• Tag Archives corruption
  • Podcast #19: Lance Russell Running for Attorney General

    Senator Lance Russell speaks to Dakota Free Press, Aberdeen, SD 2017.07.12.
    Senator Lance Russell speaks to Dakota Free Press, Aberdeen, SD 2017.07.12.

    Senator Lance Russell (R-30/Hot Springs), one of South Dakota’s most conservative legislators, sat down today for a one-on-one interview with Dakota Free Press, South Dakota’s most liberal blog, to discuss his bid for the Republican nomination for attorney general.

    Two of Senator Russell’s comments stand out in the context of how he will attempt to distinguish himself in what is now a four-way race among legal pals for the Republican A.G. nomination.

    First, Senator Russell says the big criminal justice reform bill of 2013 (that year’s Senate Bill 70, Governor Daugaard’s 83-section beastie now known as the Public Safety Improvement Act) has actually made work harder for the Attorney General and all law enforcement. Senator Russell says the PSIA hasn’t saved money so much as shift costs from the state to counties, which now must warehouse more prisoners who used to go to the state pen. Senator Russell blames the statewide increase in crime, especially violent crimes, what he sees as caps on jail sentences that release drug-using convicts before they can get treatment, meaning they return to the streets sooner and commit more crimes to get their fixes. Senator Russell joined six other hard-conservative House Republicans in voting against SB 70 in 2013; he says we need to remove the presumptive probation that ties judges’ hands and results in too many offenders released from county jails too soon without treatment for drug addiction.

    Second, Senator Russell noted that the Attorney General lacks the tools to prosecute public corruption that could have allowed A.G. Marty Jackley to sniff out the EB-5 and GEAR UP corruption scandals sooner. Senator Russell supports this year’s Senate Bill 27, one of the Attorney General’s bills, which clearly defines public corruption as theft. However, Senator Russell points to a bill he offered in 2009, House Bill 1288, which he says would have gone further in helping the Attorney General tackle public corruption. That bill, proposed during the Rounds Administration before any corruption in the Rounds-approved EB-5 or GEAR UP came to light, was killed in House State Affairs.

    A programming note: my co-host for seventeen episodes of the Dakota Free Press Podcast, Spencer Dobson, is stepping away from our political podcast to focus on his other projects. Spencer provided excellent commentary and good balance to my often arcane Legislative wonkiness. Thanks for your hard work on the podcast, Spencer!

    Absent Spencer’s weekly buoyant conversations, I will focus less on producing weekly audio commentary and instead work on occasional interviews like today’s conversation with Senator Russell and my April talk with Bob Mercer, as well as audio from events like my speech to the District 22 Democratic Forum last week.

  • Mid-Central Sticks Around to Face State’s Lawsuit for $4.5 Million

    The mortally corrupt Mid-Central Educational Cooperative was supposed to dissolve last week. But at its supposedly penultimate board meeting on June 15, Mid-Central voted to authorize continuing contracts, expenditures, and board meetings, including a meeting to authorize a Fiscal Year 2018 budget at the Platte Pizza Ranch on July 13.

    So even as most Mid-Central member schools move their cooperative activities to the administration of their new Core Educational Cooperative, we’ll still have Mid-Central to kick around… and the state does intend to kick them around. On Thursday, the state sued Mid-Central and its 13* member school districts to recover $4.3 million in matching funds from the GEAR UP program. Bob Mercer gives the exact figure and additional expenses the state wants to claw back:

    The lawsuit filed Thursday in Hughes County circuit court specifically asks for $4,316,431 from Mid-Central and its member schools for projects matching requirements. GEAR UP requires a 50 percent non-federal match.

    The suit also seeks $97,544 from the cooperative and its members as compensation for: billings of $65,000 from Stacy Phelps, who was Mid-Central’s head of GEAR UP; overbilled salaries totaling $18,095; services without required personal activity reports totaling $11,325; travel expenses without Mid-Central’s approval for $1,795; and unapproved food expenses of $1,329 [Bob Mercer, “State Sues Mid-Central for $4M over GEAR UP Funding,” Rapid City Journal, 2017.07.01].

    In its June 15, 2017, minutes, Mid-Central reports an end-of-May bank balance of $915,311.44. If the state wins its $4.5-million lawsuit and claims every one of those Mid-Central pennies, the member schools will still be on the hook for almost $3.6 million. That’s 27% of the $13.3 million in state aid those 13 school districts are slated to receive this school year.

    *13 or 14? Mercer and Walker/Raposa list 14 MCEC member school districts; however, two of the listed schools, Corsica and Stickney, are consolidated in one district.

  • KCPO Promoting New Show on South Dakota Corruption: “The Nelson Verity”

    KCPO-TV occasionally airs The Facts, an ironic exercise in trying to get “facts” from a stream of right-wing wishmongers. The Sioux Falls station hasn’t posted new “Facts” online since last November. However, KCPO is advertising a new program that appears to be dedicated to South Dakota politics—The Nelson Verity:

    Ching-chings for EB-5 and GEAR UP, but what was that sound effect for the Mathew Wollmann sex scandal—Godzilla terrorizing Tokyo? An angry bull in the dog pound?

    The inclusion of disgraced legislator Wollmann’s intern boinking suggests that the Nelson in The Nelson Verity is Senator Stace Nelson (R-19/Fulton), the Republican legislator and former NCIS agent who appears to have flushed out Wollmann’s wrongdoing and set the stage for Wollmann’s outing and resignation. Every other Republican has striven to forget this embarrassment to their former golden boy, while Nelson has highlighted the Wollmann sex scandal as a symptom of the Legislature’s broader ethical failure. What other Nelson would be spotlighting this affair in a TV promo about corruption in Pierre?

    Soli Deo Gloria and LCMS logos, compared for journalistic purposes.
    Soli Deo Gloria and LCMS logos, compared for journalistic purposes.

    I don’t see Soli Deo Gloria in the Secretary of State’s corporate filings or fictitious names registry. But the swords and shield certainly reflect Stace Nelson’s military background, and that cross in the middle is the official logo of the Lutheran Church Missouri Synod, of which the church Stace attends, Zion Lutheran in Mitchell, is a member. We can only assume that the producer of the production company logo has secured permission from the executive director of LCMS communications, who, according to the LCMS Logo Usage Terms and Conditions, may make “rare exceptions” to the LCMS policy that “Private businesses may not use the logo; nor may LCMS congregational members use the logo for business or personal use.”

