Gov. Nikki Haley has been cleared of wrongdoing as a lawmaker by the S.C. House Ethics Committee. The panel deliberated most of the morning before dismissing four accusations against her. All but one of the votes were unanimous. On one charge, Democrat Laurie Funderburk voted Haley should have reported her income from Wilbur Smith Associates engineering firm (now CDM Smith). Haley was not required to by law because the firm did not directly employ Statehouse lobbyists.
Thursday’s hearing lasted about 12 hours.
In a surprise appearance before the South Carolina House Ethics Committee Thursday night, Governor Nikki Haley responded strongly to accusations of wrongdoing against her– calling her accuser a “racist, sexist bigot.”
The governor made a surprise appearance in her own defense. Haley had not been subpoenaed by the committee and her attorneys gave no public indication that she would testify until only moments before calling her to the stand. Although she has often dismissed the accusations by Republican fundraiser John Rainey as a “political vendetta,” Thursday was the first time Haley personally talked about the specifics of the case in public.
When asked by her attorney Butch Bowers why she thought Rainey was pushing the case, Haley responded, “With all due respect to the members of the committee and everyone in this room, Mr. Rainey is a racist, sexist bigot who has tried everything in his power to hurt me and my family.”
AUDIO: Governor calls accuser “racist, sexist bigot” (1:22)
She claimed Rainey’s actions came after she walked out of a meeting with him during her campaign for governor. “He came in and was demeaning. And he was demanding and basically said that he wanted me to prove certain things so that, if I took the oath, they wouldn’t find out later that my family was related to terrorists.”
Rainey declined comment Thursday, but he has previously told a very different version of what happened during his 2010 meeting with Haley. The Ethics Committee (consisting of five Republicans and one Democrat) subpoenaed Rainey at the request of Haley’s defense attorneys. However, the governor’s team never asked him to testify– meaning he sat in the witness holding area for the entire 12 hours of proceedings.
Rainey’s attorney called the hearing a “farce,” saying many of the witnesses were not in a position to know the specifics of his client’s allegations.
Rainey filed the ethics complaint against Haley over two jobs she held while she was still serving in the South Carolina House from 2005-2010. One of those jobs was as a consultant for the transportation engineering firm Wilbur Smith Associates (now CDM Smith). The other was working as a fundraiser for the Lexington Medical Center Foundation. Both entities had business before the state at the time.
All nine of the other witnesses who were called by the committee testified under oath they were not aware of any wrongdoing by Haley. The Ethics Committee will meet at 8:30 Friday to decide on the fate of her case. They could drop their investigation, issue an order or fine, or recommend criminal charges. The committee has already told the governor to fix errors in her 2010 statement of economic interest.
The committee started off examining Haley’s work for Wilbur Smith.
Former Wilbur Smith executive Robert Ferrell said Thursday he hired Haley as a consultant for $2,500 per month. Ferrell said he knew Haley from her pre-legislature days in the Greater Lexington County Chamber of Commerce. When she inquired about an accountancy job at the company in October 2006, Ferrell said he instead hired her as a part-time consultant.Her job, he said, was to use her contacts to find potential work for the company. Ferrell insisted that only meant private and county-level work, not state contracts.
Haley’s employment came as Wilbur Smith was having trouble in an engineering contract with a new State Farmers Market in Richland County. Agriculture officials eventually canceled that ill-fated project and instead moved to Lexington County.
Ferrell repeatedly maintained that he never spoke with Haley about the project, which was approved by the General Assembly. Haley never reported the Wilbur Smith income on her ethics paperwork. Whether or not she was supposed to will be up to the committee to decide.
Haley’s work with Wilbur Smith was terminated in September 2008. Ferrell blamed the disappearance of new construction projects as the market crashed before the recession that year. However, under questioning from committee member Rep. Joan Brady (R-Columbia), he admitted that Haley had not brought the company any new work. He blamed the economic downturn.
But most of the witnesses focused on Haley’s work with the Lexington Medical Center (LMC). Haley had already been on the hospital foundation’s board for several years when LMC CEO Michael Biediger said she approached him about a possible job in August 2008.
“She told me that her parents had sold their business… and that, in essence, she was looking for a job,” he told committee members Thursday. Biediger said he eventually created a fundraising position for her, and tasked her with reviving donations that had grown sluggish in recent years.
Here Rainey’s accusations were twofold– that Haley used the fundraising position to “shake down” lobbyists that had dealings before her committee and that she also improperly lobbied for a new heart center at the hospital.
The committee heard testimony from several lobbyists who had donated to Haley. Both Tony Dennis and Dan Jones said they donated to the hospital because Haley asked them to, not because they felt pressured. Committee members also focused on an email from a third lobbyist Larry Marchant (who was not asked to testify). In that email, Marchant reportedly told his contacts at Blue Cross Blue Shield “I’m still sucking up to Haley in the event she comes on strong in the (2010 gubernatorial) primary.”
Two witnesses from Blue Cross Blue Shield said they did not know what Marchant meant. Rainey’s attorney Chris Kenny said Marchant should have been asked to testify (A few months after the email, Marchant claimed that he’d had an affair with Haley).
Biediger emphatically stated that Haley was not hired to help the hospital in its bid for state approval on a new heart surgery center. Lexington waged a very public battle with two Columbia hospitals before eventually landing the center in a 2010 deal. Haley had left the foundation that April after hospital officials worried her run for governor was taking too much of her time.
Haley was one of several Lexington County legislators who were involved in the effort to land the heart center. However, both she and Biediger said that was part of her duties as a lawmaker– not because of her position with the hospital’s foundation.
The committee has already told Haley to correct an error on her economic interest statements regarding her work at the hospital. In 2008 and 2009, she listed the hospital’s foundation as her employer. But in 2010, she listed Lexington Medical Center itself. Under state ethics laws, Lexington Medical Center is treated differently, because it pays lobbyists to represent it in the Statehouse.
Haley called the 2010 error a mistake and said her staff has since corrected it.