Gov. Mark Sanford immediately suspended him and pledged to name an interim treasurer as soon as possible.
"Given the grave nature of these charges and what is alleged in this indictment, we're left with no choice but to suspend Treasurer Ravenel immediately," Mr. Sanford said in a prepared statement. "These are obviously very serious allegations that we're constitutionally bound to act upon, and they'll ultimately be decided by the courts."
The treasurer oversees the state's banking and investments. As one of the five members of the Budget and Control board, Mr. Ravenel also plays a key role in approving state contracts and other financial decisions.
U.S. Attorney Reggie Lloyd said Mr. Ravenel bought less than 500 grams of cocaine from Michael L. Miller of Mount Pleasant, who also was indicted. But Mr. Ravenel did not sell any drugs, Mr. Lloyd said.
Mr. Ravenel and Mr. Miller face up to 20 years in prison and a $1 million fine.
Mr. Ravenel was indicted as part of an ongoing investigation into cocaine-related activity in Charleston that began more than a year ago, authorities said. By April, there was enough information to begin building a case against Mr. Ravenel, State Law Enforcement Division Chief Robert Stewart said. At that time, the investigation was turned over to the Federal Bureau of Investigation to avoid any appearance of conflict, because the Budget and Control Board makes decisions that affect SLED, Chief Stewart said.
Mr. Ravenel has been seen as a rising star in the South Carolina Republican Party since he defeated longtime Democratic treasurer Grady Patterson in November.
Mr. Ravenel also ran unsuccessfully for the Republican nomination for U.S. Senate in 2004.
News of the indictment spread quickly through the Statehouse on Tuesday afternoon, with House and Senate members huddling in groups to discuss the latest details.
"I'm hoping for the best," Mr. Ravenel's friend Lt. Gov. Andre Bauer said. "I've never seen anything like that type of activity from him, so I find it very surprising." Mr. Ravenel had been serving as the state campaign chairman for former New York Mayor Rudy Giuliani's presidential campaign. But on Tuesday the campaign said Mr. Ravenel had "stepped down" from his duties.
A millionaire former real estate developer, Mr. Ravenel is the son of Arthur Ravenel Jr., who served in the Statehouse and Congress. Thomas Ravenel will have to come to court for a July 9 arraignment hearing, at which time bond will be set and he will be able to enter a plea.
Mr. Miller is in state custody on a charge of trafficking cocaine, but may be transferred into federal custody, Mr. Lloyd said.
Reach Kirsten Singleton at (803) 414-6611.