Haley — her husband Michael and her parents in tow — represented “New Lexington,” part of a surge of out-of-towners and out-of-staters that flooded the county’s quickly spreading subdivisions in the 1990s, transforming it from its rural, small-town roots into a sprawling suburbia. Not everything was “new,” though: Haley, a Sikh who had converted to Methodism, heard ugly comments on the campaign trail directed at Hindus and Buddhists.
The “giant slayer,” as she was dubbed in the press after her win, quickly established a public profile as a champion of good government. A prolific fundraiser, she nevertheless cosponsored a bill to ban campaign donations from leadership PACs (“I’m one of those people who think you can’t put enough sunshine on the process,” Haley said) and joined the South Carolina New Statesman Society, a nonprofit created by a Republican colleague to promote “ethical and enlightened leadership.” Lawmakers “can’t work hard enough at public confidence,” Haley said of the initiative.
She had less to say about the foundation’s generous funding by wealthy individuals and corporations — many of whom were actively lobbying lawmakers, and who could give and give without heed to state limits on campaign donations. This contradiction between Haley’s apparent passion for ethical government and comfort with obvious corporate influence peddling would remain a theme throughout her political career.
In 2008, she started a months-long and very public campaign to force the state legislature to adopt on-the-record voting. South Carolina was one of only five states granting lawmakers the luxury of casting their “ayes” and “nayes” free of public scrutiny, which they had used to give their pensions annual cost-of-living increases earlier that spring. Haley paid for her efforts with a vindictive demotion by a bitter House speaker but vowed that it wouldn’t “slow me down or stop me from fighting.” By January 2009, the resulting public pressure led both chambers to change their rules on the matter.
It proved to be good timing. Only four months after forcing the rule change and one month after sponsoring a bill to codify and expand it, Haley announced she was running for governor. Depending on whom you asked, it was either a firsthand demonstration of Haley’s skill in mobilizing and harnessing public outrage, or of her skill at strategically cultivating publicity.
Haley was less keen to play up her role in another major fight, this one to reregulate the payday lenders that lawmakers had legally sicced on South Carolina consumers back in 1998. With the largest payday lender, Advance America, headquartered in Spartanburg, the industry was keen to halt a state-by-state crackdown over the preceding years that had now made it South Carolina — and they seemed to find an ally in Haley.
After clearing the state Senate, the bill was watered down by the banking and consumer affairs subcommittee she chaired. “Our job is to not choose a side,” she said, as she insisted the industry that had only been legally unshackled for a decade needed to continue to exist — so consumers had options in a pinch, of course. Within a month, the bill was dead.
Haley, who had taken at least $4,000 worth of campaign donations from payday lenders while chairing the subcommittee, was far from the only culprit in a legislature and subcommittee awash in payday lender money. State Rep. Harry Cato, whose PAC had received $5,000 from the industry, was responsible for ultimately killing the bill and insisted he, not Haley, had been the one blocking reform.
But several others blamed Haley, including fellow Republican state Sen. John Hawkins, who accused her of looking out for the industry instead of working people. (Hawkins’s motives were suspect, Haley hit back, since he was a lawyer representing people suing the unscrupulous industry.) Hawkins stuck by his criticism two years later, labeling Haley “the chief obstructionist in the entire General Assembly of any reform to payday lending” and the industry’s “no. 1 apologist.”
“We couldn’t get anything through the House of Representatives because Nikki Haley killed it,” he said.
Within a couple of years, as she ran for governor, Haley would be embroiled in an ethics scandal (and, later, a probe) that clashed with her image as a crusader for ethical government. Haley’s failure to disclose the hefty consulting fees she was pocketing from businesses with interests before the legislature was bad enough, as were the peculiar details about her six-figure fundraising job with a local hospital: that the job was created specifically for her, that its CEO and not its board approved her hiring, that she was paid far more than fundraisers at similar nonprofits, and that emails contradicted her claim that she had left the position voluntarily.
But what made it especially scandalous was that while in the position, Haley had fundraised $10,000 from two payday lenders, including Advance America, not long after she had allegedly torpedoed attempts to regulate them. The industry continued to show its appreciation, giving her campaign another $10,500 in 2010. And you can see why: with meaningful reform having been nixed, to this day the average payday loan interest rate in the state is nearly 400 percent and nearly half of all short-term loans aren’t paid off.
The Face of the New South
“I started doing books for [my parents] when I was thirteen, and one of the things I learned from them was the value of the dollar,” Haley told one audience during her first gubernatorial campaign. “Every issue that we face on the state level and on the national level, in every aspect of government, all centers around spending.” If the government cut “wasteful spending” by only 3 percent, she predicted, it would send masses of jobs and businesses rushing into the state.
Haley bear hugged the growing Tea Party movement, going to rallies and urging attendees to make their representatives support her on-the-record voting bill. She boasted during a debate that she’d signed a “no new taxes” pledge that she’d never actually signed, and which she’d denounced as “closed-minded” when first running for the statehouse six years earlier. (Once the debate was over, Haley’s campaign quickly sent through her inked pledge.)
