The panel voted 5-1 to dismiss all charges against the Republican governor in a complaint filed in March. Its chairman said the case involved vagueness over what constitutes consulting and sloppy campaign filings.
After several closed-door sessions, the committee opened the door to media and unanimously found probable cause to look into the matter – a vote that made the case public under new House rules adopted Tuesday, allowing members to acknowledge for the first time the complaint existed.
Legislators have likened the probable cause finding to a grand jury indictment.
But they immediately decided there was not enough evidence to warrant further investigation into whether Haley violated ethics rules while representing Lexington County in the House before being elected governor in 2010. They also directed staff attorneys to draft a new rule for House members that clearly defines illegal lobbying versus allowed consulting.
“We felt there were gray areas that couldn’t be resolved,” said Ethics Committee Chairman Roland Smith, R-Warrenville. “We certainly don’t want to do a witch hunt.”
Rep. Laurie Slade Funderburk, the only Democrat on the panel, voted against dismissing the charges.
“I was not comfortable reaching the conclusion to dismiss without more facts,” said Funderburk, D-Camden. While stressing she’s not alleging wrongdoing, she said, “I believe a hearing is warranted.”
The committee’s review involved studying the complaint, Haley’s response and staff communication with agencies, Smith said. No testimony was taken. That would have been the next step, he said.
Haley spokesman Rob Godfrey praised the decision.
“We commend the House for doing its job seriously and professionally. Once again, we’ve seen another in a long line of made-up nonsense claims against Gov. Haley found to be meritless,” he said.
A spokesman for Senate Democrats called it a slap in the face to voters for the committee to find probable cause of wrong-doing, then vote to not hold a hearing. “This is Republican good old boys protecting their good old gal,” Phil Bailey said.
Under state law, the House Ethics Committee handles ethics complaints of current and former House members. The case marks its first ever review of a governor.
“Everybody was watching. We wanted to do this right,” Smith said. “We were trying to avoid politics.”
But Rainey said the dismissal on a party-line vote demonstrates a broken system: Dismissing the charges moments after finding cause to investigate them “defies all reason or sense of justice.”
“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,” he said, adding that he was not even told Haley had responded to his complaint.
His lawsuit and complaint centered on Haley’s jobs as a fundraiser for Lexington Medical Center and as a consultant for an engineering firm with state contracts while she was a state representative. It also asked whether it was illegal for Haley to seek tens of thousands of dollars from lobbyists for the hospital’s foundation while legislators were in session and had issues before her subcommittee.
Haley’s response repeated what she’s said since her 2010 campaign, that there was nothing improper about asking lobbyists to donate to a charity. She received no bonuses and did not work on commission, so the claim that lobbyists gave donations to buy favor is insulting, wrote her lawyer, Swatti Patel.
Rainey also accused Haley of lobbying the state Department of Health and Environment Control on behalf of Lexington Medical, as it sought permission for a new open-heart surgery center. Haley and hospital officials have repeatedly said her job as a fundraiser — a $110,000-a-year job the hospital’s CEO created for her in August 2008 — had nothing to do with the heart center.
But Rainey’s lawsuit pointed to an August 2008 email between Haley and her boss. Asked about a meeting on the heart center, she replied, “We have some work to do not only to switch votes 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!”
Smith said the important distinction is that Haley worked for the hospital’s charity, not as a hospital lobbyist. In her conversations with DHEC, she was working for her constituents who wanted the heart center, Smith said. The retired minister likened it to advocacy he’s done for Aiken’s hospital.
Hospital officials have said that while she was paid by the hospital, she worked solely for the foundation.
The committee’s three-pronged motion asked Haley to amend her 2011 “statement of economic interest” filing to reflect that her employer was the foundation, not the hospital.
Patel argued that Rainey’s complaint would suggest that all constituent services involving an agency would be illegal lobbying. In her summary, she told committee members that failing to dismiss the complaint would open a Pandora’s Box, casting allegations on other legislators’ jobs outside the Statehouse.
“Indeed, Gov. Haley’s business activities and conduct are commonplace in the Legislature and were always consistent with the law,” she wrote in the March 30 response. To find otherwise, she said, would “impugn the integrity” of many other legislators and corporate partners.
Bailey called the defense a threat, that’s also comparable to a child arguing that everyone else is doing it.
The complaint alleged Haley should have disclosed her work for Wilbur Smith engineering firm on campaign filings for 2007 and 2008. Patel’s response notes Haley did not work for the Cabinet-level agencies that had the contracts. Haley, who ran on a transparency platform, has previously argued state law didn’t require her to report that job. The firm said the consulting gig was for generating business leads.
Smith said Wilbur Smith’s contract for the state Farmer’s Market ended in 2007, so there was no evidence she was paid for doing any work on that, and there was nothing wrong with her 2008 vote on the issue.
It marked the latest ethics investigation into a top South Carolina officeholder.
Former Lt. Gov. Ken Ard resigned in March, hours before being indicted and pleading guilty to violating ethics laws. He had already paid a $48,000 civil ethics fine for using money from his 2010 campaign to pay for personal items.
Former Gov. Mark Sanford paid a $74,000 ethics fine – at the time the largest in state history – after investigations by The Associated Press and other media into Sanford’s travel and campaign practices after he acknowledged an affair with an Argentine woman in 2009.