Sanford-Haley advisor denies critique of state's economy

A couple of old adages come to mind here. One is that a kicked dog barks. The other is that figures lie and liars figure.

I think the average South Carolinian feels the truth as it's described in an economic report issued by TD Economics recently, which says that our state lawmakers' budget decisions over recent years contribute to our inability to rebound after the recent recession.

Ordinary South Carolinians -- members of the hard-working class -- would likely agree that times have been hard in our state, especially hard on people who work for their living, and that any recovery being felt elsewhere in the nation is taking its sweet time getting to our neck of the woods.

So it seems a little odd to hear an old ally of former Governor Mark Sanford taking issue with this new economic analysis and defending the priorities of Sanford and his legislatures.

A recent TD Economics study, which is disputed, paints a bleak picture of South Carolina’s ability to recover to pre-recession levels anytime soon, based on a gap between the revenue the state needs to spend on services and the amount it needs to account for inflation, population growth and potential cuts in federal spending.

“South Carolina, for example, has one of the largest adjusted-revenue gaps in the country, with Georgia and Florida not too far behind,” the TD report says.

“In fact, South Carolina’s fiscal hole is so deep that even if revenues were to grow at 7 per cent a year, the state wouldn’t close its adjusted-revenue gap until 2021.”

Chad Walldorf, chairman of the South Carolina Board of Economic Advisors and budget director during Gov. Mark Sanford’s first term in office, said TD economists used “misleading” revenue data by focusing solely on the state’s general fund.

If memory serves, Walldorf is also a co-founder and former co-owner of the Sticky Fingers barbecue restaurant chain, featuring locations in Mount Pleasant, Charleston, North Charleston, Hilton Head, Columbia and Greenville, and elsewhere in Tennessee, North Carolina, Georgia and Florida, now headquartered well beyond South Carolina's borders, in Atlanta.

And he's the man tapped by Governor Nikki Haley to replace her principled nemesis, John Rainey, as chairman of the Board of Economic Advisors. This must be why Greenville-based Community Journals turned to him for a response.

Walldorf, who was asked by the Journal to read the TD report, was particularly concerned by the conclusion that South Carolina’s “real per student K-12 education funding is 24 percent below 2008 levels,” which TD said was the largest cut in the nation and will take time to restore.

That, Walldorf said, “is just not true. Per pupil spending has consistently gone up, whereas the report states the opposite.”

In fact, he said, spending was $10,566 in 2008 and “every year it has been increased. In the current budget, it is $11,754 per student.”

Walldorf added that in defense of the TD economists, education funding “is just so convoluted that unless you’ve spent a lot of time looking at it and talking to people, it is going to be very difficult.”

Yes, it's very complex.

Tax revenue is collected and deposited in the General Fund, including the full revenue from the one-cent sales tax implemented by the Education Improvement Act of 1984.

The Education Finance Act of 1977 dictates by formula the amount that will be appropriated from state funds annually as a "base student cost." This amount is to be transmitted to school districts, from which these districts adopt and implement their own budgets.

Additional revenue from local taxes can be added to those local budgets, and funds from the federal government are intended to be passed through the state to districts, too.

So far, so simple.

Where it gets complex is here: Conservative ideology encourages the dismantling and privatization of public schools, because wherever dollars flow, private-sector profits may be realized.

Public education, when appropriately funded, represents the largest part of any state's budget -- a pretty big pot of honey to tempt the average corporate bear.

So, to undermine public confidence in public schools, ideologues conspire to underfund them, starve them of resources, over-burden them with bureaucratic red tape and paperwork, complicate them with overbearing high-stakes testing models, strip the rights of their employees and encroach on the authority of local school boards.

At the same time, these ideologues invent and promote every sort of alternative to public education, from charters to vouchers to virtual schools, to give lawmakers optional channels through which to get public dollars into the private-profit sector.

And, as propaganda demands a skewed truth to fit this alternate universe, it must be insisted that public schools are better-funded than ever, leading the ordinary observer to the most obvious question: If we're spending all this money, why aren't we getting results?

Therefore, former Governor Mark Sanford's former advisor is absolutely correct in his complaint that education funding “is just so convoluted that unless you’ve spent a lot of time looking at it and talking to people, it is going to be very difficult.”