At almost every turn, in fact, similar incidents came up begging the question of Haley’s sincerity. She campaigned on transparency, but slow-walked and partially withheld the release of her legislative emails. She touted her accounting work for her family’s business, which had failed three separate times to pay its taxes. She attacked her rival for having backed a legislative slush fund for infrastructure projects from which she’d personally requested more than $1 million. She called on South Carolinians to “fight back against the federal government” and say no to federal cash, but voted to accept $700 million from the Obama stimulus. (She later voted against the budget that contained the money and claimed the first time had merely been a “procedural” tally.)
But what proved to be her campaign’s biggest setback was what had started out as its chief advantage. Haley had allied herself closely with Gov. Mark Sanford upon entering office, and he had reportedly been the one who convinced her to run in the first place. But when the public learned Sanford had been using public money to pay for extramarital trysts with a secret Argentine lover, overnight he became political poison at the state level and a punch line at the national one.
Haley’s campaign rushed to scrub all trace of the governor’s images and praise they’d plastered over her website, and the candidate distanced herself from Sanford — to a point, anyway. They still shared the same kingmaker political consultant, and a pro-Sanford nonprofit formed by one of his former staffers, three of whose board members maxed out to Haley’s campaign, spent hundreds of thousands on ad buys supporting her candidacy. Sanford later disclosed that Haley had repeatedly asked him for financial help. Upon securing the nomination, Sanford was the first person she thanked in her victory speech.
After lagging behind on fundraising for much of the race, Haley ended it in a tie, helping set a state record for chasing money. Roughly a third of it, or more than three times that of Democratic rival Vincent Sheheen, came from outside the state. Another $900,000 was spent on ads in the final weeks by the Republican Governors Association (RGA), itself boosted by donations from several tobacco companies.
In the end, what sealed Haley’s win more than anything may have been timing: November 2010 was the date of Obama’s infamous recession-driven midterm “shellacking ,” which saw Republicans seize back the House, twenty state legislatures, and ten governorships. Conservatives were positively giddy.
Here, it seemed, was their reply to America’s wildly changing demographic realities. As Newsweek declared Haley “the face of the New South,” Newt Gingrich wondered, “could you pick a more perfect symbol of change?” Even Democratic apparatchik Neera Tanden declared that, as an Indian American herself, she was “proud of [Haley’s] accomplishment.”
State Government, Sold — To the CEO in the Back
Sanford left his successor a mess. State lawmakers had spent the 2000s bingeing on tax cuts, and Haley was walking into the governor’s mansion during the hangover.
When the 2008 financial crisis sent hardship soaring, increasing South Carolina’s public assistance rolls, the state faced a budget shortfall of more than $800 million. Everything from colleges and welfare to the agency in charge of maintaining state-owned office buildings was looking at deep cuts, after having already drastically reduced services. The state’s Department of Health and Human Services — its Medicaid program — alone faced a whopping $228 million deficit despite scaling back services.
What was Haley’s solution to this desperate crisis? To double down on everything that had caused it.
First, she set about directly handing the reins of government over to big business — or, in her words, to those who “understand that time is money” and “know what it’s like to be on the other side of the red tape.” During the campaign, Haley had organized meetings to reassure local business leaders; they’d been so fed up with the gridlock caused by Sanford’s rocky relationship with the legislature that the state’s Chamber of Commerce — which Haley had earlier labeled a “big fan of bailouts and corporate welfare” — had endorsed Sheheen, her centrist Democrat opponent. Now, she was making good on those assurances.
Haley stocked her fourteen-member transition team with business leaders who picked others like them to head departments overseeing everything from insurance to revenue: an ex-BMW executive, a former Royal Bank of Canada CEO, a seasoned manufacturing industry CFO, and a Morgan Stanley principal, to name a few. She shunted all but one person off the Department of Health and Environmental Control (DHEC), in charge of environmental protection, and put largely businesspeople in their place.
A previously wary corporate world began bombarding Haley with generosity. Within months of taking office, her campaign had raised $50,000 from business interests, while another $700,000 flowed into the inauguration fund; seventy-nine of its eighty-six donors were businesses, many of them part of the very industries being regulated by the agencies Haley was busy appointing. It wouldn’t have been right to use tax money for the festivities, her spokesman explained.
Haley would never again have trouble raising money like she did during that first campaign, spending the rest of her tenure zipping around the country for fundraisers, breaking state campaign haul records, and easily outpacing all rivals. When she ran for reelection in 2014 against Sheheen, whom she had barely beaten in 2010, she at first outraised him by 70 percent, then more than double, then nearly triple. The state’s Chamber of Commerce switched its allegiance to her, as businesses effectively became her most enthusiastic and reliable base.
Haley’s benefactors showered her personally with expensive gifts — jewelry, art, concert tickets, trips, ritzy accommodations — that reached their highest volume as she soaked up national publicity in her final year.
Name a big corporation or a Forbes -listed billionaire, and it’s likely that, between her 2010 win and 2016 exit, their money slithered over to Haley at some point: to her campaign coffers, to her charitable foundation, to the political organization she’d founded to push her causes and candidates, or to her leadership PAC, all of which received a seemingly constant stream of largesse from a who’s who of powerful interests. That included Walmart, Verizon, Koch, Adelson — even then–reality TV star Donald Trump, who must’ve seen something in the young Republican, donating to both of her gubernatorial campaigns as well as her advocacy organization. When they weren’t doing that, they showered her personally with expensive gifts — jewelry, art, concert tickets, trips, ritzy accommodations — that reached their highest volume as she soaked up national publicity in her final year.