    Is Stace Nelson ready to boost KCPO to the top-rated TV station in Sioux Falls that doesn’t broadcast Hawaii Five-O? Will his program be more Bill O’Reilly or William F. Buckley? And could a TV talk show be a launching pad for another statewide candidacy for Nelson? Put some extra aluminum foil on your rabbit ears and see if you can pick KCPO out of the ether to find out!

    p.s.: Show’s not even on yet, and already we have to fact-check… or in this case, spell-check. It’s Merriam-Webster. And that’s a verity… er, fact.

  • Auditor General Finds Millions in Stolen or Miscounted Money at Mid-Central

    Beleageured Co-op Denies Responsibility, Exits Stage Left

    The Department of Legislative Audit has released two important documents: its audit report for the Mid-Central Educational Cooperative for Fiscal Year 2015 and its special review of the scandal-doomed Platte organization.

    I’ve just finished reading the 2015 audit. Auditor General Marty Guindon concludes that Mid-Central really, really screwed up. Mid-Central responds by saying the Auditor General is wrong, that they did nothing wrong, and that all blame falls on the dead.

    The Auditor General issues adverse opinions—translation: can’t trust them at all—on Mid-Central’s compliance with requirements in running not only the now infamous GEAR UP program but also the Teacher Quality Partnership Grants. Mid-Central gets a qualified opinion—translation: can’t trust some specific statements—on its administration of the Carol M. White Physical Education Program, the College Access Challenge Grant, and the Special Education Cluster Grant. The audit finds “management override of internal controls” took place in all of those programs. It finds errors in “allowable costs/cost principles” and “matching” in GEAR and Teacher Quality Partnership Grants. It finds flawed “subrecipient monitoring” in GEAR UP.

    The audit finds Mid-Central had no policies or procedures to identify, stop, or prevent Scott Westerhuis, Nicole Westerhuis, Stacy Phelps, Brinda Kuhn and Lance Witte (not named in the audit, but his conflictual situation is well described on p. 11) from engaging in multiple conflicts of interest that put the integrity of the co-op at risk. Kuhn, for instance, appears to have tens of thousands of dollars for work on GEAR UP and Teacher Quality without any sign that Kuhn’s work was approved by contract by the Mid-Central board.

    The auditor identifies numerous questionable costs:

    • $97,544.14 in GEAR UP salaries lacking proper documentation.
    • $4,165,185 in undocumented GEAR UP grant-matching costs (most of which consist of Microsoft software that Mid-Central claimed as its grant match but which no one interviewed says was actually used for GEAR UP).
    • $213,897.25 in Teacher Quality salaries and expenditures, most of which look like undocumented salary double-dips for Nicole Westerhuis and Stephanie Hubers and inadequately supported payments for the Phelps/Westerhuis American Indian Institute for Innovation and BC Kuhn Evaluation.
    • $1,262,131.43 in undocumented Teacher Quality grant match, money that apparently should have come from AIII, BC Kuhn, the Rural Learning Center, and Mid-Central. (Interestingly, Mid-Central appears to have squeezed more match than necessary from USD, the Region 3 educational co-op, TIE, and the PAST Foundation.)
    • $76,208 in unsupported Wakan Gli grant costs.
    • $277,874 in overstated/miscalculated indirect administrative costs to pay Mid-Central employees for work on multiple grants.
    • $7,837,967 in illegal withdrawals from Mid-Central’s checking account from January 2007 through September 2015, $1,388,630 of which remains unrestored. Back in Ocotber 2015, shortly after the Mid-Central scandal broke with the Westerhuis murder-suicide-arson, I found the evidence of a fair chunk of those illegal withdrawals in the Mid-Central monthly finance reports from June 2011 through March 2014.

    The audit documents on pp. 24–25 the discrepancies in Mid-Central’s FY 2015 annual financial report:

    Auditor General, MCEC audit FY 2015, 2017.05.19, p. 24.
    Auditor General, MCEC audit FY 2015, 2017.05.19, p. 24.
    Auditor General, MCEC audit FY 2015, 2017.05.19, p. 25.
    Auditor General, MCEC audit FY 2015, 2017.05.19, p. 25.

    In short, anyone reading Mid-Central’s financials at the end of FY2015 had no idea how much money Mid-Central really had.

    The Mid-Central Board of Directors looks at all those findings and says, “Not our fault”:

    MCEC takes these allegations very seriously. However, MCEC disagrees with the DLA’s finding of any alleged deficiencies. It is apparent that no amount of reasonable oversight would have detected the complex scheme of fraudulent and illegal activities conducted by Scott and Nicole Westerhuis.

    …Scott and Nicole Westerhuis were Platte natives, well respected members of the Platte community, and trusted overseers of MCEC’s financial activities.

    Unfortunately, Scott and Nicole Westerhuis were living outside of their financial means. As a result, they engaged in a complex scheme of fraudulent and illegal business activities using their positions at MCEC and AIII. In fact, investigators determined that the scheme devised by Scott and Nicole Westerhuis resulted in them embezzling over $1 million [Mid-Central Educational Cooperative, Response to SDDLA Special Report, 2017.05.17; in DLA audit of Mid-Central FY2015, 2017.05.19, pp. 63–64].

    A minor quibble—a lot of the living outside their means was a result of the Westerhuises’ coming up with this brilliant scheme, not the other way around.

    The major quibble—Auditor General Guindon isn’t saying Mid-Central needed to engage in fantastic efforts to outfox the criminal masterminds on their payroll. The Auditor General is laying out pretty basic financial expectations: manage conflicts of interest, follow grant rules, make sure every contract and expense goes through the board, and document work and expenses.

    But Mid-Central lays out eleven points on the Westerhuises’ masterful, impenetrable deceit to say We didn’t know! We couldn’t know! It’s not our fault! “…[T]here is nothing that the Board could have reasonably done to prevent this complex scheme of fraudulent and illegal activities,” Mid-Central concludes, surely with an eye toward the Black Bear lawsuit seeking to take some money out of their expiring hide.

    Just in case anyone still thinks someone should have been able to catch the Westerhuises and Phelps and Huber and Kuhn and other employees in this scam, Mid-Central cites [pp. 60–61the failure of the South Dakota Department of Education to implement proper procedures and controls over GEAR UP identified in the 2014 DLA audit. Mid-Central reminds us that they engaged Schoenfish and Company of Parkston to do their yearly audits (again, with an eye toward that lawsuit and their effort to shift liability to Schoenfish).

    And if all else fails, Mid-Central basically shrugs off the Auditor General’s recommendations as moot:

    The DLA’s Special Report provides a series of recommendations for MCEC going forward. MCEC and its Board take these recommendations very seriously and thank the DLA for its assistance. However, as of June 30, 2017, MCEC will terminate its provision of educational services to its member schools. Therefore, the DLA’s recommendations for future improvements become moot [Mid-Central, 2017.05.17; p. 67].

