Treasurer Loftis' Statement at May 23 Retirement System Investment Commission Meeting
Thursday, May 23, 2013
The following remarks appear here as they were prepared for delivery concerning the matter of the State of South Carolina v BNY Mellon.
"A settlement has been reached in the matter of the State of South Carolina v BNY Mellon. It is comprehensive, equitable and beneficial to the state. It allows the parties to settle their differences, shake hands, and work together in an enhanced partnership to better safeguard, account for, and manage the State’s custody accounts. The State Treasurer’s account custodies approximately 40.5 billion dollars of money and assets belonging to virtually every political entity of the state, as well as the assets of the State’s Retirement System.
This litigation has required the attention of two Attorney Generals, two State Treasurer’s, three Investment Commission Chairmen, two Investment Commission Chief Investment officers and scores of staff, lawyers, consultants and outside experts and I think I can speak for them all by saying …finally, it is done!
I want to publically thank many of those that were helpful in supplying information, support and expertise in this effort.
The Attorney General’s Office was efficient, well-staffed and supportive. They hired and managed the legal teams and perhaps most importantly provided needed experience in this complicated legal matter. The AG’s participation was ably and thoughtfully begun by former Attorney General Henry McMaster and then energetically continued by the present Attorney General Alan Wilson…and I thank them both. They have both showed leadership and their leadership has made a positive difference in this matter.
I would like to thank the outside legal team for their diligence, professionalism, breath of knowledge, experience and stamina. For some of the team it was as much as three and a half years of very long days, working on weekends and holidays, and traveling to both coast and many places in between. They dealt with some of the most arcane aspects of high finance and interstate law, a constantly changing economy and all the while they had to balance the uncertainties of complex litigation and the legal system. Their work was remarkable and their personal efforts heroic. I thank them for successfully bringing closure to this litigation in a manner that benefits the citizens of South Carolina.
I thank the Investment Commission that had countless hours in sifting through mounds of documents, supplying information and specific financial knowledge and legal assistance. Three different Chairmen have been supportive and have given their time freely for briefings or information request. Much of the work fell to the commission’s first employee, Attorney Nancy Shealy. I thank Attorney Dori Ditty for her positive attitude despite the day long mediations, bumpy plane rides and even bumper and hurried car rides across New York City. The Investment Commission staff was always helpful and never complained about the extra work load and long hours. The Investment Commission was not the decision maker in this litigation but their assistance has helped the state recover funds for the SC Retirement System.
I thank my predecessor Treasurer Converse Chellis for having done the time consuming due diligence and having built consensus with the various stakeholders. I thank the staff of the State Treasurer’s Office for their labor and support. Countless overtime hours were logged, without extra compensation I might add, but there was never a sour word from the group. Once again they exceeded my expectations and I will be forever grateful.
Lastly, I would like to thank the Bank of New York Mellon. The South Carolina investment Commission has a progressive, complicated portfolio that requires a great deal of attention. We simply must have the best possible custody bank, and we simply must have the best possible relationship with them.
While we certainly had our differences, and at times they were seemingly intractable, The Bank, as did the State, made painful accommodations, but the painful decisions made on both sides allowed compromise, and ultimately, settlement. The settlement will allow us to not only maintain our bank/client relationship, but to become true business partners that has each other’s long term wellbeing at heart.
Over the last two months the Bank has demonstrated the sincerity of its commitment to SC many times, in many ways. As recently as yesterday I found myself sending a Bank of New York Mellon staffer a thank you email for work done well and completed ahead of schedule.
South Carolina needed a partnership of this sort…and we have found, as a result of three and one half years of hard work, compromise, study and relationship building that partner in the Bank of New York Mellon and South Carolina benefit greatly.
In the year 2000 SC was 39th in per capita income. In the year 2010, we slipped to 46th. We are not a wealthy state and creating value for, and protecting the interest of South Carolina, must always be our foremost concern. It has been an honor to work alongside the various groups that allowed this effort to be a success and it is an honor to serve the people of SC as their Treasurer.
Mr. Chairman, I appreciate the opportunity to address the Commission. As a lawyer surely you appreciate that until all settlement transactions are completed I cannot speak to the details of the settlement. I am also sure that you appreciate that the State Treasurer’s Office has delivered to the Commission, and other stakeholders, the settlement documents on the day they were approved by the court and without anyone having to request the documents. The State Treasurer’s Office recognizes the obligation of co-fiduciaries to keep each other informed and to willingly supply information that will promote a collegial and trusting relationship.
Mr. Chairman, as always, the State’s legal team stands ready to brief fiduciaries on this subject, individually or as a group, in executive session.
Thank you again Mr. Chairman for the Commission support in this matter, and for allowing me this opportunity to address the Commission."