to strengthen our FOIA laws is currently on the House calendar for debate. This legislation would allow citizens access to government records at a minimized cost and in a timely manner.
Further, it provides a process to appeal denied FOIA requests at the Administrative Law Court rather than at the costly Court of Appeals. This keeps costs down, enables swift resolutions and sets consistent standards across state government. I applaud Rep. Taylor for his dedication to transparency and look forward to the passage of his bill.
Too often the custom of government is to meet problems with silence. As a man who has spent the bulk of his life running a business, it is clear to me that serious issues and problems must be faced directly.
I have personally learned about the obstacles that some groups use to keep watchful eyes at a distance.
For more than two years, the treasurer’s office has been fighting for open government and transparency at each and every opportunity, including at the South Carolina Retirement System Investment Commission.
As the statutory custodian of the state’s funds, it is my responsibility to make sure your money, including our largest asset, the $26 billion state pension fund, is safe. So I am alarmed that our pension fund pays too much in fees, has below average returns, includes a larger than average share of alternative investments and has management practices that put us at risk.
In fiscal year 2012, the Investment Commission paid $296 million in investment fees while earning only $125 million, placing itself in the bottom 40 percent in peer-performance studies. The pension fund ended the calendar year in better shape, but still trailed its peers and was again ranked in the bottom 30 percent in returns.
These types of facts are important and I assure you that gathering this important data, even for your state treasurer, is a difficult task.
My attempts to gain timely and accurate information are often stonewalled, ignored, piecemealed or buried in reams of other information.
The commission sends important legal and financial documents by secure portal, which sounds appropriate until you discover that the information, often hundreds of pages long and spread over many documents, cannot be printed, making it difficult to properly review and study the data.
These practices are unacceptable, but the commission continues them while singing the praises of transparency.
But like so many governmental institutions, especially those tasked with managing vast sums of public money, there is a disconnect between actions and words, and this disconnect must end.
The observance of Sunshine Week is a wonderful cause and roadblocks should not hinder the fight for transparency in South Carolina’s government.
My fellow investment commissioners, who are less than pleased with my willingness to report back to the people who elected me and own the money, censured me for publicly speaking out against high fees and poor performance. I wear their disapproval on this issue as a badge of honor.
I know that if it takes ruffling a few feathers to make progress in creating a more financially sound pension fund through transparency and accountability, then my efforts will have been more than worth it.
Curtis M. Loftis Jr., a Republican, is the treasurer of South Carolina.