    Millions of dollars either lost or misaccounted, and Mid-Central says, not our fault, not our problem, we’re outta here.

  • Huether Boots Pal Sideras from SF Fire Department

    Mike Huether apparently has his own internal corruption scandal on his hands. After firing Fire Chief Jim Sideras two months before his planned retirement, banning Sideras from city Fire Rescue buildings, and seeing law enforcement search Sideras’s house Tuesday, the Sioux Falls mayor signals there is a crime of some import to investigate:

    “I can tell you that he’s no longer an employee with the city of Sioux Falls effective today,” Huether said. “We [are] gonna move on, take care of our city in the best way that we can, just like we’ve always done.”

    An email sent just before 5:30 p.m. from the city said Sideras’ last day was Tuesday. Later that evening, the mayor was not able to say why the decision was made, but he did add a little more context.

    “I will say this: that right now, we’ve got a good team of women and men that are doing some work, the DCI, the Minnehaha County Sheriff’s Department, and I’ve got great confidence that they’ll do a great job, and ultimately that’s whose hands are now tackling this for us and for the citizens,” Huether said [Dan Santella, “Huether Comments on Sideras'{s} Departure,” KELO-TV, 2017.05.02].

    As Todd Epp notes, Mayor Huether didn’t choose the best words for a bad situation. Instead of spinning a Trumpy, campaigny assurance that the thing he can’t tell us about won’t keep Sioux Falls from being great-great, Huether should have avoided “move on” and focused on the need to get to the bottom of the thing he can’t tell us about.

    Of course, if Sideras is just a judge’s signature away from being arrested, Huether will have to deal with far more implicating words that he uttered less than a month ago upon Sideras’s retirement announcement:

    “Chief Sideras, his bride Kathy, and their family and the Huethers go back a long ways, so to say I am proud and thrilled for them would be an understatement. It has been an honor to serve with him, and countless others feel the same,” says Mayor Mike Huether [City of Sioux Falls, press release, 2017.04.11].

    Back a long way, honor to serve… somewhere the SDGOP spin machine is archiving photos and video of Huether and Sideras together for use by Kristi, Marty, Dusty, Shantel, or whichever other Republican this Mayor Mike guy thinks he might run against next year.

  • Former South Dakota Food Stamp Admin Implicated in Wisconsin, Virginia SNAP Abuse

    Hey, Kristi! You know all those fears you like to fan about fraud in food stamps? Well, the feds have found fourteen million dollars’ worth of food stamp fraud… committed not by food stamp recipients but by corrupt state officials in Virginia and Wisconsin following the direction of a former South Dakota official turned consultant. Here’s the Department of Justice’s statement on the “improper and biased quality control practices” that it says Julie Osnes instructed the Virginia Department of Social Services to use to falsely claim $7.1 million in food stamp administration bonuses:

    As part of the settlement, VDSS admitted that, beginning in 2010, it retained Julie Osnes Consulting, a quality control consultant, to reduce its SNAP benefits determination error rate by training VDSS quality control workers to “use whatever means necessary” to find a benefits decision “correct” rather than finding an error. VDSS also admitted that if its quality control staff “could not find a way to make a benefits decision correct,” they were instructed to “find a reason to ‘drop’ the case, or eliminate it from the sample.” VDSS acknowledged that this outcome-driven method, as implemented by VDSS between 2010 and 2015, “injected bias into the case review process” because it was designed to lower VDSS’s reported error rate by falsely reporting errors as “correct” or eliminating them from the sample. Through its use of these biased methods, VDSS was improperly awarded USDA performance bonuses for 2011, 2012, and 2013.

    VDSS further admitted that VDSS quality control workers did not want to use the methods proposed by Julie Osnes Consulting because they believed the methods lacked integrity, injected bias into the quality control process, and violated USDA requirements, and that they communicated these concerns to their supervisors. VDSS admitted that the former VDSS quality control manager pressured and intimidated these employees to force them to adopt these methods, including, according to these employees, threatening termination, providing negative performance reviews, taking away teleworking and flexible scheduling privileges, and engaging in other forms of harassment and retaliation.

    As part of the settlement, VDSS and the United States also agreed that VDSS had taken certain corrective actions beginning in 2015, including terminating its use of the improper quality controls methods devised by Julie Osnes Consulting [“Virginia Department of Social Services Agrees to Pay $7.1 Million to Resolve Alleged False Claims for SNAP Funds,” U.S. Department of Justice, 2017.04.10].

    DOJ offers a similar account of Osnes-guided food stamp monkeyshines in the Wisconsin Department of Health Services:

    As part of the settlement, WDHS admitted that, beginning in 2008, it utilized the services of Julie Osnes Consulting, a quality control consultant, to review the error cases identified by WDHS quality control workers. WDHS further admitted that based on instructions from Julie Osnes Consulting it implemented several improper and biased quality control practices, including: (1) finding a basis for dropping error cases from the review by discouraging beneficiaries from cooperating with information requests and pursuing unnecessary information; (2) selectively applying requirements and policies to overturn and reduce errors; (3) asking beneficiaries leading questions to obtain desired answers to eliminate error potential; (4) arbitrating any and all differences with USDA; (5) subjecting error cases to additional scrutiny and quality control casework with the goal of overturning an error or dropping a case; and (6) omitting verifying information in documents made available to USDA. These practices improperly decreased WDHS’s reported error rate, and as a result, WDHS earned performance bonuses for 2009, 2010, and 2011 to which it was not entitled [“Wisconsin Department of Health Services Agrees to Pay Nearly $7 Million to Resolve Alleged False Claims for SNAP Funds,” U.S. Department of Justice, 2017.04.13].

    Julie Osnes? Who’s that? We could try to find out from her consulting firm website… but KELO’s Angela Kennecke called her yesterday and prompted her to scrub her online content. You can read that bio on the Internet Archive; here’s a similar bio Osnes put up online under another business venture of hers, RightManual.com:

    Julie Osnes
    Julie Osnes

    Julie Osnes is the CEO of RightManual.  The company was founded after identifying a need to create effective manuals that policy workers were able to use to assist in carrying out their duties in a cost effective manner.  Julie previously founded Julie Osnes Consulting, LLC in October 2007 after selling her interests in The Rushmore Group, LLC. Osnes retained SNAP QC consulting services at the time of separation. Ms. Osnes was a Member in Rushmore for 7 years (May 2000-October 2007) following over twenty years of state experience administering the SNAP Program for the South Dakota Department of Social Services. During this time, the South Dakota Food Stamp Program consistently maintained a high accuracy rate (exceeding 95 percent) that led to 16 consecutive years of enhanced funding from the federal government. Her considerable benefit delivery knowledge and management skills led Governor William Janklow to appoint her to lead his welfare reform initiative in 1996. This experience required her to form discussion committees, schedule focus groups, and ultimately develop and deliver the State’s TANF program to the legislature – a project of major scope and importance. In recognition of her national leadership role for the Food Stamp Program, Ms. Osnes was the recipient of the 2000 Leadership Award presented by the American Public Human Services Association (APHSA). Ms. Osnes was president of the American Association of Food Stamp Directors for five years and served on APHSA’s Board of Directors for four years. Her efforts providing QC consulting services with documented results is reason enough to apply her methods and experiences to QC issues facing other states. Julie Osnes is now sole proprietor of Julie Osnes Consulting, LLC, a company established to provide SNAP QC consulting services [jturincs, “Julie,” RightManual.com, 2016.12.11].

