Haley’s Ethics Problems

By Paul Gable

The ethics investigation into actions of Gov. Nikki Haley while she was a member of the House could cause the governor considerable problems with ethics laws.

In a complaint to the S .C. House of Representatives, Republican activist John Rainey alleged Haley “traded on the influence of her office (representative) for her personal benefit and the benefit of those paying her by (1) lobbying a state agency, (2) failing to disclose that her reason for recusing herself from voting on legislation was because the legislation’s beneficiary was secretly paying her, (3) failing to abstain from a vote authorizing payment of public money to a corporation paying her, (4) soliciting money from registered lobbyists and lobbyist principals for the benefit of her employer and (5) concealing all of this activity by making false and incomplete public disclosures.”

The S.C. Ethics Commission defines a lobbyist, “as any person who is employed, appointed, or retained, with or without compensation, by another person to influence by direct communication with public officials or public employees.”

“A lobbyist’s principal is the person on whose behalf and for whose benefit the lobbyist engages in lobbying and who directly employs, appoints, or retains a lobbyist to engage in lobbying.”

Haley, as a member of the House, certainly had direct communication with public officials and it appears she may have used them to attempt to obtain money for the Lexington Medical Center open heart surgery center expansion. That she was obviously counting votes is revealed in her August 8, 2008 e-mail to Anthony J. Meyer, Jr.

The e-mail read in part, “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. We were all given assignments and are working on them. Fingers crossed.

According to pay stubs, W-2’s and IRS form 990’s, Haley was an employee of the Lexington Medical Center when she was involved in these actions. Additionally, she received $42,500 in consulting fees from Wilbur Smith Associates and recused herself, without explaining why, on votes regarding that company.

Initially the House Ethics Commission voted 6-0 that probable cause existed to investigate Haley’s actions but, just minutes later, voted 5-1 to dismiss the case. Last week, the committee reopened the investigation into Haley’s actions.

After the investigation was reopened, Haley spoke of the original investigation (?) and the subsequent vote to reopen the investigation.

“The (House) Ethics Committee did their job,” she said. “They did a thorough investigation. They looked at everything. What should have been a legal process has suddenly turned into a political one. … It was dismissed based on fact. It was brought back up based on politics. I’m governor now whether people like it or not. Let me do my job.”

Nothing in Haley’s statement above coincides with the committee’s initial actions of voting 6-0 that probable cause for an investigation existed just minutes before voting 5-1 to dismiss the ethics complaint.

If anything, Haley statement has it backwards. The initial consideration of the charges by the committee seems to have been closed on political considerations while the reopening appears to be an attempt to exercise the legal process.

The committee appears now to be ready to investigate the complaint. If it finds possible criminal actions, it can turn the case over to the attorney general’s office or to the grand jury.

However, Haley’s problems may not end at the state level. In 1990, a federal investigation (Lost Trust) into influence peddling in the General Assembly resulted in 27 people going to jail, 17 of them legislators. The Hobbs Act was used by federal investigators to bring the charges.

Could it be used again in the Haley case?

The Hobbs Act (18 U.S.C. § 1951 ) provides the government need only prove a public official agreed to take some official action in exchange for payment as opportunities arose to do so. It is important to note, however, that it is irrelevant whether the public official in fact intended to hold up his or her end of the bargain–it is enough that the official had knowledge of the payor’s intent to buy official acts.

Was Haley hired by the Lexington Medical Center, because of her contacts and position as a legislator, to raise money for the health organization’s expansion?

Regardless of the answer to the question above, were any of Haley’s actions in violation of the Hobbs Act?

Haley may have an ace in the hole. Bart Daniel was the federal prosecutor in the Lost Trust cases. Now, he is a criminal defense attorney in Charleston.