Beaufort News

House panel clears Haley of ethics violations

COLUMBIA -- A House panel cleared Gov. Nikki Haley Wednesday of claims she illegally lobbied and broke other ethics laws while a state representative.

The six-member House Ethics Committee had been meeting behind closed doors for more than a month, looking into a complaint alleging Haley lobbied for the Lexington Medical Center, which was seeking state approval to build a heart center. The complaint also alleged Haley broke other ethics laws while consulting for Wilbur Smith Associates, a Midlands engineering firm that has received state contracts.

The committee agreed there was probable cause that a violation occurred, opening its hearing to the public under a new House rule adopted Tuesday. It then dismissed the allegations minutes later in a 5-1 vote, saying no additional investigation was warranted.

"We found no evidence that she lobbied or broke any laws," said state Rep. Roland Smith, R-Aiken, chairman of the committee.

Committee members said their inquiry determined state law is vague on what constitutes illegal lobbying vs. legal consulting, leaving room for interpretation on what is appropriate activity by lawmakers. They instructed staffers to begin working on bill to clarify.

Under current law, Haley's activities were the norm for legislators, Haley's attorney, Swati Patel, said in a response to the ethics complaint. "Indeed, Gov. Haley's business activities and conduct are commonplace in the Legislature and were always consistent with the law."

Patel warned taking action against Haley would open up other lawmakers and businesses to similar claims of unethical behavior. "To find otherwise would not only impugn the integrity of other members of the General Assembly, but also that of many of South Carolina's best corporate partners: BlueCross BlueShield of South Carolina, Michelin, AT&T, Time Warner Cable, and several others," she wrote.

John Rainey, a GOP fundraiser and activist who filed the complaint against Haley, said the committee's decision "demonstrates that our public institutions are truly broken."

"After meeting in secret, the committee only held a 'public' session long enough to dismiss this complaint on a party-line vote," Rainey said in a statement. "It defies all reason or sense of justice that just moments before the committee dismissed the case it voted unanimously that probable cause existed to investigate. In light of such tortured logic, this can only be explained as a political decision to paper over the culture of corruption infecting our public institutions."

Avoiding a 'witch hunt'

Committee members reviewed allegations made by Rainey, and responses from Haley and her attorneys. Committee members said Haley's answers to Rainey's allegations were satisfactory, leaving no outstanding questions.

Had the committee wanted, hearings could have been held with witnesses, testifying under oath, and the collection of additional documents to help determine if there was wrongdoing.

But the committee's five Republicans said that was not necessary. "I don't think Gov. Haley violated any law," said state Rep. Mike Pitts, R-Laurens, adding any additional inquiry would be the equivalent of a "political witch hunt."

State Rep. Laurie Funderburk, D-Kershaw, the panel's lone Democrat, said a hearing was needed to dig further. But she was overruled.

Funderburk, who worked for fellow Kershaw Democrat Vincent Sheheen during his 2010 governor's race against Haley, cast the sole vote against dismissing the complaint. "I was not comfortable dismissing without more facts," Funderburk said. "A hearing would have determined whether there was any wrongdoing."

Other Democrats called the inquiry a "slap in the face to voters."

"This is Republican good ol' boys protecting their good ol' gal," said Phil Bailey, director of the Senate Democratic Caucus. "Same ol' stuff we've been seeing for years."

Haley's office applauded the committee's vote, commending it for "doing its job seriously and professionally."

"Once again, we've seen another in a long line of made-up nonsense claims against Governor Haley found to be meritless," said Haley spokesman Rob Godfrey. "While mudslingers, trash-talkers and political opponents will undoubtedly continue to do what they do, Governor Haley will continue to do what she does best, which is stay focused on improving South Carolina's economy and reforming our government."

Lexington Medical Center

Rainey had accused Haley of illegally lobbying on behalf of Lexington Medical Center as it worked to gain state approval for an open-heart surgery center. He also alleged she exploited her House seat by soliciting donations from lobbyists and companies for the hospital's foundation.

Haley worked as a fundraiser for that foundation from 2008 to 2010, earning $110,000 a year.

Committee members said that because Haley never worked for the hospital directly, she cannot be accused of lobbying for its heart center.

(Disagreement remains on whether Haley's work benefitted only the nonprofit foundation or the hospital, too. Haley was paid by the hospital, not the foundation, according to her disclosure forms.)

Rainey's complaint pointed to an August 2008 email as possible evidence of Haley lobbying.

In the email, to Lexington Medical chief executive Mike Biediger, Haley wrote: "We have some work to do not only to switch votes (on the heart center) but to hold the ones we have. We are as close as we are going to get and can't afford to leave one stone unturned. ... Fingers crossed!"

Ethics Committee members decided Haley's activities were not lobbying. Instead, they said she was advocating for a hospital in her district - a practice common among lawmakers.

"We discussed whether it was above and beyond anything any of us would do in that situation to help out our district," said state Rep. Joan Brady, R-Richland. "We decided it was appropriate."

The complaint also claimed Haley should have disclosed her consulting work for Wilbur Smith on campaign filings for 2007 and 2008. Her attorney said Haley, who ran for governor on a platform of transparency, was not required by state law to report the work.

Soliciting donations

The complaint also alleged then-state Rep. Haley used her office to obtain economic benefit for her employer by soliciting money from lobbyists and the companies they represent, including companies with business before the General Assembly.

Rainey's complaint included several email excerpts in which Haley discussed her efforts to gather donations from BlueCross BlueShield, Michelin North America and others for the hospital foundation.

"But for Haley's status as a member of the House, (the foundation) is unlikely to have received the financial support of the ... (companies)," Rainey's complaint alleged. "A lobbyist making a contribution, personally or through (the company they represent), in response to Haley's solicitation could reasonably believe that they would receive favorable treatment from Haley in the future."

Haley's attorney argued it is not against the law to ask lobbyists and others to make charitable donations to a nonprofit foundation that employs a lawmaker. "These funds did not go to Governor Haley. They did not result in her receiving any kind of bonus," Patel wrote. "She never worked on any kind of commission. They only went to help support the foundation and its mission."

State Farmers Market

The complaint also accused Haley of failing to sit out votes that benefitted Wilbur Smith and not explaining why she did sit out one particular vote.

Haley abstained from a 2007 vote to override then-Gov. Mark Sanford's veto of $14.8 million for a proposed new farmers market in Richland County. In the House journal, Haley said she abstained because she might have a conflict of interest.

But she did cast a 2008 vote concerning the farmer's market.

Haley worked as a consultant for Wilbur Smith from 2007 to 2009, earning $42,500. The firm has received state contracts and was involved in planning for a Richland farmers market. (Those plans eventually were scrapped, and the market was built in Lexington County.)

Haley's attorney wrote that, while Haley was a consultant for the engineering firm, "she had absolutely nothing to do with its contracts with the State's executive agencies."

In an abundance of caution, Haley decided to sit out the 2007 vote, her attorney said. She voted on a farmers market-related matter in 2008 because Wilbur Smith's contract to work on the market had been cancelled by then.