"I'm a tough girl, I can handle that. The laughing afterwards was a kick in the gut... But, having said that, I'm not going to waste my time on that," Republican Haley said on Wednesday, two days after Democrat Vincent Sheheen allegedly used derogatory remarks against her.
In a video captured by a local daily in South Carolina, Sheheen can be heard saying, "We are going to escort the whore out the door."
The crowd burst into laughter. Sheheen quickly corrected himself.
"We're going to escort her out the door."
The crowd responded to his remarks with applause. It was his next sentence that many people took issue with.
"Oh no, listen, you gotta tell the truth. Think about it, we've got a governor who's blocking $11 billion of our own Medicaid tax money. That's our money!" Sheheen said.
He apologised on Monday.
In a radio interview, Sheheen said his words were "garbled" but the damage was done.
Ann Romney, wife of the former Republican presidential candidate, Mitt Romney, blasted Sheheen's original comment.
In an interview, she called it unacceptable.
"When I first heard about it, it hit me right in my gut. My nerve endings went haywire. It's so upsetting when you know someone can say something like that about a woman, and not have any kind of reaction. It's so unacceptable," she said.
"You get so sick of saying there is bias out there," she said, "but if a Republican had said this, it would be blowing up in their face like nobody's business."
Republican Senator Ted Cruz, in a Facebook post denounced Sheheen's comment and said this was a "personal attack" on Haley.
"You have not heard me talk about it and it's because whether it was a gaffe or not, I really don't care," Haley said on Wednesday.
"I thought that Ann Romney's comments were appropriate," she said.
"There's no place in South Carolina for comments or laughter - when it comes to things like that."
Haley, according to latest polls, is leading Sheheen by more than 15 percentage points.
Born of Sikh parents who migrated from Punjab, Haley is the first Indian-American woman governor. She is also the second Indian-American Governor after Bobby Jindal of Louisiana. Both hail from the Republican Party.
Another Indian-American Neel Keshkari from the Republican Party is seeking gubernatorial election from California.
His chances, however, are said to be slim, given that California is a strong Democratic State.
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