Bob Mercer shares with us the new court documents in the state’s prosecution of GEAR UP player Stacy Phelps, who stands accused of falsification of evidence related to his misuse of federal grant funds intended to help American Indian students but funneled through his non-profit American Indian Institute for Innovation to buy lots of goodies for himself and friends.
Yesterday Attorney General Marty Jackley filed his “Notice of Intent to Introduce 404(b) and Res Gestae Evidence.” Per state law, prosecutors must give notice that they intend to submit evidence “proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” In this case, the evidence Jackley lists aims to show that Phelps had reason to falsify evidence and conspire with Scott Westerhuis to falsify that evidence, because he was using GEAR UP money to buy lots of steak dinners and other treats.
One of those steak dinners took place on November 4, 2011, when Phelps rang up $163 at Seattle’s El Gaucho restaurant. The Attorney General’s entry on that expense highlights the word “swanky.” If he’s taking that from El Gaucho’s own marketing lines, I’d recommend he add “ritualistic“—that would really set the jury on edge.
The single largest dining expense is a July 13, 2015, outing to Famous Dave’s which cost $645.13.
Attorney General Jackley itemizes $9,251.74 for 45 restaurant visits from October 25, 2011, to July 20, 2015. That’s an average tab of $205.59. A.G. Jackley lists eight visits to Minerva’s between November 2011 and July 2015 totaling $1,873.57, but the 404(b) notice includes another line saying that from October 2011 to September 2014, Phelps spent $7,643 of AIII money at Minerva’s.
A.G. Jackley makes a similarly muddled list under expenses at Best Buy. His filing itemizes eight expenditures at Best Buy from June 2012 to December 2014 totaling $11,430.70, then adds a total from February 29, 2012, to September 14, 2015 (three days before his alleged partner in GEAR UP crime Scott Westerhuis killed his family and himself after receiving word that the state was taking GEAR UP out of their hands) of $20,729.74.
A.G. Jackley notes $44,913.49 spent on fuel at Loaf & Jug between October 25, 2011, and December 29, 2014. He notes another $3,914.71 spent on fuel at Pilot and $1,786.56 at Shell during that period. Add that up, take a wild guess (based on my own car records) that the average gasoline price during that period was $3.60 and that the average fuel efficiency of Phelps’s vehicle was 20 miles per gallon, and that fuel corresponds to over 281,000 miles of driving over a bit more than three years, or 242 miles per day. Of course, if that money was spent on a small fleet of AIII vehicles, that mileage could be perfectly reasonable business expenses.
Therein lies the caution with which we must read A.G. Jackley’s evidence. The big ticket items—$50K for fuel, $50K+ at computer stores, $58K at Walmart, $61K at Sam’s Club—could have been normal expenses involved in running the non-profit and supplying the summer GEAR UP camp at the School of Mines for hundreds of American Indian kids. A $240 dinner at the Space Needle and $1,200 in gear at the Victorinox store in Minneapolis, probably not, but on the other items, the judge and jury will need to hear A.G. Jackley’s evidence that the listed expenses were not normal operating costs.
A.G. Jackley appears prepared to do that. He includes an e-mail exchange between Phelps and Westerhuis on February 12, 2015, that suggests intent to keep secrets from the AIII board, although the snippet provided does not discuss actual expenses. A.G. Jackley concludes his filing with this statement, saying that Phelps wasn’t as big a crook as Westerhuis, but he was a crook:
Westerhuis engaged in “wholesale embezzlement”; Phelps, “abusive spending.” Stay tuned for the next court hearing on the Phelps case on August 18.