Sen. Harkin seeks formal probe into SC Gov. Haley's use of healthcare grant

Sen. Tom Harkin (D-Iowa) is seeking a federal investigation into charges that South Carolina Gov. Nikki Haley misused a grant provided under the healthcare reform law.

South Carolina accepted a $1 million grant to plan for an insurance exchange — a central component of the healthcare law. But Haley told state officials they should use the grant to find a way not to establish an exchange, according to a report last week in a South Carolina newspaper.

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Harkin, chairman of the Senate's Health Committee, on Thursday asked the inspector general in the Health and Human Services Department to investigate whether the Haley administration misused its grant and should repay the federal government.

"Spending taxpayer funds to construct an ideologically-motivated façade not only violates Congress’s intent, but also the public’s trust in government," Harkin wrote.

According to the Charleston Post and Courier, Haley said "the whole point" of studying an exchange, using the $1 million grant, was to find a way out — "NOT to create a state exchange."

HHS has the authority to set up a federally run exchange in states that don't establish their own. But some Republican governors have refused to implement President Obama's healthcare law, even though the alternative is greater federal involvement in their states.