A Conservative's Crusade Against Governor Nikki Haley

 Citizen Rainey

John Rainey has made some enemies in Columbia by calling Nikki Haley “the most corrupt person to occupy the Governor’s Mansion since Reconstruction."  Photo: Sean Rayford

From the Charleston City Paper

By Corey Hutchins

John Rainey is wearing a coat and tie as he slowly strides across the grass of his 17-acre estate — called Fox Watch Farm — just outside the small South Carolina town of Camden. Two big German Shepherds follow him through an English garden that surorunds a gazebo near a horse barn. Rainey, who turned 70 last month, is a tall man. For years, he has loomed large in S.C. Republican spheres of influence; he is responsible for recruiting Mark Sanford to run for governor in 2002. But lately, the longtime Republican fundraiser and powerbroker has caught attention in certain circles for something else: his one-man mission to discredit the state's new governor, Sanford's hand-picked successor, Nikki Haley.

When Rainey speaks, he does so deliberately. An attorney by trade, he makes sure his words are characterized correctly. He is not fast and loose with facts. If he doesn't know something, he'll tell you. If he doesn't want to discuss something, he'll make it known quickly.

When it comes to the immediate subject, the reason this reporter has come out to Fox Watch Farm to see him, he is clear about the motive of his most recent endeavor. He wants the people of South Carolina to know that they have elected a fraud.

"As I've said before, I believe Gov. Haley is the most corrupt person to occupy the Governor's Mansion since Reconstruction," he says. "Put it another way: I think she is corrupt to the core of her being."

Rainey's words have weight. He is not some yahoo. Indeed, right now he is on the finance team of ex-ambassador to China and former Utah Gov. Jon Huntsman, who is running for the Republican nomination for president. For eight years, Rainey chaired the state's Board of Economic Advisors under Sanford. Before that, in the '90s, he helmed the South Carolina's public utility, Santee Cooper, and navigated it out of one of the largest corporate scandals in the state. He and Sanford still keep in touch.

Rainey's private investigations have culminated in a high-profile lawsuit against Haley that he filed last month. The lawsuit asks the Richland County Court of Common Pleas to decide whether Haley broke any laws either by soliciting funds from lobbyists as a fundraiser for Lexington Medical Center or by doing secret consulting work for engineering firm Wilbur Smith Associates. Both occurred during the time she represented Lexington County in the S.C. House prior to becoming governor, and both entities had business before the legislature at the time. He also believes Haley's election points to a fault line in American politics where candidates aren't seriously vetted and nominees aren't challenged by their own party.

It's why he's a Huntsman guy, he says. He knows that someone who has undergone as many background checks as the former ambassador makes for a candidate with no surprises.

At the current political moment, you might think Rainey's work for Huntsman would put a muzzle on the man. But he is long past having consideration for such things. He is trying to expose Haley, a fellow Republican, for the betterment of the Grand Old Party, he declares — not in spite of it. Besides, he says, before he's a Republican, he is a South Carolinian and an American.

"This is my civic duty," he says, "to call out people who I don't believe represent South Carolina in a manner in which we want to be known and remembered."

Right now that person is Nikki Haley.

From here at Fox Watch Farm, Rainey has been launching a series of private investigations into the sitting Republican governor for more than a year. Last September, before she was elected, Rainey authored a much-publicized letter to President Barack Obama's U.S. attorney in South Carolina, Bill Nettles, with an opinion that Haley might have violated the federal Hobbs Act. The law prohibits public officials from receiving money "under the color of official right." The letter was in response to news that Haley had taken $42,500 in consulting income from the engineering firm Wilbur Smith and a $110,000 salary as a fundraiser from Lexington Medical Center, despite her inexperience in either sector. Both entities also had business before the Legislature at the time.

Rainey has done a lot of research on Haley's tenure at the hospital, research responsible for the news that the governor may have lied on her job application by claiming that in 2007 she'd made $125,000 at her family's Lexington clothing business Exotica International. Haley told the IRS she only made $22,000 that year. When questioned about the discrepancy, Haley told reporters that she didn't fill out that particular part of the application and doesn't know who did. The hospital says no one on its end filled it out. After nearly a year of Freedom of Information Act requests, Rainey finally received a reply from the hospital stating that the entire application was sent in one seamless transmission.

Whether that closes the door on that specific case is still up in the air.

"Proof is a legal word, and I don't think you achieve proof except when you have a judicial determination," Rainey says about it. "The question is: Do the people of South Carolina believe that she lied? And if they do believe, do they care? I don't know the answer to those questions. I firmly believe she filled out that entire application. Responses I got back under FOIA is that it was a one-click transmission, which I have been told that one-click means that it came from one single computer in one seamless transmission. So if you sent the first two pages, you sent the last five pages. As I understand it, the governor says that the first two pages are hers but the last five pages she's never seen before. So I think the people of South Carolina have to make their own determination."

At the heart of Rainey's problem with the governor is that he believes she lacks integrity.

"I'm not addressing the issue of competency or incompetency as governor," he says. "I am addressing the issue of integrity of the governor — or lack thereof. Nobody would doubt the competence of former president Richard Nixon. He opened the door to China. He started the EPA. He started the War on Cancer. He was very effective in so many ways, but I don't think anybody would accuse him of having integrity based on all we know, all the tapes, all that's come out, and his resignation. So we're talking about two different issues, and I don't want those issues conflated ... I relied heavily on one of the definitions of corruption, which is lacking integrity. And then if you go to 'integrity' in the dictionary, you find the word 'honesty.' The overarching question is, is Governor Haley a person of integrity?"

When you ask people close to him what they think of what Rainey's been doing, one answer is generally constant: He has the means and the time do it, and he won't stop until he thinks he's done.

