S.C. Gov. Nikki Haley’s choice to represent the Palmetto State’s newly drawn seventh congressional district is a “person of interest” in an ongoing U.S. Department of Justice (USDOJ)/ Internal Revenue Service (IRS) investigation.

Horry County, S.C. council chairman Tom Rice – who won the GOP nomination for the seventh district earlier this year – is reportedly being investigated for his role in the “Coastal Kickback,” a brazen pay-to-play scam in which hundreds of thousands of dollars in campaign cash was funneled through a fabricated network of corporations to select politicians in exchange for their support of a local tax hike.

And trust us … that juicy description just scratches the surface of this racket, which was reportedly run by a corrupt cabal of local tourism leaders known as the “Myrtle Beach Mafia.”

Rumors of Rice’s proximity to the federal probe have been circulating for months, but until this weekend FITS hadn’t spoken with anyone close enough to the investigation to confirm or deny them.

Now, however, two sources who have been questioned repeatedly by federal agents as part of this ongoing probe have confirmed to FITS that they were asked directly about Rice’s involvement in the operation.  Meanwhile, we’ve spoken with a source in the USDOJ in Washington, D.C. who has confirmed that Rice’s alleged role in the scam is being closely examined – particularly as it relates to his rumored involvement on the front end of the operation  (i.e. conceptualizing the scheme).

Clearly that’s much more troubling than if Rice were being investigated for “unwittingly” doling out checks on the back end of the scam.

Will Rice be among those indicted (assuming this two-year-old investigation ever produces anything)?

That remains to be seen.  We’ve spoken with several state (and national) Republican officials who say they are bracing for the worst – but none of them believe that Rice will be indicted in connection with the scandal.

“He may get a black eye for his proximity to all of this, for being close with people who go down, but that’ll be it,” one national Republican strategist told FITS.

Rice did not return calls seeking to comment.  Previously, however, he has not only denied any connection to the “Myrtle Beach Mafia” – he’s claimed such a cabal doesn’t exist.

“As far as I know, there’s no such thing as the ‘Myrtle Beach Mafia.’ I’ve never heard anything like that,” Rice told earlier this year.

Aided by Haley’s controversial endorsement, Rice bested former S.C. Lt. Gov. Andre Bauer in the GOP runoff for the seventh district nod.  He faces Democrat Gloria Bromell Tinubu in November.

In addition to his rumored proximity to the “Coastal Kickback,” Rice – a fiscal liberal/ crony capitalist of the first order – is facing criticism over his support of a government-run “economic development” deal that would expose Horry County taxpayers to significant financial risk.  In fact this deal – codenamed “Project Blue” – was ripped earlier this week by the editorial board of The (Myrtle Beach, S.C.) Sun News.