After $3.5B error, former SC lawmaker and budget employee eyed to replace comptroller

South Carolina’s 170 lawmakers will get to elect the state’s top accountant in the coming weeks after Comptroller General Richard Eckstrom announced his resignation when he became embroiled in a decade-long $3.5 billion accounting blunder.

To choose his successor, state lawmakers say they are looking within.

State Rep. Phillip Lowe, R-Florence, said he started whipping votes over the weekend for former state Rep. Kirkman Finlay, a Richland Republican and restaurant owner who lost his state House seat in November 2022. House Speaker Murrell Smith, R-Sumter, and S.C. Republican Party Chairman Drew McKissick endorsed Finlay’s candidacy Monday.

On the other end of the State House, state Sen. Larry Grooms, R-Berkeley, said he’s looking for someone with a stronger budget background, saying he plans to nominate former Senate budget director Mike Shealy. Grooms led a panel that investigated Eckstrom’s $3.5 billion error.

Shealy declined to comment on his pending nomination. In a statement Monday, Finlay formally announced his intention to run for the $151,000-a-year-job charged with running the state’s payroll and being the top fiscal watchdog.

“As a strong conservative, business owner and former member of the South Carolina House Ways & Means Committee, I will work to ensure our state government functions in an efficient and effective manner,” he said. “I appreciate the calls from members of the General Assembly urging me to pursue this calling. My promise to you is to restore trust to this office. In fact, my first act in office will be to perform a complete audit of every aspect of the Comptroller General’s office, making the findings available to the public once the audit is complete.”

The pending match up between the two chambers will be the first time in 16 years that the Legislature, not the voters, will get to decide who fills a statewide constitutional officer position.

In 2007, state Treasurer Thomas Ravenel resigned after he was indicted on drug charges. To replace him, the General Assembly elected former state Rep. Converse Chellis, who was backed by House members. Senators supported then-state Sen. Greg Ryberg, R-Aiken, for the role.

Eckstrom will resign effective April 30 after he disclosed to lawmakers that his office miscounted the state’s cash balances for 10 years, inflating the amount of cash on hand by $3.5 billion.

Eckstrom, a Republican, was first elected comptroller in 2002 and was last reelected in 2022 after he ran unopposed.

Comptroller experience

Lawmakers first learned this year that Eckstrom inflated the state’s cash balances by $3.5 billion because his office double counted money for colleges and universities. The error has no impact on the state budget and does not mean money is missing, though it could affect the state’s credit rating which impacts how much the state pays in interest when borrowing money.

Since, lawmakers have sought to strip Eckstrom of his responsibilities, and they’ve considered a bill that would make the comptroller a governor-appointed position.

Eckstrom has an accounting background, which is not a requirement to be comptroller.

The only constitutional requirement to run for the four-year position is to be a registered South Carolina voter.

“Until you raise the pay to make it attractive to a (certified public accountant) to get into this, you’re going to continue to get political types,” said House Minority Leader Todd Rutherford, D-Richland, suggesting the comptroller should earn $225,000 to $250,000 a year.

Whoever is elected comptroller, they will sit on the State Fiscal Accountability Authority with the governor, chairs of the respective budget-writing committees and the treasurer. The panel acts as oversight on state spending and gives final approval for facility improvement projects and property leases for state agencies and colleges and universities.

Treasurer Curtis Loftis said Monday that Eckstrom’s successor should be a “proven leader” with an accounting or finance background.

“Other essential qualities include someone that is process-oriented, demonstrates a keen attention to detail and fully understands the complexities associated with the office and its duties, including the intricacies of these modern accounting systems,” Loftis said.

McMaster, who supports putting the position in the governor’s Cabinet, declined to comment Tuesday directly on Finlay and Shealy’s candidacies. The governor told The State Media Co. that if he were appointing someone to the role, he would want someone with finance or accounting experience.

“I’ll be happy with whomever is there and we will work with him and get him up to speed, and we look forward to working with him,” McMaster said. “But, again, if I had my choice, I think the best thing, not to say they’re not other good things, but the best thing would (be to) have a career professional, (have a) good reputation, is not in involved (and) has not been involved in politics to come in with fresh eyes, (and) see what needs to be done.”

McMaster said he was confident that more candidates will be considered for the job, but did not know who may step up.

“I think anyone who’s interested should be considered,” McMaster said. “I think there are a number of people in the public who would like it. They probably will not enter the race for it or campaign for it because this is typically seen as an insider’s thing when the Legislature elects someone.”

Republicans hold 88 seats in the 124-member South Carolina House chamber to 30 Republican seats in the 46-member Senate chamber, giving the House leverage in the comptroller election.

Lowe told The State Media Co. on Monday that he’s gotten more than 86 members needed to secure Finlay’s election.

Finlay is a large land owner, who has a bachelor of arts degree from the University of Virginia and runs Columbia-area establishments Doc’s BBQ, Pawley’s Front Porch in Five Points and Millstone at Adams Pond.

On the House Ways and Means budget-writing committee, Finlay was part of a panel that oversaw colleges and university spending, often grilling leaders about their deferred maintenance and other spending.

“Kirkman has a great business acumen,” Lowe said. “I’ve known him for 10 years. I know he will ask tough questions. He’s got the courage to do the right thing, and I trust his ability to do accounting work because of how good he’s done in his business life.”

“I’m sure there probably exists somebody who would not want him back,” Lowe added of Finlay. “You’re there 10 years, you make a couple of enemies in life. That’s expected. But I think either place I would like to see him serve again.”

In statement, Speaker Smith called Finlay an “ideal candidate.”

“I’m happy to hear of Mr. Finlay’s intentions and look forward to seeing his next steps,” Smith said. “Mr. Finlay has spent many years as a public servant in numerous capacities and it will be to the benefit of our state that he commits himself to public service once again. I believe Mr. Finlay will be an ideal candidate and have no doubt he is uniquely qualified to the office of comptroller general.”

Finlay served in the House for 10 years but was defeated in November 2022 by Democrat Heather Bauer — the only Democrat to flip a Republican-held seat that election cycle. The consideration of Finlay, who sat on the House Ways and Means Committee, would keep him from challenging Bauer 2024 should he decide to finish Eckstrom’s term, up in 2026.

“I think Heather Bauer beat him handily and she would have done it again,” said Rutherford, who is backing Finlay for comptroller.

Shealy, a 40-year state employee who now works at the state Department of Administration as director of statewide leadership and special projects, previously worked as budget director on the Senate Finance Committee, mainly under the chairmanship of the late Sen. Hugh Leatherman.

On the budget committee — Shealy also has worked for the state budget office and as a state revenue forecaster — Shealy remained mostly out of the public spotlight and is highly respected among senators for his budget knowledge.

Grooms said Shealy’s in-depth experience in government accounting would be helpful to the General Assembly when determining how to handle comptroller duties in the future.

“He’s the type of person I believe we need at this moment,” Grooms said. “He’s not someone who is trying to gain political power or do it for political purposes.”