Pro-Haley group spends $400,000 on ads for allies running for Senate

By ANDREW SHAINashain@thestate.com

A pro-Nikki Haley political organization that can accept unlimited contributions spent $400,000 on ads backing a pair of state Senate candidates endorsed by the Republican S.C. governor.

That was nearly twice as much as the candidates raised for their own campaigns, according to state filings.

But the next candidate who could get help from the organizationâ™s deep-pocketed contributors â“ willing and able to shell out $250,000 at a time â“ is the first-term governor when Haley runs for re-election in 2014.

The Movement Fund â“ a tax-exempt, federally recognized 527 organization that has raised $791,000 in less than two years â“ could run ads for Haley, a state candidate, and work with members of her campaign, political experts said. That is because rules prohibiting formal coordination between a 527 group and a candidate only apply to federal races. S.C. rules regarding political organizations were tossed out by a federal court ruling in 2010.

âœWeâ™re really are in the Wild West here,â said John Crangle, S.C. director for political watchdog Common Cause.

But there is a catch in Haleyâ™s expected bid for a second four-year term: A senior advisor to the Haley campaign, Tim Pearson, also is an advisor to the Movement Fund. That limits the kinds of ads the organization could run, said Butch Bowers, an attorney representing the Movement Fund.

With Pearson on board, the fund cannot pay for ads directly advocating for Haleyâ™s candidacy or against her opponent, Bowers said. Instead, the fund would have to run issues ads â“ such as for school choice or health-care reform â“ though they could mention the names of candidates, Bowers said.

But the fund could run ads for Haleyâ™s campaign 120 days after Pearson leaves the political group, Bowers said. Pearson ran Haleyâ™s 2010 campaign before becoming her chief of staff. He left the governorâ™s office in October to open a consulting firm to oversee her political operation.

Haley has a sizable war chest developing.

After spending money on state Senate races, The Movement Fund had about $220,000 on hand through Oct. 17, according to Internal Revenue Service filings.

The governorâ™s 2014 campaign also had a little more than $1 million on hand as of Sept. 30, after raising $226,000 during the quarter â“ the fifth-straight that Haley has raised at least $200,000, according to S.C. Ethics Commission filings.

The Movement Fund, which has collected four contributions of $100,000 or more, could impact the governorâ™s race like it did state Senate battles last month.

The fund chipped in $139,000 to support Katrina Shealy, a Republican and Haley ally who ran as a petition candidate, in her successful effort to defeat state Sen. Jake Knotts, R-Lexington, Pearson said.

Combined with the $82,000 that Shealy raised, the backing of the pro-Haley group gave Shealy enough money, $221,000, to be on par with Knotts, who had raised $267,000 collected through Oct. 17, according to S.C. Ethics Commission filings.

The Movement Fund also spent $261,000 to support Aiken businesswoman Deedee Vaughtersâ™ unsuccessful bid to unseat state Sen. Nikki Setzler, D-Lexington, Pearson said. Ads battering Setzler were a constant on Columbia-area television in the final weeks before the election.

The organizationâ™s backing bolstered Vaughtersâ™ campaign, which collected $130,000 in contributions through Oct. 17 â“ about half in loans that Vaughters provided to her campaign, according to ethics commission filings.

Setzler raised $235,000.

This story was originally published December 4, 2012 at 6:36 AM.