Haley's time fundraising for Lexington Medical Center raises questions

Nikki Haley said her job with the foundation arm of Lexington Medical Center entailed public relations work, outreach to doctors and seeking out members to join the foundation.

In 2006, Nikki Haley's finances were a mess.

The Republican gubernatorial candidate reported a family income of $40,269 on her 2006 tax returns, including her husband's money-losing business. Half that income went to pay interest on the family's $289,000 mortgage alone.

Then, the foundation arm of Lexington Medical Center, which Haley had supported in its fight to open a heart surgery center, came to the state representative's financial rescue.

By 2009, Haley was pulling down more than $100,000 at a fundraising job for the Lexington Medical Center Foundation.

That job was created expressly for Haley, the hospital says, despite a resume that included only accounting positions with a Charlotte firm, her parents' clothing company and her legislative position. Campaign spokesman Rob Godfrey said Haley had fundraising experience, but did not provide specifics, and had served on the hospital board before she was elected to the Legislature or took the foundation job.

Haley's hiring was approved only by Lexington Medical's chief executive officer, not the foundation's board.

And she was paid 63 percent more than fundraisers at similarly sized charities, according to records obtained by The State and an industry group that studies nonprofit salaries.

Those records also show that in paying Haley, Lexington Medical Center

Foundation spent seven times more in salaries and overhead than the much-larger foundation at Palmetto Health Richland. Of every $10 the Lexington foundation raised, more than $2 went to pay Haley's salary.

While Haley was at the foundation, it raised thousands of dollars from a pair of payday lending firms that Haley once oversaw on a House business subcommittee. In that legislative role, one fellow Republican once ripped Haley, saying she single-handedly had blocked efforts to regulate the payday lenders that later became large contributors to the Lexington Medical Center Foundation.

Haley has campaigned for governor, in part, by saying that voters have a right to know how their elected officials make their living.

Too often, she has said, S.C. politicians have used their public political offices to line their private bank accounts. Haley has singled out Vincent Sheheen, the Camden attorney and state senator who is her Democratic opponent, saying he should not have taken part in a lawsuit against payday lenders or represented clients before the state Workers' Compensation Commission.

But Haley's stumping for good, ethical government also has drawn criticism as hypocritical.

Haley, for example, disclosed that she was paid $42,500 by a Columbia engineering firm that does business with the state while she was a state representative.

And the Lexington Medical Center Foundation raised money from businesses, including payday lenders, that Haley regulated as a legislator.

"It's not unusual," Godfrey said. "The point of hiring someone to grow the impact and reach of a foundation is to bring new partners to the table and make sure that any industry that wanted to get involved in the South Carolina community saw (Lexington Medical Center) as a viable option.

"Nikki worked extremely hard for the foundation and is extremely proud of the foundation and her work," Godfrey said.

Sheheen and others have questioned whether Haley walks her good government talk. A top Republican fundraiser also has written a letter to the state's U.S. attorney asking him to investigate Haley's consulting work, though a former federal prosecutor said that request has no merit.

Political scientists disagree about whether the payday lending donations create an image problem for Haley.

Mike Lee, a political science and communications professor at the College of Charleston, said Haley does risk undermining her anti-establishment pitch.

"Her 'sweep out the bums' message is potentially contradicted," Lee said. But, he added, whether voters care depends on their view of Haley and who is accusing her of hypocrisy, and whether they are more likely to vote for a candidate based on a single issue -- such as reducing state spending.

But Robert Oldendick, a political scientist at the University of South Carolina, said the payday contributions don't "raise a red flag."

John Crangle, an attorney with Common Cause, agrees, saying the Lexington Medical Center Foundation payday-lending donations are not a conflict of interest because Haley did not personally profit from them. Crangle said professional relationships between lawmakers and the industries they regulate are more common in states with part-time legislatures, such as South Carolina.

"It's so indirect that I don't think it's a conflict," Crangle said. "The contribution is not directly beneficial."

'A unique opportunity'

Jennifer Wilson, spokesman for Lexington Medical Center, said hospital President and CEO Mike Biediger created the fundraising job for Haley in August 2008 because she fit the foundation's needs. Biediger hired Haley without a vote by the foundation's board, Wilson said.

Biediger "knew Nikki Haley from the community and thought it was a unique opportunity," Wilson said, "She had excellent contacts in the community, which is essential to fundraising."

At the time, the hospital was in the middle of a legislative and bureaucratic battle to win approval for an open heart surgery center. Haley and other Lexington County lawmakers voted to override a 2006 veto by Gov. Mark Sanford that would have prevented the hospital from opening the heart center. That veto was sustained. But state regulators eventually approved the heart center in June.

No votes directly related to Lexington Medical arose after Haley was hired by the hospital's foundation.

Nine months after Haley was hired, the Lexington Medical Center Foundation brought in golfer Lee Trevino to give a speech. According to foundation tax returns, two payday lenders, Spartanburg-based Advance America and Tennessee-based Check Into Cash of S.C., donated $5,000 each for the event.

As a House Labor, Commerce and Industry subcommittee chairman, Haley had overseen the long-running debate about whether to regulate payday lenders.

Payday lenders also had given to her legislative campaigns.

Check Into Cash of S.C. gave Haley's campaign $500 in 2007, according to campaign finance records, one of at least three donations totaling $1,750 that year from payday lenders.

