Nikki Haley and Lost Trust II

By Paul Gable

Twenty-two years ago, it took a sting operation by the FBI to clean up some of the corruption and vote buying prevalent among General Assembly legislators and lobbyists.

Known as Operation Lost Trust, the sting resulted in 27 people, 17 of them legislators, going to jail. It was called the largest legislative public corruption prosecution in history.

Has anything really changed over the intervening period? Yes and no. The corruption is still there, only the tactics have changed.

Last week, the House Ethics Committee decided to take another look at the ethics charges filed by Republican fundraiser John Rainey against Gov. Nikki Haley.

Rainey alleged that Haley lobbied fellow lawmakers and voted on bills to benefit her employers while a member of the S.C. House from 2004-2010. He also alleged that Haley did not disclose $42,500 paid to her as a consultant by Wilbur Smith Associates while the company was working on several state contracts.

The committee voted 6-0 on May 2, 2012 that probable cause existed to investigate the complaint against Haley. But, just minutes later, the same committee voted 5-1 to dismiss the case.

After a public outcry of “coverup”, over the May 2^nd vote to dismiss the complaint, the committee reopened the case last Friday agreeing to subpoena employment and pay records from the Lexington County Medical Center and its non-profit foundation. A deadline of noon May 25, 2012 was set to receive the records, after which the committee recessed.

Two years ago, John Crangle, director of Common Cause, commented on the influence of money on the current legislative culture in Columbia. “The influence of big money at the General Assembly is probably greater than it was 20 years ago,” Crangle said. “The State House is really an auction house … what we’ve really had is the corporate takeover of South Carolina politics.”

Haley’s lawyer confirmed Crangle’s opinion when he said that Haley’s “business activities and conduct are commonplace in the Legislature.”

He went on to say Haley was innocent of wrongdoing. “To find otherwise would not only impugn the integrity of many 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.”

Her lawyer essentially said Haley’s defense is “everybody’s doing it, therefore she is innocent. The politicians are in bed with the corporations, but that’s okay.”

One of the biggest problems with containing corruption in the General Assembly is there is no outside agency to investigate ethics complaints. The House and Senate Ethics Committees are manned by legislators, who are reluctant, at best, to investigate the alleged wrongdoing of their peers.

I really don’t expect the House Ethics Committee to do anything else with the ethics complaint against Haley in this legislative session. It will all be allowed to conveniently die and be forgotten.

The famed Statement of Economic Interests that played such a big part in eliminating nearly 200 candidates from the upcoming June primary ballot was introduced in 1992, as a tool to stop money influence in government after Lost Trust.

The SEI has generally been ignored during the intervening 20 years. Haley just didn’t bother to disclose her payments from Wilbur Smith and the committee didn’t request any more information about those payments. See how well it works?

While the SEI doesn’t appear to stop corruption on the part of elected politicians, it certainly stopped the candidacies of many who may have made a change. Call this Lost Trust II.