U.S. senator calls for Haley inquiry

Gov. Haley, Sen. Harkin

An influential U.S. senator is calling for an investigation into whether Gov. Nikki Haley misused a federal health care reform grant by dictating the recommendations of an independent panel that used the funds.

Sen. Tom Harkin, an Iowa Democrat, cited a Dec. 14 report in The Post and Courier in his letter Thursday to the inspector general of the U.S. Department of Health and Human Services. In it, Harkin questioned whether the Haley administration "made improper use of taxpayer funds" and "whether that grant should be returned to the federal government in full."

The governor's office dismissed Harkin's request as "a joke."

The newspaper reported this month that Haley ordered a health panel's findings in March, before the group met for the first time. The 12-member group is nonpartisan but dominated by Haley appointees.

The Health Planning Committee's eventual report mirrored Haley's directive in a March email that "the whole point of this commission should be to figure out how to opt out and how to avoid a federal takeover, NOT create a state exchange."

A central part of the federal health care overhaul, insurance exchanges are the state- or federally-established marketplaces where health coverage will be sold to individuals and small-business employees beginning in 2014.

States that decline to set up their own exchanges are subject to federally run ones.

South Carolina received a $1 million exchange planning grant to study whether the state should have a federal or a state exchange. The administration used about $109,000 of the grant through the end of November, according to the most recent progress reports filed with the federal government.

"It was certainly not the intent for those taxpayer funds to be distributed for a predetermined and meaningless outcome," wrote Harkin, who is chairman of the Senate's Health, Education, Labor & Pensions Committee. "Spending taxpayer funds to construct an ideologically motivated faèade not only violates Congress's intent, but also the public's trust in government."

In a statement Thursday, Haley spokesman Rob Godfrey, dismissed Harkin's request, saying the administration is "glad that the committee independently concluded that these exchanges should be rejected."

The panel rejected the idea of a state-run exchange, saying South Carolina has few incentives to be a "first-mover" nationally. Instead, it would "encourage and facilitate ... private exchanges," the report said.

"Governor Haley has long been on record opposing Obamacare and its exchanges, and she remains committed to keeping them out of South Carolina," Godfrey said in the statement.

"I suggest the liberal senator for Iowa is better off investigating how pro-Obamacare governors are wasting tens of millions of tax dollars studying how to implement a fatally flawed and unconstitutional law that will hopefully soon be struck down by the Supreme Court. South Carolina did the right thing."

In his own statement, U.S. Sen. Lindsey Graham, a South Carolina Republican, called Harkin's request "sour grapes."

"I appreciate Governor Haley's work against Obamacare and will work with her to defend our state," Graham said in the statement. "We will meet them head-on. … South Carolina was right to reject Obamacare and we will continue to sound the warning against this terrible program which dramatically raises health care costs and lowers quality of care."

Tony Keck, director of the S.C. Department of Health and Human Services, and a key member of the Health Planning Committee, called the request "political."

"This senator is upset that South Carolina's idea is catching on," said Keck, who was copied on Haley's March email and who wrote the committee's November report. "More and more states are putting on the brakes" in implementing the federal health care overhaul, he said.

Asked specifically to respond to South Carolina's possible misuse of the federal grant, U.S. Department of Health and Human Services spokesman Keith Maley said in a statement: "Planning grants provide states with resources to conduct the research and planning needed to build an exchange. South Carolina used these resources to develop a report. If South Carolina would rather cede its authority to the federal government, South Carolinians will be able to access a federally facilitated exchange."

Maley did not elaborate on possible misspending.

Reach Renee Dudley at 937-5550 or on Twitter @renee_dudley.

Sign up for updates!

Get the latest political news from The Post and Courier in your inbox.