It was good to give. One campaign donor, private prison operator GEO Group, was in the mix when Haley considered privatizing state mental health services, despite the company’s history of being sued over inmate deaths and mistreatment. Another donor, the American Insurance Association, saw its longest-serving head lobbyist picked to run South Carolina’s insurance department, despite one witness at his confirmation hearing warning that the industry was targeting the state as a “honey hole” because of its lax regulations.
Sometimes, the money chasing got Haley in hot water. In November 2011, only two weeks after raising $15,000 at a Georgia fundraiser hosted by a well-connected state Republican who sat on the RGA’s finance committee, Haley intervened in a DHEC decision rejecting the state’s permit application to dredge the Savannah River over water quality concerns. Georgia’s governor had asked her to get him a hearing with the DHEC board, which she appointed, and soon the decision was reversed.
The whole incident became a full-blown scandal, further fueled by Haley and her staffers’ refusal to cooperate with an official inquiry into the matter, necessitating subpoenas. More than anything, it was simply a bad idea “on every single level — environmental, competition wise, expansion, the cost,” as one Republican lawmaker put it, to the point that the House voted unanimously to disapprove of the move.
The Senate ultimately undid the permit, but only by overriding Haley’s veto first. “Why the governor persists in being the sole person in the state of South Carolina who is intent on helping Georgia gain an advantage over South Carolina is baffling,” said another Republican. Despite the optics, Haley went back to the Peach State for another lavish fundraiser a few years later.
She drew another round of bad headlines in 2015, when in her quest to create a “business-friendly” DHEC, Haley nominated as its chief Eleanor Kitzman, an insurance industry executive and former Goldman Sachs lobbyist. Kitzman was a rare triple threat: a donor, fundraiser host, and personal friend of Haley. Within days, as senators questioned Kitzman’s lack of experience and background in the field, the fact that she was the only candidate considered for the position, and that she’d been put forward after telling Haley privately that she was looking for a job, Kitzman withdrew. One newspaper called it “a ‘how-to’ manual on bad governance.”
Homicide by Budget Cut
Next, Haley embarked on a program of pitiless austerity that she claimed would turn around the state’s economy.
“Nearly two years ago, the federal government in Washington decided to transfer its irresponsible fiscal practices to the states. And our state, just like every other, accepted it,” she said ominously in her inaugural address. “When we produce this year’s budget, we will see the heavy price for having done so.”
With Haley’s veto hanging over the process, legislators crafted a budget in her first year that slashed $5.2 billion from state spending, largely targeting welfare, Medicaid, public schools, and colleges, while tapping into unused reserves to help fill any fiscal holes left over — all for the sake of clinging to the $3.7 billion worth of sales and service tax breaks the state had enacted in previous years. “We could not raise any tax,” said Republican Dan Cooper, the House Ways and Means chair at the time, noting that there was nowhere near the two-thirds majority needed to override a potential Haley veto of a tax hike.
In fact, within months, Haley would sign another tax cut: this time for real estate, citing “a problem with second home ownership that was starting to fall terribly” and the need to get business activity and “the real estate market across the state churning again.” A year later came a two-point small business income tax cut that lowered the rate to 3 percent. For the rest of her tenure, not a year went by that Haley didn’t propose massive tax cuts as the cure for the already revenue-starved state’s ills, whether phasing out the corporate tax entirely as she’d campaigned on, or merging South Carolina’s seven personal tax brackets into three. Another Republican, then–Senate finance chair Hugh Leatherman, criticized her for trying to “do tax relief to build a political resume.”
The other part of that resume was Haley’s chief executive role, as she saw it, to “hold everything down [so] we are not running deficits.” Almost no program was immune for those five years to Haley’s veto pen or the cost cutters she’d put in charge of her administration. Arts, parks, seniors, homeless youth, raises for teachers, HIV and AIDS prevention, disabled services, rape crisis centers — all of them and many more were deemed unworthy of public investment by Haley over the course of six budgets, and only some of them were saved by a GOP-dominated legislature determinedly overriding her vetoes.
“What we saw was the rebirth of earmarks,” she said as she vetoed $100,000 for a playground for kids with disabilities. “It is not for state tax dollars to go to. Let the taxpayers decide if they want to give to a playground.”
At a time when South Carolina’s unemployment was consistently among the country’s highest, and in a state where more than four in five taxpayers reported income less than $50,000, the brunt of Haley’s cuts often fell on the jobless and poor. South Carolina’s welfare agency faced $5 million in cuts, and Haley imposed a further $7 million by completing Sanford’s plan to pare down the already paltry family welfare payment of $270 a month — already a fraction of the poverty line — by a fifth.
Her attacks on the jobless seemed especially petty, given the state’s 10 percent unemployment rate when she took office, and the fact that many of South Carolina’s unemployed had, like their counterparts across the country, been pushed out of work by a global recession. Haley chopped jobless benefits from twenty-six to twenty weeks, limited them for seasonal workers, and stripped South Carolinians of up to seventeen weeks of the federal extended benefits they’d been granted under the Obama stimulus law. For good measure, Haley undermined another stimulus provision meant to help people cope with the crisis, ignoring its work requirement waiver for food stamps and slapping the requirement on anyway.
