Nikki Haley: South Carolina's New Political Star

Nikki Haley didn't merely survive a nasty primary that was dirty even by South Carolina standards. It may have made her impossible to beat

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Jason Arthurs for TIME

Rep. Nikki Haley is introduced to supporters at the Capital City Club in Columbia, S.C.

Only in South Carolina, the unmatched mud pit of Republican politics, can unproven accusations of extramarital affairs made by two different men boost a woman's standing in the polls. But that's how it has gone for Nikki Haley, who rode voter anger to a commanding victory over three more-established rivals in the slime-stained gubernatorial primary on June 8. "We said no to the dark side of politics," she declared to cheers at a victory rally on election night. "We saw us push against the Establishment."

For weeks, Haley has stood in the center of a Palmetto State mudslinging circus wilder than any in memory, refusing demands that she take a lie-detector test, declining requests for her phone and e-mail records showing contacts with her accusers and calmly dismissing a racial slur hurled by one of her longtime political opponents. In the end, a steady bearing amid the rising insanity reinforced her reformist message: she was the one who would fight the old-boy political networks and channel voters' fury with dysfunctional government. Riding that wave of economic insecurity, lost faith and populist fervor, she has now positioned herself as the heir apparent to the state's scandal-scarred governor, one of her political mentors Mark Sanford.

Dirty politics has a rich history in South Carolina, where trickery is regularly embraced as innovation, libelous falsehoods are spread through anonymous leaflets, and even straw polls can end in bonfires. It's a culture that dates back to at least 1980, when local political consultant Lee Atwater leaked word that a rival who once suffered from depression got "hooked up to jumper cables" in college. Politics, explained Terry Sullivan, one of Mitt Romney's local aides, "is a little different here. It's kind of a knife fight."

But this time, all the blade work backfired, sidelining Haley's better-known rivals in the final days of the campaign and enhancing her outsider message. She denied the extramarital trysts categorically, but the press could not get enough of the story. Each of her opponents denied any role in spreading the rumors, and one of them, Lieutenant Governor André Bauer, even took a polygraph to prove his innocence after one of his former campaign employees, a lobbyist named Larry Marchant Jr., claimed to have had an after-hours hotel liaison with Haley at a 2008 conference in Salt Lake City. In a stroke Atwater would have admired, Bauer then turned around and issued a public demand for Haley to take a polygraph proving her fidelity.

As if the sexual intrigue were not enough, five days before the polls opened, state senator John M. "Jake" Knotts Jr. declared that "we already got one raghead in the White House. We don't need another in the governor's mansion" — a clumsy reference to Haley's heritage as the daughter of Indian immigrants. Knotts later apologized, saying he only meant "raghead" as a joke. Haley was up about 10 points when the infidelity claims broke two weeks before the election. She won by 27, after the largest nonpresidential primary turnout in more than a decade.

In some ways, the 38-year-old mother of two was well prepared for the onslaught. An accounting major who long worked in her family's high-end women's-clothing business, Haley entered politics in 2004 by challenging one of the state's most entrenched pols, a 30-year Republican state congressman named Larry Koon. The campaign was, predictably, ugly. A newspaper ad for Koon used Haley's birth name, Nimrata N. Randhawa, and claimed she was not a "REAL Republican." Unsigned e-mails claimed she was a Buddhist, and passing drivers shouted things about Hindu cow worship at her volunteers. (Born to Sikh parents, Haley is a practicing Methodist.) "That was the election that showed me the goodness of people," Haley told TIME, just hours after her victory speech in Columbia.

In the statehouse, Haley established herself as a Sanford ally, joining in ideological battles over spending and taxation. In a culture that prizes secrecy, she pushed for mandating recorded votes on all legislation. But most of all, she ran as a reformer who wants to change the state's inbred politics and fight the policies of President Obama. With unemployment high and the economy teetering, there were clear signs that the electorate was losing patience. Katon Dawson, the former chairman of the state party, noticed the shift in the final weeks at his local dry cleaners in Columbia, where the two women behind the counter said that they would switch their vote to Haley. "They just thought people were picking on her, and it wasn't anybody's business anyway," says Dawson, who did not endorse any candidate.

Haley courted the state's disparate Tea Party groups, earned the endorsement of Sarah Palin and enjoyed vocal support from Sanford's ex-wife Jenny after the claims of infidelity surfaced. She drilled deep into voter rage about the way politics is practiced, a strategy her rivals now seek to emulate. "People are angry, and they are irrational," explains Warren Tompkins, a consultant for Representative J. Gresham Barrett, who finished a distant second in the primary and will face Haley in the June 22 runoff. "They are voting on emotion and not anything else."