Haley and hacking: What will the final impact be?
ISLE OF PALMS — Gov. Nikki Haley beamed from behind the dais as a ballroom full of business leaders welcomed her to their luncheon at Wild Dunes with a standing ovation.
What Time magazine said
Gov. Nikki Haley is among six Republicans and seven Democrats who posed for a Time photographer.
Here’s the magazine’s synopsis of her career at this point:
Journey: The daughter of Sikh immigrants from India, Haley, a converted Christian, endured racial slurs, allegations of marital infidelity, and hostility from some local Republicans but won friends in high places, including Sarah Palin, on her way to becoming the first female governor in South Carolina history — and the youngest in the country.
Mandate: A Tea Party favorite, she has slashed Medicaid spending and signed a strict voter-ID law.
Mission: Despite her national profile, Haley says her focus is luring jobs to the Palmetto State.
The feeling was mutual.
For more stories about the state Department of revenue breach, go to postandcourier.com/hacked.
“I love to be around businesses,” Haley said, “and so this is an exciting time that ... ”
She paused, then unexpectedly acknowledged the handful of reporters sprinkled around the hall, a constituency she seemed to love less.
“I, um, thank my friends in the media for joining us again. They seem to follow me everywhere I go,” she said to laughter. “But we appreciate you being here as well.”
Asked about her opening quip afterward, Haley jokingly explained that she wanted “everybody to look at you guys.”
“You should smile,” she suggested. “You should know what it’s like to be on the other side of the camera.”
The comments at Wild Dunes last week provide a window into Haley’s mind as she tries to craft her message while grappling with what could be her biggest crisis, a computer hack into one of her agencies, the S.C. Department of Revenue, that has compromised millions of tax returns submitted by individuals and businesses.
How the crisis unfolds in the coming months will shape her prospects for a second term.
How Haley’s doing?
Haley’s response to the hack has been a mixed bag.
She has faced criticism for waiting more than two weeks to reveal that the state had been hacked, but said that was dictated by law enforcement.
Her administration arranged credit-monitoring services for every individual and business taxpayer in the state through Experian and Dun & Bradstreet, but many have struggled to sign up for those services and questioned their effectiveness, especially over the long term.
She has provided daily updates on the extent of the hack and the state’s response to it, but has blamed the media for its efforts to keep South Carolinians up-to-date and informed.
At times she has projected the image of a calm leader braving difficult circumstances; at other moments she has seemed out of her depth in terms of the practicalities of cyber-security.
She insisted that no one in state government could have done anything to prevent the hack, and has been prone to oversimplification. On Thursday at Wild Dunes, she was not prepared to speak in absolutes because the state still doesn’t know the whole story.
Her prevailing message — encouraging residents to sign up for the state’s prescribed protections and maintain personal vigilance — has been generally clear and appropriate.
Haley has been faulted during the first half of her term for not practicing the transparency she preached on the campaign trail, and this crisis has presented mixed evidence.
After announcing the attack on Oct. 26, Haley held press conferences the four following business days to offer updates.
She has thanked news outlets for getting the word out, but also faulted reporters for one thing or another.
On Oct. 29 Haley blamed the media for causing “somewhat of a panic” among taxpayers that led to a flood of callers overwhelming a call center set up to help people get credit monitoring.
A day later she blamed reporters themselves for tying up the phone lines and clogging the system so others couldn’t get through, even though the state’s journalists represent a miniscule percentage of the state’s population and are as jeopardized as anyone else.
Haley also said initially the state couldn’t have done anything to prevent the attack, but The Post and Courier reported on Nov. 2 that the Department of Revenue had not been using a layer of cyber-security offered by the state and used by several other agencies.
Haley also said that encryption of Social Security numbers, like the millions compromised in the Revenue Department breach, is not “industry standard.”
“A lot of banks don’t encrypt,” she said.
That statement was widely debunked by members of the banking industry and security experts.
The governor has been fairly clear, however, that the state still doesn’t know exactly whose or what information has actually been taken, so the safest thing to do is just sign up.
More victims to come?
Will the theft of millions of Social Security numbers and thousands of credit card numbers prove to be Haley’s equivalent of South Carolina’s infamous Hurricane Floyd evacuation?
Will this unexpected event frustrate and anger enough voters to harm her re-election chances, much like Gov. Jim Hodges caught flak when thousands of motorists got stuck in a 100-mile-long traffic jam trying to flee the 1999 storm?
One question that will be answered in the coming months and years is how many South Carolinians fall victim to some form of identify theft, and how many point the finger at the state’s hacking — and at Haley.
“Nobody is going to say, ‘Hey, I voted for Nikki Haley because of that data breach,’?” said Winthrop University political scientist Scott Huffmon, “but it doesn’t make an obviously compelling case to vote against her either.”
Carol Rodgers of West Ashley said recently that she voted for Haley two years ago, but shortly after the attack, she said she didn’t plan to do so again.
She was among the first to sign up for the Experian service, and shortly afterward got a call that her daughter’s debit card number was used to buy $200 worth of goods at a California Walmart.
It was the same card her daughter had used to pay her state income tax.
While Rodgers noted that the Experian service worked, she also believes the hackers already are using the information, though law enforcement officials could not confirm that.
The spotlight is expected to keep shining on the hacking incident when lawmakers return to Columbia in January and hold hearings on what went wrong.