Two years later, citing “foot traffic,” Haley’s administration closed in-person, one-on-one unemployment services in seventeen rural counties with high jobless rates, seven of them among the state’s ten worst for unemployment. The eight positions eliminated in the process saved around $400,000, yet legislators couldn’t help but notice the agency had simultaneously given nearly seventy other employees raises totaling nearly $440,000. In the ensuing controversy, the agency’s director — a board member on one of Haley’s political organizations — resigned, now firmly a pattern in Haley’s governorship.
The tragic consequences of South Carolina’s many years of austerity became manifest in 2014, when several child deaths under the state Department of Social Services’s (DSS) watch triggered a sprawling scandal that threatened Haley’s reelection. While she was boasting about how many people her DSS — meant to be responsible for the well-being of vulnerable children — had shifted off welfare rolls (“we take care of children in lots of ways,” she gushed), it soon turned out the agency had failed to report more than 150 deaths of children and wildly misled federal authorities about both its shortage of caseworkers and the absurd number of cases that each handled.
In the face of mounting calls for Lillian Koller, Haley’s pick to run the agency, to step aside, Haley implacably defended Koller, even after she became yet another appointee to resign. The DSS had closed a $28 million deficit and moved more than 20,000 people from the welfare rolls into jobs, Haley insisted, and she remained “proud of Lillian, the work she’s done at DSS, and most of all, that I can call her my friend.”
The rot went deeper. Not only was the agency chronically underfunded and overburdened, with state government warned as recently as 2006 that caseloads were too high, but the decision under Haley to outsource the handling of child abuse cases to contractors two years prior had been a shocking failure. An audit found that the agency’s investigations into child abuse complaints dropped 34 percent after taking up the outsourcing, while the number of kids that were subsequently abused in their families more than doubled when they were assigned to contractors.
Haley’s competence as a manager was widely questioned. But she sailed to victory a month later anyway, in an election that saw the lowest voter turnout in four decades and every incumbent keep their seat. Her winning margin had actually widened since 2010.
Medicaid, Medican’t
As the parade of brutal cost cutting marched on, Haley rejected what should have been an elegant solution to both the budget crisis and the recession-era hardships endured by South Carolinians.
“We will not expand Medicaid on President Obama’s watch. We will not expand Medicaid ever,” she vowed.
She was referring to one of the virtues of Obama’s largely underwhelming health care law, namely the provision paying for states to make more people eligible for Medicaid — specifically, anyone making 138 percent of the federal poverty level or less, instead of the 50 percent figure that the state was currently covering. For South Carolina, that would mean adding roughly half a million people to the federal program, making it responsible for insuring a third of the state’s population.
Contrary to Haley’s claims that adopting it would “bust our budget,” the expansion was a good deal for South Carolina. The federal government would pick up the full tab for the first three years, then gradually lower its share of the cost burden to a still hefty 90 percent by 2020, where it would stay indefinitely. At one point, Haley badly garbled these details to an audience, claiming the federal government’s share for those first three years was only 90 percent, after which point it would stop paying altogether — suggesting she either hadn’t bothered to brush up on the policy she was vehemently opposing, or was cynically lying about it.
Why would someone in Haley’s position oppose this? For one, besides the chilling prospect of headlines declaring Haley had taken federal money, Obamacare in general had become a poster child for “big government” overreach in the eyes of the GOP establishment and the Tea Party. And Haley had already started building a national brand opposing the law, traveling to Washington before she was sworn in to tell GOP leaders that “we need you to help us fight these mandates like health care.”
Emails later showed that, as they fought Obamacare, Haley and her team were intensely concerned about the political optics. “They’re not looking at the merits of the legislation and whether it advances the cause of South Carolinians. They care about ‘whose side we appear to be on’ and keeping an arm’s length from anything to do with the Affordable Care Act,” was how a disappointed Frank Knapp, president of the state’s Small Business Chamber of Commerce, summed it up. “They’re still running a campaign.”
There were also the governor’s ties to the insurance industry. In 2010, insurance interests had given Haley three times what they’d given Sheheen, while health insurers like BlueCross BlueShield had also donated to her inaugural fund. In turn, Haley had made several industry-backed appointments, including former insurance agent Tim Scott, whom Haley appointed a US senator in 2012.
Haley spent the next five years resisting Obamacare’s successful implementation in the state, including by stubbornly refusing to enact the Medicaid expansion despite the obvious, dire need.
More than 800,000 South Carolinians were already benefiting from the law’s provisions in Haley’s first term, like those letting young adults stay on their parents’ insurance plans, and nearly 19 percent — more than a million — were uninsured in 2011, facing the abyss of potential medical catastrophe. In a state where 16 percent lived below the poverty line, the downturn and years of budget cuts, Haley’s included, threatened the chronically ill and disabled who relied on government programs to stay alive and healthy, while the state’s dying hospitals resorted to layoffs and hiring freezes in the face of dwindling patients. Some simply filed for bankruptcy or closed.
As time went on, Haley’s opposition to Medicaid expansion made less and less sense. One by one, other Republican governors went along with the policy, while more and more voices within the state clamored for it: hospitals, newspapers, majorities of older residents, and voters more generally — even the state’s Chamber of Commerce, whose president warned that the foot dragging hurt businesses, including via a $2,000-per-worker fine for large firms in states that refused expansion. Studies and analyses tipped expansion to create 44,000 jobs, boost GDP 1 percent, bring $16 billion into the state, add $9 million worth of tax revenue, and provide a lifeline for the state’s cash-strapped hospitals.
