COLUMBIA, S.C. (Legal Newsline) -- South Carolina Attorney General Alan Wilson and another state official are reportedly feuding over Wilson's wanting to hire two law firms to oversee transactions in the state's retirement system.

Wilson made the proposal last month, concerned about fraud in the system, which has about $26 billion in assets.

He wants to hire attorneys from New York firm Labaton Sucharow -- whose partners contributed thousands to Wilson in 2010 -- and Charleston firm Motley Rice to handle the job.

According to The State, the lawyers would be paid legal fees only if hired by the state to recovery money.

But State Treasurer Curtis Loftis contends that no outside lawyers are needed.

"As treasurer, I am the custodian of the state's funds," Loftis told The State. "It is important that these large-dollar contracts be without political involvement or interference. Campaign contributions have no place in the decision process of protecting our $26 billion trust fund."

Both firms have been accused of so-called "pay-to-play" arrangements in other states.

Loftis says the state already monitors for fraud, waste and abuse through "a variety of methods."

But the attorney general told The State he is merely trying to be "proactive" and that Labaton Sucharow's contributions had nothing to do with his proposal.

In January, South Carolina filed a lawsuit against the Bank of New York Mellon Corp. and the Bank of New York Mellon for allegedly making bad investments with the state's money.

According to the newspaper, the state Retirement System Investment Commission will have the final say on whether the two law firms are hired. Wilson planned to propose the idea at a commission meeting Thursday.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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