It can be upsetting to see government officials, as they so often do, report vast new wealth on their annual financial disclosure forms shortly after taking a new government job. What enabled them to take in all that money just after starting a new career?
Well, we can relax as far as Nikki Haley, the United States ambassador to the United Nations, is concerned. After about a year and a half in her new post, she appears to have been handed a pay cut and has sunk deeper in debt, despite the impressive freebies that come with the new job. There is frequent speculation that she plans to run for higher office, which would mean her having to improve her financial base well before a 2020 campaign — if that is the path she takes. [An update on her financial status was published by PassBlue on Aug. 26.]
Haley, you’ll recall, was the governor of South Carolina before joining President Trump’s cabinet on Jan. 25, 2017. In preparing for her confirmation hearing before the Senate Foreign Relations Committee, which took place on Jan. 18, 2017, Haley filed a federal financial disclosure form reporting 2016 income of $203,316 for her work as South Carolina’s chief executive. She also disclosed liabilities in the range of $525,000 to $1,065,000, representing what she owed on two credit cards, a line of credit and a mortgage on her personal residence.
The United States Office of Government Ethics released her second financial disclosure form late last month, at the end of July, covering the year ending May 15, 2018, when she had held the UN post for about 16 months.
The government form does not require the disclosure of federal compensation to either Ambassador Haley or her husband, Michael Haley, a captain in the South Carolina Army National Guard. But according to the private website federalpay.org, her starting salary at the UN job for 2017 was $185,100 a year, which is $18,216 less than her pay as governor the year before; the website says the figure is based on public data it obtained from the US Office of Personnel Management.
In her 2018 disclosure, Haley lists no other new income sources or assets but says her debt climbed to a range of $1,525,000 to $2,065,000. The liabilities included borrowing on two credit cards and a line of credit as well as two mortgages. One mortgage, as was the case last year, is on a personal residence in South Carolina, while the other — for more than $1 million — is newly disclosed, apparently financing the purchase of a commercial property in Lexington, S.C. More on this purchase later.
While Haley has a mortgage on a private residence, this is not where she actually lives. As “Permanent Representative of the United States of America to the United Nations with the rank and status of Ambassador Extraordinary and Plenipotentiary,” Haley has a rent-free address in Manhattan and a staff for housekeeping and official entertainment. Even there, however, it turns out she is saving taxpayers some money.
While top US ambassadors to the UN used to live in the luxurious 42nd-floor penthouse of the Waldorf Astoria Towers, this was discontinued after the Waldorf was sold to a Chinese bank in 2014, raising security questions. Haley now lives at 50 United Nations Plaza, a high-rise building with views of the East River and located across the street from the UN. While the rent on the Waldorf digs was $135,000 a month, the UN Plaza apartment was signed at a relative bargain of $58,000 a month when it was rented to an unidentified entity (presumably the US government, which isn’t saying) in fall 2017.
About that new property in South Carolina: the ambassador’s financial disclosure form lists the purchase for “over $1 million” in July 2017 of a commercial property in Lexington, S.C., owned by IKOR Systems LLC. Among the ambassador’s liabilities is listed a mortgage of “over $1,000,000” taken out in 2017 on an unidentified investment/rental property. Further, the assets listed for Michael Haley include “IKOR Systems, LLC (owns commercial property in Lexington, SC).” The form states that the asset is valued at $1,000,001 to $5,000,000, and provides him with annual rental income of $50,001 to $100,000.
The State newspaper, based in Columbia, S.C., reported in January 2018 the 2017 sale — for $1,262,500, of 5483 Sunset Boulevard 29072 to a corporate entity named 5843 [sic] Sunset LLC, a limited-liability company whose ownership is legally shielded. It is unclear whether the address 5483 was accidentally switched to 5843 in the buyer’s name by the newspaper or by the people preparing the paperwork on the sale, but it appears that the correct name for the purchasing entity is 5483 Sunset LLC rather than 5843 because of what is at that address: the seller is identified by the newspaper as Ikor Systems LLC, and 5483 Sunset Boulevard is the address of the now-defunct women’s clothing store, Exotica International Inc., founded by Ambassador Haley’s mother, Raj Randhawa.