During his campaign, Senate District 41 candidate Paul Thurmond told a West Ashley audience that it’s too early to jump to conclusions, but he did imply that Haley had not struck a proper tone.
“Leadership is about standing up and saying ... ‘Let me tell you something. That’s not going to happen again. It happened on my watch. I’m sorry, it’s not going to happen again,’” said Thurmond, a Republican who won his race. “That’s what we need, and I was disappointed in that regard. That’s what I would have liked to have seen our leader of our state say.”
Kendra Stewart, a political science professor at the College of Charleston, said she also hasn’t heard an apology, but that’s not uncommon. “Very often, politicians take that stance of, ‘Don’t accept responsibility or take blame.’ That way, down the road, you sort of protect yourself a little bit,” she said.
Partisans have been even harsher.
The state’s hacking incident would have been a far bigger deal had it not occurred in the run-up to a presidential election and as a hurricane slammed into New York, state Sen. Brad Hutto, D-Orangeburg, said.
“I’ve had a lot of just ordinary citizens call me, and this has upset them, particularly about their children,” he said. “They say, ‘My baby is just a year old. He hasn’t even tried to establish credit or anything.’”
‘Keep on giving’
Hutto noted that the Department of Revenue is an agency in the governor’s cabinet, not one overseen by Legislative appointees, and the incident could harm Haley’s ability to convince lawmakers to expand the governor’s powers.
He said lawmakers may look at the hacking incident and tell Haley, “If you can’t handle this, why would we give you more?”
“If you’re asking are there going to be political consequences to this, I think the answer is definitely yes,” he said. “To what extent, I don’t think we know yet ... (but) this is a story that is likely to last into the next campaign. It’s a story that may keep on giving.”
Every incumbent to some extent runs on his or her record of what they have done in office, the good and the bad.
In 1999, thousands of South Carolinians evacuating from the coast seethed as they sat parked on Interstate 26 westbound, while the eastbound lanes were empty.
Many pointed the finger at Hodges for calling for an evacuation, but not doing enough to ensure it went smoothly.
‘Benefit of time’
As Hurricane Floyd largely veered north of Charleston, the stories of those stuck in traffic were often more grim than the stories of those who stayed put.
During his re-election campaign, Hodges acknowledged that was one of the biggest mistakes of his administration, but he also pointed to a new traffic plan to reverse interstate lanes during the next big storm to prevent it from happening again. Still, he lost to Republican Mark Sanford.
In the coming months, Haley must work to solve the problem, protect those harmed, and find and punish the culprits, said Larry Sabato, director of the University of Virginia’s Center for Politics.
Sabato also cautioned against drawing an analogy between the botched Floyd evacuation and the state’s hacking.
“Every race is different,” he said. “Haley has the benefit of time to solve the problem. An incumbent is in charge, and gets credit for both effort and delivery.”
And Haley’s fresh friction with the state’s media not only won’t hurt — she made clear during her first run that dealing with the press was what she enjoyed least — but it also could help, at least among her base.
Huffmon said the crux of Haley’s story — the female child of immigrants rising to power in a state dominated by white males — portrays her as an underdog. “Casting herself as the victim of an unfair press plays right into that,” he said.
However, Huffmon also said cultivating a better relationship with the press can give the governor a fuller hearing. “Cultivating a relationship with the press that is not marked by personal animus and professional enmity can be a useful governing tool,” he said. “Sometimes, discretion is the better part of valor when picking your fights.”
But any friction with South Carolina’s media hasn’t dimmed her profile beyond the state. This week, Time magazine included her color portrait along with 12 other nationally prominent Democrats and Republicans in its “Class of 2016: Political Leaders to Watch.”
Two years is long time
Haley, a Republican, has not even announced that she will run again, and no one else has thrown their hat into the ring either. That’s all expected to happen next year.
Haley spokesman Rob Godfrey said the 2014 election is the furthest thing from the governor’s mind at this point.
“Her focus is on getting to the bottom of the international hacking case, making sure citizens are as protected as possible, and preventing it from happening again,” he said.
“As with job creation, government reform and so many other vital issues, Governor Haley has always believed that the politics will take care of itself if she continues to work hard and get results for the people of our state,” Godfrey said.
A likely rival, state Sen. Vincent Sheheen, who ran against Haley two years ago and lost by a 51-47 ratio, has criticized Haley for the 16-day delay in announcing the hacking.
“State leaders have a responsibility to inform the public of news like this in a timely manner,” he said. “Whether it’s good news or bad news, like this, the public deserves to know.”
“I often refrain from criticizing the administration, but enough is enough,” he added.
Who’s paying attention?
Huffmon said Haley could face a bigger problem if other problems emerge on top of the hacking that paint a picture of repeated failures of oversight or not notifying the public.
“But you can’t make those assumptions from this case alone,” he said. “The truth is, it’s unclear to the average person at what point she should have been aware of this and what she should have done immediately.”
It’s unclear exactly how many voters are paying attention. Fewer than 25 percent of the 3.8 million residents whose Society Security numbers were hacked have signed up for the state’s protection program.
“In the absence of clear, memorable story line, it’s tough for anything positive or negative two years out to have an impact on the race,” Huffmon said. “A lot depends on if, between now and 2014, we have continual stories of people struggling with identity theft as a result of this.”
Reach Brendan Kearney at 937-5906. Reach Robert Behre at 937-5771.