It was all in line with Haley’s ethos of fiscal responsibility, economic growth, and job creation. Still she refused. Headlines showed the human cost of her obstinance: an uninsured flu patient left with an $800,000 medical bill; hundreds queueing for hours at a free two-day dental clinic; a pizza delivery man, dead from cancer, who had delayed seeing a doctor after falling into the infamous coverage gap, one of 123,000 South Carolina adults in the same position.
It’s not as if there weren’t alternatives that could have alleviated some of this suffering — Haley just dogmatically rejected them all. As she planned out her painful first term cuts, hospitals offered to voluntarily pay higher fees to the state Medicaid system to fix the budget crunch; no, said Haley, because that was technically a tax and would be “immoral.” When a bipartisan group of senators suggested using government funds to help the working poor buy private insurance in the federal health care marketplace, as other red states had done, Haley declined; the idea was a backdoor to a mandate in the style of Obamacare, which, lest anyone forget, was “a budget-busting, job-killing disaster.”
By the time she left office, the state’s health care conditions were dismal. Anywhere between 10 to 12.3 percent still lacked health insurance, one of the worst rates in the country, and with one of the lowest rates of public health spending, South Carolina led most of the nation on metric after metric that no one wants to lead in, from infant mortality and premature death to diabetes and lack of dentists. Ranked the ninth most unhealthy state in 2016 by the United Health Foundation, it had barely budged from the sixth place it had recorded in Haley’s first year. South Carolina remains one of only ten states that have still not expanded Medicaid.
Union-Buster-in-Chief
It wasn’t just the poor, uninsured, or unemployed. Anyone could be sacrificed so Haley could claim she hadn’t hiked taxes or taken part in a “bailout” — including those who had a job.
Leading the five-member State Budget and Control Board (SBCB) — a powerful entity unique to South Carolina that is responsible for setting government policy and administration — Haley took aim at teachers and other government workers, cutting cost-of-living raises for retirees and repeatedly hiking their health insurance premiums, after workers had already had to eat more than a decade of premium hikes. It was a nuisance for workers, but proved a boon for Haley donor BlueCross BlueShield, which happened to administer the state employee health plan.
Particularly outrageous was when she raised those premiums a second time in 2012, further fattening her own corporate donor’s profits with worker pay. The move was entirely unnecessary: lawmakers had specifically budgeted that year so state employees wouldn’t have to face another premium hike, part of a delicate budget deal that Haley had already signed into law. But Haley persuaded two other SBCB members to overrule them, infuriating Republican leadership. A year later, the state Supreme Court ruled the board had been in the wrong, undoing the hike. Haley insisted she had simply been “making a statement for the taxpayers.”
“Ask anybody in the private sector if they get the benefits that state employees get, because they don’t,” she said. “And ask anyone in the private sector if they have the extra money to pay for state employees to have benefits. They don’t.”
You didn’t have to read between the lines to sense a quiet antipathy for workers in Haley’s words and deeds, one that often took the form of a virulent opposition to labor unions.
“There’s no secret I don’t like the unions,” Haley once said. “We are a right-to-work state. I will do everything I can to defend the fact we are a right-to-work state.”
She made that dislike vocally clear wherever she could: at Tea Party rallies, at her annual State of the State addresses, at a rotary club visit, at an automotive conference, or while accepting an award at the US Chamber of Commerce, where she vowed to “get rid of the influence that [unions] have on the system.” She discouraged businesses from moving to the state if it meant they’d bring a unionized workforce. “I think they are job killers. If you bring a company to South Carolina, I’ve got your back. I’m not letting [unions] in,” she said.
It wasn’t just talk. Haley swiftly appointed to run the state’s labor agency a union-busting lawyer who had attacked United Auto Worker organizing efforts, because “we’re going to fight the unions and I needed a partner to help me do it,” a remark that earned her a lawsuit from the AFL-CIO. South Carolina law barred striking workers from receiving unemployment benefits, but she signed an executive order to that effect anyway. She endorsed a GOP bill allowing businesses not to notify workers about their rights to unionize, and signed another one forbidding state government entities from making contractors sign agreements with unions for work on public construction projects.
Haley’s union-busting energy was focused in particular on the International Association of Machinists’s (IAM) efforts to unionize a new Boeing plant in North Charleston. She campaigned relentlessly against the effort, including taking out a radio ad urging Boeing workers in the state not to join. When the National Labor Relations Board (NLRB) issued a complaint against the company, charging that it had violated federal law by moving operations from Washington state to anti-union South Carolina, she labeled it a “rogue agency” that needed to be disbanded, and organized a press conference at the Chamber of Commerce with other prominent Republicans to call for governors and businesses to work together to combat it. “When you go after a corporate citizen in South Carolina, it is personal to me,” Haley said. The NLRB suit would “chill” firms’ ability to expand across state lines or bring jobs stateside, she testified to Congress.
In the end, Haley got her way: the IAM decided to delay its union vote in 2015, blaming Haley in part for “creating an atmosphere of state-sanctioned hostility toward unions and union organizers” that had “intimidated workers to the point we don’t believe a free and fair election is possible.” Two years later, when Haley was gone, the union vote was finally held. It failed.