I bet George Orwell would understand it in an instant.

Rainey: Haley "most corrupt person to occupy the Mansion"

The immediate past chairman of South Carolina's Board of Economic Advisors, John Rainey, issued a scathing indictment of Governor Nikki Haley to a national magazine this week, declaring that Haley is "the most corrupt person to occupy the governor’s mansion since Reconstruction."

Rainey is no lightweight; he is "a longtime Republican fundraiser and power broker who chaired the state’s Board of Economic Advisers for eight years," writes Corey Hutchins in the June 15 edition of The Nation, in a blistering article titled "Nikki Haley's Pay-to-Play Politics."

A 69-year-old attorney, Rainey is an aristocratic iconoclast who never bought the Haley myth. “I do not know of any person who ran for governor in my lifetime with as many charges against him or her as she has had that went unanswered,” he told me on a recent afternoon at his sprawling horse farm outside the small town of Camden. “The Democrats got Alvin Greene; we got Nikki Haley. Because nobody bothered to check these guys out.”

Hutchins's report examines the balance between Haley, the rising star in national party politics, and what Hutchins calls "a series of land mines -- IRS disputes, questionable business deals and appointments, multiple adultery allegations -- any one of which threatens to blow up her political career."

Haley's profile in The Nation isn't the first to examine her, but it may be the most cutting to date. Hutchens seems to leave no scandal unturned. He begins with a general overview of alleged cronyism:

When Haley took office in January, her backbencher status gave her no support structure in state government. Since then she’s appointed a surprising number of cronies and loyalists to bureaucratic functions in order to construct such a network. Many state boards have staggered terms to prevent unilateral decimation of institutional knowledge, but because former Governor Mark Sanford left so many appointees in place when their terms expired, there was a glut of personnel for Haley to dispense with as she pleased. At an early stage in the bloodbath, the capital city daily newspaper, the State, pointed out that of the fifty-nine she had already replaced, twenty-six were donors to her campaign.

Such wholesale housecleaning was not only sharply at variance with what the last GOP governor had done when taking over from a member of the same party; it also reeked of the kind of favor trading Haley had run against on the stump.

And he gets quickly to the decision to oust Darla Moore from the USC Board of Trustees, and the way it was done.

In March, without announcing it, Haley quietly excised the most generous benefactor of the University of South Carolina, billionaire financier and philanthropist Darla Moore, from the school’s board of trustees, replacing her with a campaign contributor and little-known lawyer from Haley’s district. When the alternative weekly Free Times broke the news of the move -- which led to student protests and a broader public backlash -- Haley was deceptive about her reasons for having made the change.

Haley’s office initially said she had wanted a “fresh set of eyes” on the board; Haley later told Washington Post columnist Kathleen Parker that she’d ousted Moore—who’d given $70 million to the university whose business school bears her name—for not returning Haley’s phone calls and postponing a meeting. E-mails and correspondence from Haley’s office, later made public, revealed, however, that Haley had chosen Moore’s replacement a month before trying to meet with her.

Hutchens notes that Haley's choice of Chad Waldorf to succeed Rainey as chairman of the state Board of Economic Advisors carries its own hint of backroom dealing:

To chair the state’s revenue-projecting Board of Economic Advisors -- one of the highest positions in state government that doesn’t require Senate confirmation -- Haley appointed Chad Waldorf, co-founder of a barbecue chain called Sticky Fingers. Waldorf also happens to be co-founder of a group that paid for a $400,000 pro-Haley ad buy during her gubernatorial primary campaign; the ads were pulled off the air by a judge who said the group appeared to have improperly coordinated with her campaign.

Meanwhile, after Haley lifted a hiring freeze set by Sanford, the Department of Parks, Recreation and Tourism created a job for the wife of Haley’s chief of staff, Tim Pearson. Pearson, who is being paid $125,000 -- $27,000 more than the man who held the post in Sanford’s office -- is a former Sanford aide who managed Haley’s campaign.