The Better Business Bureau website, on the other hand, lists the name of the business at that address as National Barter Co., identifies its president as Michael Haley and its vice president as Ambassador Haley, and notes that the Better Business Bureau does not accredit it. “It appears that the company is no longer in business,” the website states. Exotica International has a Facebook page, but it stopped being updated in 2010. A post on the site in December 2017 says, “It was a very good run.” (Nikki Haley, a trained accountant, often cites her bookkeeping work for her family’s business at a young age.)
How does one make sense of this series of transactions? It appears that the Haleys or the family company IKOR Systems LLC previously owned the property at 5483 Sunset, so how could the Haleys have again purchased it in 2017? More fundamentally, is IKOR the property’s buyer or the seller? (The press office of the US mission to the UN did not respond to questions from this reporter.)
If this is a building housing a company that is out of business, where would the expected rental income come from? Since this income is expected to accrue to Michael Haley, does this mean that he has rented it to another business or is he starting a new business himself? Or is this a way for the Haleys to generate cash from the property via a sale and a mortgage, whether for the benefit of the Haleys personally or for the ambassador’s parents? Stay tuned.
On another family matter, the ambassador’s financial disclosure form states that she remains a board member of a tax-exempt nonprofit charity called the Original Six Foundation. The group’s latest tax forms suggest the foundation may be reducing its fund-raising and spending, perhaps reflecting the ambassador’s new focus on New York and Washington. The foundation, which is named after the six members of her immediate family and focuses on community development and needy South Carolina schoolchildren, recently let go a number of board members and staff.
Can the ambassador rely on sales of her 2012 book, “Can’t Is Not an Option,” to revitalize the foundation or help lay the groundwork for a possible future political run? Although the book remains for sale on the foundation website and on the usual bookselling sites, she has raised “None (or less than $201)” in sales in 2016 and 2017, according to her disclosure reports.
While Haley appears to have left South Carolina politics behind her for the moment, she remains close to some of the state’s top businesspeople, who helped her raise money for past state election campaigns, according to her disclosure form. While she can’t take gifts from individuals who could benefit from her federal job, she accepted private plane travel between New York and South Carolina from three former political supporters, as well as professional basketball tickets worth nearly $20,000 from a fourth.
Smyth McKissick, chief executive officer and president of Alice Manufacturing Company, a South Carolina textile manufacturer and marketer, provided her with private air travel valued at $704.
Jimmy Gibbs, a Spartanburg philanthropist and founder and board chairman of Gibbs International, a South Carolina company involved in textiles, energy, real estate, mining and demolition, gave her $1,754 in private air travel.
Mikee Johnson, a trustee of the Original Six Foundation and chief executive and president of Cox Industries, a family-owned pressure-treated wood business, gave her $761 in private air travel. Johnson and McKissick were members of Haley’s statewide finance advisory committee as she geared up for her successful 2014 re-election bid for South Carolina governor.
Finally, Vivek Garipalli, a New Jersey health care magnate and former contributor to a South Carolina political group backing Haley, gave the ambassador four tickets valued at $19,588 to a basketball game in New York on Dec. 21, 2017, pitting the New York Knicks against the Boston Celtics. The Knicks won the game, 102 to 93.
In each of these cases, Haley’s acceptance of the gifts was “based on a personal relationship predating Ambassador Haley’s employment by the United States government, and does not relate to official duties,” the disclosure form states.
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Irwin Arieff is a veteran writer and editor with extensive experience writing about international diplomacy and food, cooking and restaurants. Before leaving daily journalism in 2007, he was a Reuters correspondent for 23 years, serving in senior posts in Washington, Paris and New York as well as at the United Nations (where he covered five of the 10 years that Sergey Lavrov spent in New York as Russia’s senior UN ambassador). Arieff also wrote restaurant reviews for The Washington Post and Washington City Paper in the 1980s and 1990s with his wife, Deborah Baldwin.