    The Milwaukee Journal Sentinel notes that Wisconsin Governor Scott Walker stopped the shady practices in 2011. However, Osnes appears to have kept her contract with the state of Wisconsin:

    Julie Osnes Consulting was paid $429,000 for its work in 2009, records show. That was 15% of the total performance bonus for low error rates awarded that year to the agency, according to [WDHS spokeswoman Julie] Lund.

    The consultant was paid $100,004 in subsequent years. The contract was terminated in 2015, Lund said [Don Behm, “Wisconsin Pays $7 Million Penalty to Federal Government for False Food Share Claims,” Milwaukee Journal Sentinel, 2017.04.13].

    Osnes contracted with the state of Virginia from 2010 to 2012. There’s no published word on whether Wisconsin and Virginia will try to make Osnes pay back her cut of the improper bonuses those states earned.

    States where Julie Osnes Consulting held contracts for food stamp work, archived from JulieOsnesConsulting.com 2015.02.20.
    States where Julie Osnes Consulting held contracts for food stamp work, archived from JulieOsnesConsulting.com 2015.02.20.

    Osnes’s website used to list the following states where her services had secured high performance bonuses for food stamp programs:

    FY 2013 Food Stamp High Performance Bonus

    96% of the total 2013 bonus pool of thirty million dollars went to the following states that currently partner or have partnered with Julie Osnes::

    • Alaska – Lowest Payment Error Rate& Lowest CAPER – $482,032
    • New Jersey – Lowest Payment Error Rate – $1,637,797
    • Virginia – Lowest Payment Error Rate – $1,723,956
    • Florida – Lowest Payment Error Rate – $7,015,422
    • Mississippi – Lowest Payment Error Rate – $1,185,054
    • South Carolina – Most Improved CAPER – $1,687,834
    • Iowa – Lowest CAPER – $856,340
    • Missouri – Most Improved Payment Error Rate – $1,656,202
    • Texas – Lowest Payment Error Rate – $6,056,493
    • Tennessee – Lowest Payment Error Rate & Most Improved CAPER – $5,078,969
    • Louisiana – Lowest Payment Error Rate – $1,614,241

    FY 2012 Food Stamp High Performance Bonus

    75% of the total 2012 bonus pool of thirty million dollars went to the following states that currently partner or have partnered with Julie Osnes:

    • Alaska – Lowest Payment Error Rate & Lowest Case & Procedural Error Rate – $ 710,531
    • Alabama – Lowest Payment Error Rate – $1,897,845
    • Wisconsin – Lowest Payment Error Rate – $1,842,047
    • Florida – Lowest Payment Error Rate – $8,072,238
    • Virginia – Lowest Payment Error Rate – $2,020,886
    • South Carolina – Lowest Payment Error Rate – $1,892,369
    • Mississippi – Lowest Case & Procedural Error Rate – $2,793,953
    • Maine – Lowest Case & Procedural Error Rate – $ 1,291,604
    • Louisiana – Lowest Payment Error Rate – $1,945,592

    FY 2011 Food Stamp High Performance Bonus

    71% of the total 2011 bonus pool of thirty million dollars went to the following states that currently partner or have partnered with Julie Osnes:

    • Alaska – Top 7 Positive Error Rate & Lowest Negative Error Rate – $ 562,113
    • Delaware – Top 7 Positive Error Rate – $435,208
    • Georgia – Most improved Negative Error Rate – $3,975,869
    • Wisconsin – Top 7 Positive Error Rate – $2,106,427
    • Florida – Top 7 Positive Error Rate – $9,087,687
    • Virginia – Top 7 Positive Error Rate – $2,303,828
    • South Carolina – Top 7 Positive Error Rate – $2,217,828
    • Maine – Lowest Negative Error Rate – $719,248

    FY 2010 Food Stamp High Performance Bonus

    77% of the total 2010 bonus pool of thirty million dollars went to the following states that currently partner or have partnered with Julie Osnes:

    • District of Columbia – Most improved Negative Error Rate – $347,086
    • Michigan – Most improved Negative Error Rate – $3, 338,653
    • Nebraska – Top Negative Error Rate – $363,960
    • Delaware – Top 7 Positive Error Rate – $320,503
    • Alaska – Top 7 Positive Error Rate – $232,898
    • Indiana – Top 7 (& most improved) Positive Error Rate – $1,618,569
    • Georgia – Top 7 Positive Error Rate – $3,076,511
    • Wisconsin – Top 7 Positive Error Rate – $1,484,019
    • Florida – Top 7 Positive Error Rate – $6,083,577

    FY 2009 Food Stamp High Performance Bonus

    71% of the total 2009 bonus pool of thirty million dollars went to the following states that currently partner or have partnered with Julie Osnes:

    • Maine – Top 7 Positive and Top 4 Negative Error Rates – $1,328,261
    • Delaware – Top 7 Positive Error Rate – $407,494
    • Georgia – Top 7 Positive Error Rate – $4,187,866
    • Wisconsin – Top 7 Positive and Most Improved Negative Error Rates – $2,861,791
    • Nebraska – Top 7 Positive and Top Negative Error Rates – $850,986
    • Florida – Top Positive and Most Improved Negative Error Rates – $11,552,247

    FY 2008 SNAP Program High Performance Bonuses

    48% of the total 2008 bonus pool of thirty million dollars went to the following states that currently partner or have partnered with Julie Osnes:

    • Delaware – Most Improved Positive – $408,606
    • Florida – Highest Accuracy Positive – $7,179,612
    • Georgia – Highest Accuracy Positive – $4,062,236
    • Colorado – Most Improved Negative – $1,454,277
    • Nebraska – Highest Accuracy in both Positive and Negatives – $1,339,060