For Haley, it was part of a race-to-the-bottom vision that put the concerns of big business first, and assumed that allowing them to wring every last drop out of workers was a precondition for creating jobs. The fact that South Carolina was one of the country’s least unionized states — on the eve of the union vote, the unionization rate was at 2.2 percent of the workforce and dropping — was “an economic development tool unlike any other,” she said.
“We Did What the Company Asked”
It didn’t hurt that Boeing was a donor, of course, pitching in to both Haley’s campaign and her inauguration. That fact lent an air of impropriety to the $120 million the state borrowed in 2013 to incentivize expansion plans by the company, whose revenue was more than three times the size of the state’s entire budget. Haley signed that measure only two weeks after it was introduced into the Senate, while the SBCB that she led planned to approve an added bridge loan for the firm — all of which came on top of the nearly $1 billion in tax incentives the state had already thrown at Boeing under her predecessor.
It likewise added impropriety to Haley’s tireless advocacy on Boeing’s behalf, which at times was closer to that of a company pitchwoman than an elected official. At one point, Haley headlined an aerospace industry expo and declared that “the reason the state’s aerospace industry is growing is because Boeing is growing.” She was so eager to promote the company, she made up favors she’d done for it, falsely claiming one of her appointees had sped up the permitting process to let its North Charleston plant open six months early. After Haley left office, Boeing made the relationship official, giving her a lucrative seat on its board of directors in 2019.
Boeing wasn’t the only firm that got plum treatment. “I don’t think you just hand over a check to win someone over. I think you create a business environment that allows them to make money every day,” Haley said of her approach to attracting firms to the state.
Yet the two often seemed to mean the same thing to her in practice. By her first sixteen months in office, as Haley slashed spending and piled burden after burden on struggling South Carolinians, she had handed out at least $70 million in incentives to various firms. Even Haley’s political allies at the South Carolina Policy Council accused her of corporate welfare that helped only a few at the expense of most of the state’s people — especially as a Pew Center on the States analysis had found South Carolina was lax in verifying whether the money it poured into these incentives delivered a good return.
At one point, the state gave $1.2 million to a grifter who vowed to invest $50 million to reopen a closed textile mill in Pee Dee and create hundreds of jobs, but instead spent the money on a luxury SUV and an expensive Palm Beach wedding while wiring hundreds of thousands to a South American bank account. Haley had called the fake plan a “big win for one of our state’s rural areas” and personally turned up to welcome the fraudster to the state, telling him, “you are taking a chance on us. . . . We are going to wrap our arms around you.” The whole thing hit the headlines in 2015 when he was indicted on wire fraud changes and, separately, over a $29 million Ponzi scheme.
Arguably more notorious was an incentives package for Volvo that Haley had gotten legislative approval for that same year. Despite having just tanked a plan to borrow nearly $500 million for much-needed building projects — Haley urged her irate Facebook followers to yell at their representatives for supposedly running up the credit card to pay for “random things,” and made clear she would veto any bill that borrowed money — she enthusiastically pushed this one, despite its comically and significantly worse terms, and despite the fact that the state had enough money on hand to not have to borrow.
Under the deal, the state would cover only the loan’s interest for the first six years and then make a massive payment on the principal on the seventh, adding $87 million to its price tag — known as a balloon payment, a forte of the kinds of predatory lenders that had triggered the recession. Hugh Leatherman, a Republican and now the Senate president pro tempore, called it one of the “most irresponsible things” and “the worst kind of credit card debt” he’d ever seen, and lawmakers later lectured Haley on her reckless fiscal management and the fact that she’d gone around the legislature to strike a deal with Volvo directly. “Volvo cars wanted this process to be a certain way,” Haley explained. “They wanted it through economic development bonds. They did not want it to go through the legislature.”
“We did what the company asked,” she said.
Similar to Boeing’s campaign donations, Volvo rewarded Haley with expensive gifts. This was a pattern. Six of the twenty-nine companies that put more than $10,000 into Haley’s inauguration fund got incentives packages from her. Others, like Walmart, Michelin, and Bridgestone, gave to her campaign.
Meanwhile, as commentators pointed out, a similar number of jobs would have been created, and at a markedly lower price tag, had Haley just agreed to expand Medicaid — something she objected to out of supposed concern for the taxpayer.
Roads Not Traveled — Or Fixed
With reelection in the bag — secured thanks to an unemployment rate that dipped to a thirteen-year low just in time, and an uncharacteristic election-year cash infusion into education — Haley turned to what would end up being her final failure as governor.
Fixing South Carolina’s infrastructure — which needed an estimated $30 billion over two decades to address the 21 percent of bridges deemed structurally inadequate and an aging drinking-water system ordered to undergo $700 million in repairs, among other woes — was a top priority for Haley’s business base. The state’s poor roads undermined its tourism industry, made it harder to attract businesses to the state, and cost firms that depended on them millions of dollars in repairs and lost time, they said. When Haley left office, that was more or less still the case.
The seeds of failure were planted at the outset of her second term, when Haley laid out her bottom lines for an eventual infrastructure package. After having ruled out a gas tax hike in the campaign she’d just run, Haley had a sudden change of heart, announcing she would be open to boosting it by 10 cents — but on two conditions: the legislature had to restructure the Department of Transportation (DoT) to her liking, and, more contentiously, the state’s highest earners would receive a two-point tax cut over ten years.
