By Harriet McLeod
CHARLESTON, South Carolina (Reuters) - South Carolina lawmakers on Friday cleared Republican Governor Nikki Haley of ethics charges that accused her of illegally lobbying on behalf of her employers while a member of the legislature.
The Republican-led House of Representatives' Ethics Committee voted to dismiss the charges during a private meeting.
The decision came after the panel conducted a public hearing on Thursday in response to allegations stemming from Haley's prior work as a business development consultant for an engineering firm and a fundraiser for a hospital foundation.
In a statement on Friday, Haley praised the panel and referred to the charges as "attempts at political distraction."
"The Ethics Committee did its job thoroughly, professionally, and well," Haley said. "It's just a shame that our judicial and legislative bodies have had to waste so much of their time on phony political charges that never had any evidence behind them or any basis in fact."
Haley did the work in question while serving as a House member from 2005 to 2010, ahead of being elected as the state's first female governor two years ago on a wave of Tea Party support.
Both as a legislator and as governor, she has had a rocky relationship with fellow lawmakers, including those in her party.
The Ethics Committee first investigated the complaint lodged by South Carolina attorney and Republican fundraiser John Rainey in the spring and cleared Haley of any wrongdoing. But in late May, the panel reopened its inquiry.
South Carolina does not require its part-time legislators to disclose the sources of their income, but they are not permitted to lobby on behalf of their employers. Both of Haley's employers had business before the state.
Haley's attorney, Butch Bowers, has argued that her activities were "the norm" in the legislature. He said she supported approval for a new heart surgery facility at the Lexington Medical Center, which paid her $110,000 a year, because the hospital was in her district.
The governor was not subpoenaed to testify at the hearing on Thursday but made a late appearance before the panel to say she had done nothing wrong.
"There's a difference between a lobbyist and business development person," testified Robert Ferrell, vice president of CDM Smith, formerly known as Wilbur Smith Associates, the engineering firm that hired Haley.
If the panel had determined Haley committed an ethics violation, she could have faced a reprimand or small fine, or the case could have been referred to the state attorney general for a criminal investigation.
Haley faces a separate investigation by the state Ethics Commission on allegations she misreported gubernatorial campaign contributions by failing to collect required donor information. A formal hearing on that issue will be held on July 18.
She is not the first governor in South Carolina to face questions about ethics.
In 2009, the state Ethics Commission charged then-Governor Mark Sanford with more than three dozen violations, including using state money to fly to see his mistress in Argentina. Sanford agreed to pay $74,000 in fines to settle the ethics charges.
(Editing by Colleen Jenkins and Jackie Frank)