    FY 2007 Food Stamp Program High Performance Bonuses

    • Nebraska – Top 7 for Positive and Top 4 for Negative error rates – $1,023,369
    • Pennsylvania – Top 7 Positive – $4,644,234
    • Missouri – Top 7 Positive – $2,662,498
    • Florida – Most Improved Positive – $5,481,910
    • Alabama – Top 4 negative – $1,715,161

    FY 2006 Food Stamp Program High Performance Bonuses

    • Missouri – Top 7 Positive Error Rate – $3,234,784
    • Nebraska – Top 4 Negative Error Rate- $466,639
    • Pennsylvania – Top 4 Negative Error Rate – $3,651,458

    FY 2005 Food Stamp Program High Performance Bonuses

    • Alabama – Top 7 Positive Error Rate – $4,336,006
    • Nebraska – Top 4 Negative Error Rate – $1,063,944

    FY 2004 Food Stamp Program High Performance Bonuses

    • Utah – Top 7 Positive Error Rate – $561,367
    • Pennsylvania – Top 7 Error Rate – $5,010,200
    • Colorado – Most Improved Positive Error Rate – $1,202,150

    FY 2003 Food Stamp Program High Performance Bonuses

    • California – Most Improved Positive Error Rate – $6,819,955
      • QC services were partnered with counties and not the state. Counties included Los Angeles, San Bernardino, Fresno, Sacramento, Santa Clara, Contra Costa, San Joaquin, Tulare & Orange [from JulieOsnesConsulting.com, archived 2015.02.20].

    There’s no word on whether DOJ has found evidence of improper food stamp performance bonuses in any of these other states where Osnes’s firm provided services.

    Osnes’s lawyer, Jamie Damon of Pierre, tells KELO-TV (and anyone else who will listen that the DOJ is “slandering” his sterling-souled client to cover up the feds’ own failings:

    JOC is a well-respected company and with a great reputation.  FNS and DOJ have set out to destroy this reputation by civil proceedings which I, as JOC counsel believes were meant to shield USDA & FNS from further embarrassment as the result of the 10/15 OIG Report.

    JOC offers advice.  States are free to use JOC’s advice in any manner they see fit and JOC does not sign off on completed cases.  The only thing JOC can be certain of is that instructions were not given that would have resulted in a State going outside of USDA established standards & procedures.

    As an aside I have known Julie Osnes for many, many years.  She is a person of the highest integrity.  Her business dealings reflect that.   She does not advocate “taking any means necessary” but rather consistently advises states to follow federal regulations and not step beyond them.  JOC cannot speak for state management practices since her work never dealt with a state’s employee performance.  JOC dealt with interpretation of federal regulations and how to apply them to cases under review [Jamie Damon, statement to KELO-TV, 2017.04.17].

    If the DOJ settlements against Wisconsin and Virginia do redound to the detriment of Osnes’s consulting business, she and her husband Douglas can fall back on farming. They just filed new farm incorporation papers this winter for their 160 acres north of Pierre. If the DOJ’s characterization of her consulting is true, Julie Osnes may find growing food a healthy change from helping government agencies treat federal food assistance as a cash crop.

    Related Reading: Todd Epp views Osnes’s alleged participation in this state government food stamp scam as part of a pattern of South Dakota officials using their government experience to improperly cash in (think EB-5 and GEAR UP). “South Dakotans are no better than anyone else,” writes an angry Epp. “We are also subject to the Seven Deadly sins, with greed being chief among them, particularly if you are an alumni of the state’s Republican one party rule.”

  • Vermont Wins $163M in Settlements from Financiers in EB-5 Scandal

    In another reminder of how much harder Vermont has tackled EB-5 corruption than South Dakota, Vermont Governor Phil Scott held a press conference Thursday to announce that financial firm Raymond James has agreed to pay $150 million to settle charges that it helped Miami businessman Areil Quiros skim hundreds of millions of dollars from Vermont’s EB-5 program for his personal use. This settlement follows an October 2016 $13.3 million settlement by Citibank, which helped finance Quiros, to keep its fat out of the fraud case fire.

    Quiros goes on trial in September 2018.

    Meanwhile in South Dakota, the state has let EB-5 czar Joop Bollen off with non-punitive settlements of lawsuits and a $2,000 plea bargain in the only criminal case to arise from our EB-5 scandal. EB-5 watchdog David North finds the South Dakota prosecutions surprisingly weak compared to Vermont’s:

    Meanwhile, in a somewhat parallel case in South Dakota, the one other state that had, for a while, a state entity serving as the regional center, there has been no such relief. If anything the South Dakota case was much more egregious than the one in Vermont.

    More money was lost or stolen, more projects failed, the state’s political leaders were deeply involved in some aspects of the case, a key player was found dead (his shotgun wound in the stomach was ruled a suicide by the State’s Attorney General), a mysterious multi-million-dollar payment was made to a bank account in Cyprus owned by a Russian railroad oligarch, and a state criminal indictment of another key play, Joop Bollen, ended with an extremely generous plea bargain including no jail time and a $2,000 fine, as has been previously reported (see here and here) [David North, “Big Finance Firms Pony Up in Vt. EB-5 Case — Nothing Similar in S.D.,” Center for Immigration Studies, 2017.04.14].

    North cocks an eyebrow at South Dakota’s U.S. Attorney Randy Seiler for taking no action on South Dakota’s EB-5 scandal. We’ll see what voters think of state Attorney General Marty Jackley’s relatively gentle treatment of South Dakota’s EB-5 scandal compared to Vermont’s more vigorous prosecution of EB-5 improprieties.

    Bonus Political Connection: Don’t forget—Donald Trump appears to have profited from the Vermont EB-5 scandal: among Quiros’s many challenged expenditures is a $2.2-million condo in Trump Tower New York. It remains to be seen whether anyone can connect the dots from South Dakota’s EB-5 program through Northern Beef Packers, Ultracare Holdings Limited of Cyprus that received $1.5 million from NBP, and Ultracare’s Russian owner Globaltrans Investment Inc. to Donald Trump’s friends in Russia.

  • 20 Legislators Ask GOAC to Investigate GEAR UP

    In a April 6, 2017, letter, 20 legislators led by Representative Elizabeth May (R-27/Kyle) ask their colleagues on the Government Audit and Operations Committee to hold public hearings investigate “the operations and fiscal affairs of SD departments, institutions, boards, agencies, and their personnel” involved in the GEAR UP and Mid-Central Educational Cooperative “scandal.”

    Yes, they use the word “scandal” in their letter.

    Worded as such, the request does not include asking questions of their colleague, Rep. Kyle Schoenfish (R-19/Scotland), whose private accounting firm Schoenfish & Company conducted the audits that failed to sound any alarms about Mid-Central business manager Scott Westerhuis’s heist of possibly millions of dollars from federal GEAR UP grant funds.