The proposal was breathtakingly regressive. About 1.1 million of the state’s poorest residents, who already paid no state income taxes, would in practice see their tax bill rise thanks to the $66 more a year the average South Carolinian was expected to pay for gas under the plan. Meanwhile, fewer than four hundred of the state’s wealthiest taxpayers would enjoy a staggering cut of $145,784 each, more than two hundred times the savings that the average, nonwealthy taxpayer would get.
If that wasn’t enough, the reduction would leave a $1.8 billion hole in the budget — spooking credit agencies, most likely necessitating cuts to the state’s already revenue-starved essential services. Haley’s response was pure voodoo economics , cheerfully assuming that the rockstar economic growth that was sure to follow would take care of the problem. And besides, she said, “is South Carolina going to get bloated and grow into all of those revenues? Or are we going to be smart about it . . . and give it back to the taxpayers so that they can invest it, and spend it the way they want?” The Democratic house minority leader called the idea “an impossible roadblock” to an infrastructure bill.
Sure enough, as the legislature spent the next five months wrangling over the package, lawmakers complained that Haley’s demands were making it difficult to find an acceptable compromise. Any proposal that didn’t include the tax cut or which levied new taxes to raise revenue was dead on arrival, knocked aside by Haley’s frequent veto threats.
Haley’s railing against the legislature — publicly attacking lawmakers, including from her own party, in speeches, on her website and Facebook page, and at the state Republican Party convention — couldn’t overcome the political corner into which she’d painted herself and legislators. The session ended with no infrastructure bill. While Haley wasn’t the only one to blame, there was broad agreement that she had been distinctly unhelpful, to say the least. “Gov. Nikki Haley overplayed her hand,” charged one newspaper. She had “introduced an income tax cut plan” instead of a roads one, said one Democrat, “and that poisoned the well.” “When the governor tied a massive tax reform to the infrastructure issue . . . that was probably the break point,” agreed the Republican house speaker pro tempore.
The consequences of this failure, the cream on top of a rising soufflé of years of determined public underinvestment, were felt within months, when what came to be called the thousand-year flood, in October 2015, proved too much for the state’s decrepit infrastructure. Dozens of its 2,400 dams — many of which had escaped inspection by the state’s almost comically understaffed and underfunded, near-worst-in-the-nation dam safety program — crumbled, sending floodwaters on a path of destruction over hundreds of homes. A canal that provided half the drinking water for Columbia residents collapsed, leaving South Carolina’s largest city bereft for more than a week. Nineteen people were killed and twenty thousand displaced, with a total of $1.2 billion worth of damage. The state faced a $114 million bill for its share of the cleanup and rebuild, on top of the $1.5 billion a year still needed to get its infrastructure up to snuff.
Yet none of this seemed to move Haley an inch. Especially hard-hearted was her refusal to support extra direct aid for the state’s farmers, who had seen $330 million worth of crops destroyed and faced a further $46 million of losses via the winter crops that couldn’t be planted in the aftermath. They should be treated like any other business, Haley insisted, as hundreds of desperate farmers pled for help at the statehouse, the sector warned of a rash of bankruptcies, and commentators across the political spectrum pointed to the massive blow it would strike to the heavily rural state’s economy. No matter: it would be a “bailout,” said Haley, and “we do not do bailouts in the state of South Carolina.” The state legislature passed an aid bill anyway, though only by overriding Haley’s veto.
Nor did the devastation move her on the crux of the matter, the state’s still dilapidated infrastructure, with Haley continuing to serve as an obstacle to roads funding as the 2016 legislative session got underway. As she begged workers across the country to chip in to the state’s flood relief fund, she continued to insist on her $1.8-billion-a-year tax cut, rejecting a GOP plan that raised $700 million for roads while lowering taxes for the highest earners by 1 point. “I will stay at the 2 percent[age points] until they give me reason to go below that,” she said, vowing “to veto anything that is a net tax increase.”
This legislative Groundhog Day went on for another five months, with identical results as the year before. It was only thanks to a last-minute compromise bill hammered out by lawmakers and sent to Haley’s desk in June that the South Carolina government didn’t end up empty-handed for a second straight year. There would be no tax cut for the rich, nor a gas tax hike. The state would instead borrow $2.2 billion over ten years, facilitated with $200 million a year from vehicle sales taxes and existing fees. With Haley keeping mum on whether she’d sign, GOP leader Leatherman urged Haley to “use good common sense one time” and just sign the bill, warning the votes were there to nix her veto.
“Over the past couple of years I would hope that she’s learned her vetoes don’t carry too much weight in the General Assembly,” Leatherman warned. Haley inked it, “for one reason and one reason only,” she said, pointing to the bill’s provisions allowing for the restructuring of the DoT, which had survived in the deal.
The Lucky One
For another politician, the roads debacle might have been a career-killer, a real-time indictment of Haley’s political and economic philosophy and her competence as an executive. But Haley’s political future was kept alive, even reinvigorated, by two unlikely events.