And in case anyone was wondering about the passion that Haley has shown in defending Boeing Corporation against a complaint by the National Labor Relations Board, Hutchens connects some dots:

Haley has ended up on Think Progress’s list of pay-to-play governors who solicited money to fund inaugural parties from corporations with vested state interests. One of them was Boeing, which last year moved an expansion from unionized Washington State to South Carolina, a right-to-work state, which earned the airline manufacturer a lawsuit (still pending) from the National Labor Relations Board. Haley has lately made national news by asking the GOP presidential candidates to stick up for Boeing.

And Hutchens uncovers a new issue that is fraught with ethical questions, this one around Haley's hiring of 32-year-old Christian Soura of Pennsylvania to help develop the "Department of Administration" she is pushing the legislature to establish. Soura is paid only one dollar year by the Haley administration, but there's a twist:

A bill currently moving through the state legislature would make the department a cabinet agency under the governor, allowing a governor-appointed director to oversee much of state administration.
...
While the dollar-a-year arrangement gives Soura access to state government, he’ll draw his real compensation from a newly created think tank, the South Carolina Center for Transforming Government, which doesn’t have to disclose its funding.

The murky nature of Soura’s presence has caused headaches for the new state treasurer, Republican Curtis Loftis. Loftis accuses Soura of undermining his authority, violating established protocols and circumventing the treasurer’s office by contacting services that determine the state’s credit rating behind Loftis’s back. “We don’t have any knowledge of who’s paying him or what his motives are,” a frustrated Loftis said recently. “We have an unknown dollar-a-year man.”

The article reviews the allegations made by two men who claimed to have had inappropriate relationships with Haley during her legislative career, and the questions swirling around her previous employment as a fundraiser for the Lexington Regional Medical Center, all of which can be read here for yourself.

But what seems to capture Hutchens's, and his sources', attention is Haley's political intentions. "Haley seems to be angling for a spot on a national ticket," he writes. At age 39, he notes, "She is already penning her memoir."

“Every governor we’ve had since Carroll Campbell has had national aspirations, but with her it’s more naked and obvious,” says Brad Warthen, a Columbia advertising man who until 2009 was the longtime editorial page editor of the State. Warthen endorsed Haley in two legislative elections and chronicled her rise beginning about seven years ago. In that time, he says, she has morphed from a naïve newcomer, to a politician he thought could become a good force in the legislature, to something approaching megalomania.

“I think she’s had her head turned by discovering where demagoguery will get you,” Warthen told me. “I don’t think that’s totally who she was before. I think she has developed in this direction. It’s a B.F. Skinner behavioral reinforcement thing; she has been rewarded and rewarded and rewarded. This has worked for her. And she continues to charm the national media. Because you know what? They don’t care. It’s just a story.”

But the story that’s been told nationally has a different tint in Dixie, one that belies any claim that white voters in South Carolina, which is nearly one-third black, have cast aside hang-ups over race by electing Haley. During her campaign, she embraced the most conservative ideas right down the line: laissez-faire capitalism, hostility to social programs and labor unions, cutting taxes, starving government.

“Nikki Haley could have been perceived as a black person in South Carolina because of her skin color and her eyes and so on, but she’s gone out of her way to say indirectly, ‘I’m not black, I’m white. I dress white, I talk white, I have white friends, I have white ideology,’” says John Crangle, a retired lawyer and political science professor who has run the state chapter of Common Cause for twenty-five years. “The subtext of everything she says is that we need to do less for black people in South Carolina, and that appeals to your traditional white Southerners -- the same people who voted for Nixon and the same people who are the base of the Republican Party now. But it also appeals to all these retirees that come in because they don’t want to pay taxes.” In the Palmetto State, it seems, an antigovernment stance that by default is anti-black still plays well at the polls -- especially when peddled by a minority politician.

Undergirding the trajectory of Haley's rise, Hutchens seems to suggest, is an overweening sense of hubris, a mixture of pride and arrogance that has come from the positive reinforcement Warthen mentioned and that seems to presage nothing but success in her future, at least in her own mind.

Hutchens concludes:

In late April, at a stop in Florence, during a series of speeches Haley was giving to commemorate her first 100 days, she told the small crowd, “There really are no mistakes we have made.” It was an astonishing claim, given the nearly daily reports of infidelity, dishonesty, conservative cronyism and pay-to-play politics. But the people of South Carolina are beginning to realize they’ve been duped. The question is whether the rest of the nation will get that same privilege.