    But how many millions?

    Public inquiry results, reported in local news across the state of this now notorious breach of trust, indicate up to $100 Million in lost taxpayer monies intended to prepare and educate disadvantaged SD Native American youth for college. Unofficial reports indicate the inappropriate and apparent illegal misuse of these monies occurred over many years and under the supervision and direction of persons officially associated with South Dakota departments, institutions, boards, and agencies [Rep. Elizabeth May et al., letter to GOAC Chair Senator Deb Peters, 2017.04.06].

    $100 million? Grant expert Michael Wyland has estimated that, from the beginning of South Dakota’s involvement with GEAR UP under the Rounds Administration in 2005 to the revelation of the GEAR UP scandal with the Westerhuis suicide-murders in 2015, South Dakota appropriated $48 million in federal and state funds to the program, and not all of that money was lost. Rep. May and company appear to be alleging crimes of much greater financial scope.

    GOAC Chair Senator Deb Peters tells KELO-TV that the Department of Legislative Audit will issue a report on Mid-Central by the end of April. GOAC meets in Pierre on Tuesday, April 25, at 9 a.m.

    The signers of the April 6 letter include seventeen Republicans and three Democrats. Two signers, Nelson and Tapio, are members of GOAC.

    1. Rep. Thomas Brunner (R-29/Nisland)
    2. Rep. Blaine Campbell (R-35/Rapid City)
    3. Rep. Drew Dennert (R-3/Aberdeen)
    4. Rep. Lynne DiSanto (R-35/Rapid City)—majority whip
    5. Sen. Jason Frerichs (D-1/Wilmot)—minority whip
    6. Rep. Julie Frye-Mueller (R-30/Rapid City)
    7. Rep. Tim Goodwin (R-30/Rapid City)
    8. Sen. Troy Heinert (D-26/Mission)—assistant minority leader
    9. Sen. Phil Jensen (R-33/Rapid City)
    10. Rep. Dan Kaiser (R-3/Aberdeen)
    11. Rep. Isaac Latterell (R-6/Tea)—majority whip
    12. Rep. Steve Livermont (R-27/Martin)
    13. Rep. Sam Marty (R-28B/Prairie City)
    14. Rep. Elizabeth May (R-27/Kyle)
    15. Sen. Stace Nelson (R-19/Fulton)
    16. Sen. Reynold Nesiba (D-15/Sioux Falls)
    17. Rep. Tom Pischke (R-25/Dell Rapids)
    18. Sen. Lance Russell (R-20/Hot Springs)
    19. Sen. Jim Stalzer (R-11/Sioux Falls)
    20. Sen. Neal Tapio (R-5/Watertown)

  • Exclusive: Text of Proposed Voter Protection and Anti-Corruption Amendment!

    Yesterday Represent South Dakota submitted a constitutional amendment to the Legislative Research Council for review. Here’s the full text of that amendment for our review. I intersperse my explanations and commentary:

    Section 1. This amendment shall be known as the South Dakota Voter Protection and Anti-Corruption Amendment.

    Section 2. That Article XXX of the Constitution of South Dakota be created by adding new sections to read as follows:

    §1 Whereas the motto of the state of South Dakota is “Under God the People Rule” and whereas the Legislature inherently derives its power from the consent of the people, the people of South Dakota hereby find and declare that in order to protect the public trust:

    1. Public officials, candidates, and lobbyists must be subject to robust ethics, conflict-of-interest, and anti-corruption laws;
    2. A strong and independent citizen ethics commission is necessary to oversee and enforce those laws in the name of the people of South Dakota; and
    3. The will of the people, especially when voiced to ensure the integrity, honesty, and accountability of their government, must be respected.

    §2 The offenses of bribery and corrupt solicitation described in Article III, Section 28 shall be Class 4 felonies.

    §3 A lobbyist may not knowingly give or offer a gift to an individual who they know or should know is a senior public servant. This prohibition does not apply if the lobbyist is the spouse, fiancée, or fiancé, or is, whether by blood or by marriage, a child, parent, sibling, grandparent, grandchild, aunt, uncle, niece, or nephew of the senior public servant. Any person who violates this section shall be guilty of a Class 1 misdemeanor.

    The latter item seeks to toughen up the lobbyist gift ban passed in House Bill 1073. But I wonder: would this language prevent the Legislature from continuing to exempt food and drink from the definition of “gift”?

    §4 No public official may knowingly use state resources for improper personal gain. Any public official who violates this section shall be guilty of a Class 1 misdemeanor, but a public official who knowingly uses state resources for improper personal gain in a way that is significantly exploitative of the state shall be guilty of a Class 2 felony.

    This item cranks up Marty Jackley’s Senate Bill 27, which would define such misuse of state resources as theft and subject misusers to penalties ranging from Class 6 felony only up to Class 3 felony. This item’s Class 2 felony punishment is up to 25 years and $50,000.

    §5 A foreign government, foreign corporation, foreign political party, or foreign national may not make a contribution or expenditure in connection with any state or local candidate or ballot-issue election.

    §6 A candidate or person holding elected office may not knowingly use a campaign contribution for personal use. Any person who violates this section shall be guilty of a Class 5 felony.

    This item amps up Bille Sutton’s amendment to Senate Bill 54, Section 41, which bans conversion of campaign funds to personal use but specifies no penalty.

    §7 A labor union or corporation may not, directly or through an intermediary, make a campaign contribution to a candidate or political party.

    There’s the undoing of the big, sneaky, yucky part of SB 54 that lets more big money into state politics. Yay, Item #7!

    §8 A candidate may not knowingly solicit, accept, or receive a campaign contribution within the South Dakota capitol building. Any person who violates this section shall be guilty of a Class 1 misdemeanor.

    §9 A senior public servant may not become a lobbyist, other than a public lobbyist for state or local government, while they are a senior public servant and for a period of two years after they cease to be a senior public servant. Any person who violates this section shall be guilty of a Class 1 misdemeanor.

    The two-year revolving-door provision was in Initiated Measure 22; the Legislature enacted it in Senate Bill 131. This item thus represents the main thesis of this amendment that we can’t trust the Legislature to leave in statute the protections against corruption that we want and that to make those protections stick, we must write them into the state constitution, which only the people can change.

    §10 A lobbyist may not knowingly deliver a campaign contribution made by another individual or entity. Any person who violates this section shall be guilty of a Class 1 misdemeanor.