One was the horrific June 2015 white supremacist murder of nine black churchgoers at a Charleston church, by a killer whose photos posing in front of the Confederate flag quickly spread across the Web. The public outrage that followed fueled a successful push to finally remove the Confederate flag from the state Capitol, a push that Haley soon became the public face of and drew national adulation over. By the time she left office, the episode had prompted observers across partisan lines to declare her the kinder, more tolerant future of the Republican Party.
In theory, it shouldn’t have. Haley had rebuffed the idea of eliminating the flag just a year earlier while running for reelection, calling her opponent “desperate” for suggesting it, while asserting that she had “not had one conversation with a single CEO” about it, and that “we really kind of fixed all that when you elected the first Indian American female governor.”
After the shooting, she dragged her feet as pressure on her built, staying silent or insisting a debate about the flag should wait, and getting behind the effort only after the arrival of out-of-state protesters on each side of the issue became a possibility. In fact, her initial response to the news was to put her foot in her mouth by claiming that “we’ll never understand what motivates” someone like the white supremacist shooter, and she drew criticism for not lowering the Confederate flag in the wake of the shooting. Haley claimed she had “pretty much decided” she would nix the flag days before her announcement, but just hadn’t said so publicly.
But beyond that, Haley had spent years building a resume as a hard-line conservative that clashed with this new image. She had backed and signed into law a carbon copy of Arizona’s notoriously discriminatory “papers, please” immigration law, enacted the kind of voter ID law that Democrats routinely charged was a tool of racist voter suppression, and wanted Syrian refugees kept out of South Carolina. She had gone so far as briefly name a member of the Council of Conservative Citizens, one of the hate groups cited as an influence in the Charleston shooter’s manifesto, her reelection campaign cochair.
Nevertheless, Haley’s alleged leadership on the issue became a core part of her political brand going forward and was central to the largely rose-tinted local media retrospectives of her tenure once she exited the governor’s mansion, eclipsing — or, more accurately, erasing — the years of scandals, mismanagement, and cruelty that had come before. Only a small few seemed to remember. “She is not the poster child for racial harmony,” said Rev. Joseph Darby, a Charleston NAACP official and friend of one of the murdered churchgoers.
The other unlikely boon to Haley’s career was the rise of her former donor, Donald Trump. Trump and his brand of explicitly bigoted conservatism proved the perfect foil for this new Haley persona, and she relished the opportunity to raise her profile and broaden her political appeal by publicly criticizing him, staking out territory as the face of the “moderate,” anti-Trump wing of the GOP.
The press gladly went along with the shtick, despite Haley first making clear she would vote for Trump over Hillary Clinton, and then officially endorsing him. After Trump prevailed, Haley told a group of lobbyists and political operatives that she was “giddy” about his victory and the opportunities it presented to roll back regulations. Trump soon offered her a job in his administration, as ambassador to the United Nations (UN), which she accepted, she said, out of “a sense of duty,” despite having promised just two years earlier to see out her full second term.
Trump’s win and subsequent job offer gave Haley another unexpected lifeline. Haley had spent big in 2016 through her political organization, A Great Day SC — one of the governor’s many vehicles for corporate pay-to-play — to unseat several old-guard Republican leaders with whom she had clashed, including Leatherman. She was largely unsuccessful — only three of her eight endorsees came out on top, and both Leatherman and the likely next chair of the Senate judiciary committee survived the onslaught of negative, Haley-financed ads. That, coupled with lawmakers’ resentment at Haley’s frequent public criticism, left her with the serious possibility of governing for her last two years with an embittered and uncooperative legislature.
Haley was leaving for the UN offices in New York just in time, in other words, avoiding this embarrassing prospect while notching up some much-needed foreign policy experience in advance of a future presidential run. South Carolina’s many remaining challenges — its decaying roads, shameful levels of poverty and ill-health, and perma-state of budget crisis — that Haley had failed to meaningfully address, and in fact largely made worse, would be passed on to her lieutenant governor.
As she made her exit, lawmakers looked forward to an era where “we’ll see less vetoes and more willingness to work with us.” In her final acts as governor, Haley hiked state workers’ pension contributions, before proposing tax cuts worth more than $1.1 billion a year.
More of the Same
Nikki Haley’s record in South Carolina offers as good a preview as you could get of what her potential presidency would look like. It’s a relatively straightforward story.
Ruthlessly devoted to her own political advancement, Haley forged a symbiotic relationship with corporate interests and the ultrarich and, as a result, left the place she was responsible for governing worse off. A small number of wealthy and powerful people made off like bandits, while the rest of the state, particularly workers and the poor, gritted its teeth and suffered. All the while, her administration racked up a shocking rap sheet of scandals, corruption, mismanagement, and fiscal irresponsibility, one that left her political career surprisingly unscathed — a perverse testament to her political skill.
Throughout her current presidential campaign, Haley has made it abundantly clear that she would bring the same approach to running the country. She continues to be the darling of the country’s wealthiest oligarchs, hoovering up donor cash and proudly touting the backing of the billionaire Koch network that had supported her while governor. She wants to bring her program of neoliberal austerity to the national stage, combining plans for severe tax and budget cuts with calls to raise the retirement age and other “reforms” to Medicare and Social Security. She proudly calls herself a “union buster.”
Whether as president, Trump’s possible running mate, or a cabinet member in a future Republican administration, Nikki Haley likely has a long, bright future in politics and will continue to float close enough to power to put her hands on it. The US public should be under no illusions about what exactly that will mean.
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