Haley received at least four other campaign donations totaling $4,000 from payday lenders and their trade associations in 2008.

That same year, then-state Sen. John Hawkins, R-Spartanburg, blamed Haley for the failure of a bill to reform state regulation of payday lenders, saying the Lexington Republican had bottled up the reform bill in her subcommittee. Hawkins, along with Sheheen, was one of the attorneys who filed the class action lawsuit against payday lenders.

House Speaker Bobby Harrell, R-Charleston, removed Haley from the committee in late 2008 over a separate issue, before the hospital foundation received the payday-lending donations. But Haley remained active in working out a payday- lending reform bill earlier this year.

Payday lenders defend their companies' contributions to the Lexington Medical Foundation.

Advance America spokesman Jamie Fulmer said the company has 30 outlets in the Columbia area and frequently gives money to nonprofits around the state, including a Spartanburg breast cancer center. Haley did not approach the company for a donation to Lexington Medical, he added.

"As a company headquartered in South Carolina," Fulmer said, "we give to a whole host of charitable organizations around the state. There's nothing inappropriate about the donations we've made."

Check Into Cash spokesman Ryan Harris agreed.

His company is an "active corporate citizen," Harris said. "The contribution is certainly not out of order."

Lexington Medical spokesman Wilson, the daughter-in-law of Republican Congressman Joe Wilson, said neither company had donated to the hospital's foundation before.

Earning six figures

Haley declined to be interviewed for this story, but defended her hiring by the foundation in a June interview with The State.

Haley said the job entailed public relations work, outreach to doctors and seeking out members to join the foundation. But, she said, most of her time went into planning events, such as the Trevino speech, and other fundraisers.

"I would go and arrange the events and get sponsorship for the event," Haley said. "You were always looking. ... You're looking for not only new members to join your foundation but also looking for sponsors for events."

The question she always was trying to answer, Haley said, was: "What can we get donated? What do we not have to pay?"

Haley disagreed she lacked relevant experience for the fundraising job, citing her accounting degree from Clemson University.

"There's not much an accountant can't do," said Haley, who is not a certified public accountant. "Accountants are the best business people in my standpoint. We always know the value of a dollar and are always trying to grow a business."

Records show Haley was paid significantly more than other nonprofit fundraisers across the state.

Wilson said the foundation sought no advice in setting Haley's $110,000-a-year salary. However, the Lexington Medical Foundation did hire a consultant to set the salary of its top executive, Biediger, who is head of both Lexington Medical and its foundation, according to its income tax returns.

According to a salary survey conducted by the S.C. Association of Non-Profit Organizations, Haley's $110,000 salary was 63 percent higher than the highest fundraiser salary -- $67,500 -- among organizations with budgets that are similar in size to the Lexington Medical Center Foundation. The average salary for the same position among those surveyed was $44,195.

When sorted by geography, Haley's salary was 25 percent higher than the highest fundraiser at city-based organizations in the state. The average salary for nonprofits of similar geography was $45,000.

SCANPO's survey does not include all nonprofit groups across the state, but interim President Colleen Bozard said many organizations use the data as a guideline.

"It's fairly representative of what nonprofits around the state pay," Bozard said.

Amy Coward with the Palmetto Health Foundation, the foundation arm of Richland County's largest hospital, said her organization uses the SCANPO survey, as well as data from the Association of Healthcare Philanthropy.

Experts say there are no set standards for how much a nonprofit should spend on fundraising, with costs dependent on the size and age of the organization, the popularity of its cause and the skill of its staff.

Palmetto Health Foundation's target is to spend 92 percent of the money that it raises on programs, Coward said, adding nonprofits generally are considered good stewards if they spend at least 60 percent of the money that they raise on their programs

Tax records show Lexington Medical Center spent more on fundraising costs, as a percentage of its donations, than the Palmetto Heath Foundation.

That Columbia charity spent 3 percent of its $4.6 million in collections on fundraising staff in 2008, according tax records. Meanwhile, Haley's salary represented 21 percent of the $529,131 in contributions and grants that the Lexington Medical Center Foundation raised.

Fundraising salaries were 6 percent of the Palmetto Health Foundation's $6.8 million in contributions in 2007, according to tax records, while Haley alone was paid 23 percent of Lexington Medical Center Foundation's $482,435 in contributions.

Lexington Medical's Wilson said that hospital's foundation worked out a market rate for Haley's pay, adding she was compensated fairly.

Haley left the hospital foundation in April to devote more time to her gubernatorial campaign. She said in June that she was not pressured to leave.

"We were getting to the point where I knew it was going to be heated," Haley said of the GOP primary. "I knew it was time that I needed to walk away out of fairness to them and fairness to me."

Today, Haley makes only $10,400 a year plus expenses as a S.C. House member, a part-time job. Godfrey said the Haley family is living off her husband's taxpayer-paid salary with the S.C. National Guard of about $66,000 a year.

Sign up for our daily newsletter

Get the best of The Post and Courier, handpicked and delivered to your inbox every morning.


We're improving out commenting experience.

We’ve temporarily removed comments from articles while we work on a new and better commenting experience. In the meantime, subscribers are encouraged to join the conversation at our Post and Courier Subscribers group on Facebook.