All of it, however, has come at a personal cost. "My phone doesn't ring as often as it used to," Rainey says. "I don't get calls from some of the people I used to get calls from. But I understand that." Rainey's campaign has made him a pariah in some circles, but he remains undeterred.

"Look," he says, "I am first and foremost a citizen of South Carolina. I feel I have, in my position, a civic duty. I have been very privileged in my life to have had the opportunities I have had, both in and outside of government. I have access to the press ... I have credibility, at least in some circles. There are some people who listen to me. They know I'm not a gadfly. They know I do my homework. And I don't want anything. I don't get anything from the government."

The Story of Caesar's Wife

Sitting in his gazebo, an open manilla folder with notes from a meeting he once had with Haley in front of him, and two donkeys in a pen baying in the background, Rainey sketches out the story of how he first became interested in the woman who would become the state's first female and ethnic minority governor.

During the 2010 campaign, despite his background in politics, Rainey had never heard of the third-term Lexington representative named Nikki Haley who was running for the state's highest office.

So he hadn't put too much thought into Haley's candidacy, until a $400,000 TV ad that had been paid for by a pro-Sanford group blanketed the airwaves. (A judge later ordered it off the air, ruling that the group could promote issues but not candidates.) When Sarah Palin endorsed Haley on the Statehouse steps, Rainey knew the race was over.

Normally accustomed to at least knowing the nominee of the party he'd helped raise millions for throughout the years, Rainey cast a net to find someone who could clue him in on who she was. It came back empty.

It was around that time, near the end of June 2010, that then-state GOP chair Karen Floyd called to say Haley would like to meet him. Rainey invited them out to the farm and they sat in his cottage, which is near the wood line across from the main house. He had a list of questions for the party's nominee and he started by asking if she'd been seriously vetted.

Haley told him she'd had a background check that included her and members of her family and that had cost about $30,000. He asked if there was anything in her background that might cause a problem. Haley said no.

"You understand that you've got to have an absolutely impeccable record if you're going to run for governor," Rainey recalls telling her. "I asked Mrs. Haley, I said, 'Do you know the story of Caesar's wife?' She said no. I said, 'Let me tell it to you.' Not many people know the story of being purer than Caesar's wife." The story goes like this:

In ancient Rome, around 60 B.C., Julius Caesar was married to a woman named Pompeia who had been accused of corrupting a sacred ceremony in their home. Caesar found out and wanted a divorce. Pompeia, however, denied that she'd done it, and at trial it turned out that a political opponent of Caesar's had set up the allegation and lied — she hadn't corrupted any ceremony. Caesar, however, divorced her anyway, apparently wanting a wife free from any speculation.

It was after telling that story in the cottage that Rainey questioned Haley about the $42,500 she'd received from Wilbur Smith. According to Rainey, Haley balked.

"My impression of Mrs. Haley was that she was nervous — her eyes telegraphed that to me and her body language. She was ready to leave," Rainey says. "I was not impressed with her in general, and I felt like she was nervous and she was evasive."

It was about then that Haley's driver came in to say it was time to go.

Not long after, Rainey received a letter from Haley thanking him for the meeting. "I will work hard to earn your support and make you proud," it read at the end.

So far she's done neither.

"I had chaired Santee Cooper for 10 years. I was chairman during Operation Lost Trust at the state level and we dealt with the coal scandal at Santee Cooper in that same environment," he says. "So I had seen the face of corruption. I had looked corruption in the eye. My concern was that maybe I was seeing this movie again when I saw Wilbur Smith. I didn't know. I still don't know. It may be perfectly legitimate, everything may be on the total up and up. The only way we're going to find out is if the governor comes forward and explains what she did or didn't do for Wilbur Smith [and] how the relationship was established."

The Only Free Man

John Rainey's home outside Camden looks like a well lived-in museum even though he moved there from Columbia just five years ago. He has an office in Anderson and another in Greenville. He and his wife often travel to Colorado to a vacation home they keep in the Vail Valley.

"I move around," he says.

About his dealings with Haley, he has been described by his friends as the only free man in South Carolina.

"Obviously that's hyperbole. There are plenty of free people in the state, but I am a person of some prominence in political and social and economic circles who can speak my mind without fear of any kind of adverse consequences to me or any business that I am associated with," he says about it. "That gives me a special opportunity and an unusual burden, because having that opportunity, I am burdened with the responsibility of using it for the good of the state. And I've tried to do that. The Republican Party is not first in my life. It's just not. One thing wrong with partisan politics today is a candidate gets the nomination and people fall in lockstep behind the candidate regardless of the qualifications of the candidate."

It all comes down to what Rainey describes as a fault line in American politics.

"Here's what I heard after the primary: Well, she's the party's nominee," he says of Haley's election and why certain people might have asked him to back off. "Well, that doesn't do anything for me. The question is, is that the person we want to be governor? And it comes back to all these unanswered questions. Why wouldn't the party demand they be answered? You want to fight under our banner? Show you're worthy. It's on both sides. Same thing with Alvin Greene. The Democrats got Alvin Greene, we got Gov. Haley for the same reason. There's a fault line through the two-party system, and it's just as deep and just as wide in both parties. It just is. We don't vet our candidates."

If the party won't do it and the public won't do it and the media won't do it, then perhaps it'll be up to people like Rainey. And to him it comes down to one simple thing.

"People as privileged as John Rainey, with the bully pulpits I have had and still have, need to say what needs to be said and do what needs to be done and put country and state above party regardless of the consequences," he says. "Somebody has to carry that message. Not everybody is as privileged as I am to be able to carry that message because their livelihood's involved, their relationships are involved. That's my burden and my privilege. That's all I can tell you."