    As used in this section, “deliver” means to transport, carry, transfer, or otherwise transmit, either physically or electronically. The prohibition in this section does not apply when a person delivers a campaign contribution to his or her own campaign, or to the campaign of his or her immediate family member, and shall not be interpreted to prohibit any person from making a campaign contribution or from encouraging others to make campaign contributions or otherwise support or oppose a candidate.

    §11 A judge shall avoid the appearance of bias, and shall disqualify himself or herself in any proceeding where monetary or in-kind support related to the judge’s election or retention creates an appearance of bias to a reasonable person.

    Judges! That’s a new item compared to the provisions of IM 22. I wonder if Judge Mark Barnett, who helped his Republican pals throw out IM 22, raised Represent South Dakota’s hackles.

    §12 A candidate may not accept campaign contributions from a single source that, in total and per election cycle for the office sought, exceed:

    1. $500 for the office of member of the South Dakota house of representatives, or for any other local, non-statewide elected office other than member of the South Dakota senate, including, but not limited to, county, municipal, and school board office;
    2. $750 for the office of member of the South Dakota senate;
    3. $1,500 for the office of attorney general, lieutenant governor, commissioner of school and public lands, auditor, treasurer, and secretary of state, or for any other statewide elected office other than Governor; and
    4. $4,000 for the office of Governor.

    The limits prescribed in this section do not apply to contributions made by a political party, or to contributions made by the candidate or the candidate’s spouse to the candidate’s own campaign. The dollar amounts in this section shall be adjusted for inflation by the secretary of state after each general election.

    §13 A political party may not accept campaign contributions from a single source that, in total and per calendar year, exceed $5,000. For the purposes of this section, a state party and its affiliated local committees and/or subdivisions shall be treated as a single political party recipient. The dollar amounts in this section shall be adjusted for inflation by the secretary of state after each general election.

    Specific dollar limits seem like policy nitty gritty better left to statute… but again, this amendment’s point appears to be that if we leave campaign finance limits in the hands of campaigners, we’ll never get good limits. Notice that the above two items relieve us of the burden of amending the constitution every decade or two to adjust to economic realities by directing the Secretary of State to adjust these amounts by inflation after every election.

    §14 The Legislature shall regulate persons who are employed or otherwise gainfully compensated to act as a lobbyist to influence in any manner legislative, executive, or administrative action, and shall ensure that such persons promptly register with the state as lobbyists and disclose information pertinent to the public interest.

    §15 (1) The people of South Dakota find and declare that the Legislature’s State Government Accountability Board did not fully respond to the people’s demand for strong and accountable ethics oversight, in that:

    1. The Legislature exempted itself from oversight by that board; and
    2. The oversight authority of that board was inadequate to protect the public trust.

    Therefore, the people of South Dakota find and declare that they are best suited to create an ethics commission that can adequately protect the public trust, and hereby nullify the State Government Accountability Board created by the Legislature in 2017 in House Bill 1076 and in its place create a new State Government Accountability Board to serve as an independent citizen ethics commission.

    Repeal and replace the Legislature’s GAB? There’s some sweet revenge there. Let’s hope the Democratic sponsors of HB 1076 don’t take this measure personally.

    The State Government Accountability Board shall serve as an independent entity, notwithstanding any other provision of the Constitution of South Dakota, including Article II, and shall conduct itself in a nonpartisan manner with integrity, honesty, and fairness. All rules adopted, investigations conducted, and sanctions imposed by the board are subject to judicial review consistent with the Constitution.

    (2) All South Dakota registered voters are eligible to apply for membership on the board. Only registered voters may be members. The board shall be directed by seven members appointed from those who have applied as follows:

    1. Two members appointed by the South Dakota Supreme Court, each of whom shall be a former or retired judge, and each of whom shall be registered with a different major political party;
    2. One member appointed by the Governor from a list of at least three registered voters provided by the speaker of the house of representatives;
    3. One member appointed by the Governor from a list of at least three registered voters provided by the minority leader of the house of representatives; and
    4. Three members, at least two of whom shall be nonlawyers, each appointed by majority vote of the four other members.

    I’m a bit uneasy that this item gives members of the two major political parties (see definition below in §16) places of privilege on the committee. But one could argue that this provision avoids the partisan gambit Al Novstrup used to argue against Amendment T last year, the notion that Republicans could still capture an independent board by appointing the maximum number of Republicans, friendly Independents and Libertarians, and no Democrats. Checking one major political party may require ensuring that they are balanced by members of the other major political party.

    No member may be registered as a lobbyist or may hold other local, state, or federal public office or political party office while a member. Each member shall have been continuously registered with the same political party, or continuously registered as unaffiliated with any political party, for the two years immediately preceding appointment. Each member shall serve for a period of four years, except that after the initial appointments are made, the secretary of state shall select, in a random public drawing, one member to serve a one-year term and two members each to serve two-year, three-year, and four-year terms, respectively, for their first term only, to achieve staggered ending dates. Members shall not serve more than two terms. Service of a term means service of more than two years of a term. Any vacancy shall be filled within seventy-five days in the manner in which that position was originally filled. If a vacancy is not filled within seventy-five days, the Supreme Court shall fill the vacancy within an additional sixty days. Initial members shall be appointed by September 1, 2019. If all seven initial members are not appointed by this date, the Supreme Court shall appoint the remaining members by November 1, 2019. The secretary of state shall impartially facilitate the member appointment process.

    Members may be removed by the Governor, with the concurrence of the senate, only for substantial neglect of duty, gross misconduct, or inability to discharge the powers and duties of office, after written notice and an opportunity for response.

    (3) The board shall have the power, notwithstanding any other provision of the Constitution, to:

    1. Investigate allegations of bribery, theft, or embezzlement of public funds, or any other violations of this Article, ethics rules, or state law related to government ethics, campaign finance, lobbying, government contracts, or corruption by any elected or appointed official, judge, or employee of any state or local government, and to issue subpoenas requiring the attendance of witnesses or the production of books, records, documents, or other evidence relevant to an investigation;
    2. Adopt ethics rules, subject to rulemaking procedures as defined by law, including, but not limited to, provisions on campaign finance, conflicts of interest, confidential information, use of position, contracts with government agencies, legislative recusal, and financial interest disclosure, to which all elected or appointed officials, judges, and employees of state or local government shall be subject. The process for adopting ethics rules shall include opportunities for public input and public participation. Nothing in this Article shall prohibit the Legislature from enacting laws that are not inconsistent with, or contradictory to, the ethics rules adopted by the board;
    3. Issue advisory opinions, which may be relied upon by any person involved in the specific transaction or activity with respect to which such advisory opinion is rendered, and by any person involved in any specific transaction or activity which is indistinguishable in all its material aspects from the transaction or activity with respect to which such advisory opinion is rendered. Notwithstanding any other provisions of law, any person who relies upon any provision or finding of an advisory opinion in this regard and who acts in good faith in accordance with the provisions and findings of such advisory opinion shall not, as a result of any such act, be subject to any sanction provided by this Article;
    4. Adopt rules of procedure for the board, including rules to prevent the abuse or overuse of the submission of complaints;
    5. Hire and supervise staff, including such legal, investigative, and administrative and clerical employees as are necessary to support the functions of the board;
    6. Conduct specific or random audits of disclosures required by state campaign finance, ethics, lobbying, and government contracting law;
    7. Impose sanctions on any elected or appointed officials, judges, or employees of state or local government, including the power to issue orders, impose fines, and commence administrative actions. The board shall issue written explanations justifying such sanctions;
    8. Refer information or complaints alleging violations of this Article, the board’s ethics rules, or state laws related to ethics, campaign finance, or corruption to the appropriate prosecutorial authority or to internal or outside counsel hired or selected by the board, before, during, or after an investigation;
    9. Conduct educational programs for the benefit of the public and those subject to this Article; and
    10. Exercise additional powers not inconsistent with this Article as may be conferred by law.

    (4) The board shall convene at least once every quarter. The assent of four members shall be required for the consideration and resolution of matters that involve the exercise of the board’s duties and powers under this Article, including the adoption or approval of all motions, procedures, provisions, and appeals, the hiring of staff, the issuance of advisory opinions, the referral to the appropriate prosecutorial authority of complaints alleging potential violations, and the imposition of sanctions, except that the assent of three members shall be required for the convening of meetings, the initiation and carrying out of investigations, including the issuance of subpoenas, the approval of public education materials, the approval of minutes of previous meetings, and actions related to board contracts.

    (5) Unless otherwise prohibited by federal or state law, any person acting in good faith may furnish information, or file a complaint, which may be anonymous, alleging a suspected, anticipated, or completed violation, and may request a status update to which the board shall respond in writing within sixty days. Any public employee may file a grievance with the Civil Service Commission, or other appropriate agency or entity, if the employee believes that there has been retaliation from his or her employer because of his or her reporting of a suspected, anticipated, or completed violation through the chain of command of the employee’s department, or to the board.

    (6) All final reports and findings shall be made available to the public within ten days of completion. The board shall annually report to the people on its activities. The report shall include comprehensive information concerning the board’s activities, including the number of complaints received, complaints filed by separate persons, investigations conducted, hearings held, sanctions imposed, and advisory opinions issued.

    (7) On an annual basis beginning in 2020, the board shall issue to the Legislature written recommendations for legislation that seeks to increase public trust, transparency, and accountability in government and elections and decrease the risk of corruption and conflicts of interest.

    (8) Members shall complete financial interest disclosure statements.  Any member who has a personal, private interest in a matter before the board, or with a direct and substantially related interest in a matter, must disclose the fact of such interest and must recuse himself or herself from working on the matter, unless their vote would be necessary to resolve the matter.

    (9) All provisions of this section shall be enforceable by any circuit court. The board may intervene as a matter of right in any civil action involving any government entity, agency, or instrumentality alleged to be in violation of any mandate or prohibition of this Article, and in any civil action relating to its powers or to the sufficiency of resources provided for the board’s implementation and operation.

    (10) On July 1, 2019, and on every July 1 thereafter, the state treasurer shall transfer from the state general fund three hundred and eighty-nine thousand dollars, indexed to inflation, to a separate constitutional Ethics Law Enforcement Fund to be administered solely by the board. This transfer shall occur notwithstanding any other provision of the Constitution. The Legislature shall ensure that this amount of money is available in the state general fund for the state treasurer to make such transfer. Only the board may authorize the spending or transfer of moneys from the Ethics Law Enforcement Fund. The Legislature may appropriate additional funds to the Ethics Law Enforcement Fund or another fund for use by the board for its various expenses. While serving on business of the board, members shall receive reasonable travel expenses and per diem compensation. This provision shall be self-executing.

    Recall that Judge Barnett said voters can’t appropriate money. The amendment here directs the Legislature to make money available. Constitutional scholars, is there a difference between appropriation by initiated law and appropriation by constitutional amendment?

    §16 Terms used in this Article have the following meanings:

    1. “Corporation,” any corporation, nonprofit corporation, company, limited liability company, limited partnership, business trust, business association, or other similar entity;
    2. “Elected office,” a non-federal office elected by South Dakota voters;
    3. “Gift,” any item, service, or thing of value not given for fair market consideration, but “gift” does not mean purely informational materials or campaign contributions;
    4. “Local,” any subdivision of the state for governmental, political, or related purposes, including, but not limited to, a county, municipal, town, local, or school board subdivision;
    5. “Major political party,” the two parties which polled for their respective candidates for the office of President of the United States the highest and the next highest number of votes at the last general election for such office;
    6. “Personal use,” to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate’s election campaign;
    7. “Senior public servant,” any person holding a non-federal office elected by South Dakota voters, or a non-elected individual who is an appointed officer, director, commissioner, head, or other executive or co-executive of a state agency, board, division, institution, or principal department, including, but not limited to, a member of the State Government Accountability Board and a gubernatorial cabinet member.

    §17 Each provision of this Article is intended to be independent and severable, and if any provision is held to be invalid, either on its face or as applied to any person, entity, or circumstance, the remaining provisions, and the application thereof to any person, entity, or circumstance other than those to which it is held invalid, shall not be affected thereby.

    LRC will say this severability clause is unnecessary. Judge Barnett said otherwise on IM 22, so Represent SD is using this clause to cover its bases.

    In any case of a conflict between any provision of this Article and any other provision contained in this Constitution, the provisions of this Article shall control.

    §18 This Article is self-executing and shall take effect sixty days after approval. Each provision shall be justiciable and enforceable by any circuit court. Laws may be enacted to facilitate, safeguard, or expand, but not to hamper, restrict, or impair, the powers this Article grants and the protections it establishes.

    This enactment trumps Senate Bill 59, which sets the enactment date of initiated measures as July 1 after the general election.

    Section 3. That Article III, Section 1 of the Constitution of South Dakota be amended to read as follows:

    The legislative power of the state shall be vested in a Legislature which shall consist of a senate and house of representatives. However, the people expressly reserve to themselves the right to propose measures, which shall be submitted to a vote of the electors of the state, and. Such measures, if approved by a simple majority of those voting on the measure, shall become effective sixty days after approval. Legislation or other action that repeals, amends, or otherwise frustrates the effectuation or implementation of any such measure shall not go into effect until submitted to a vote of the electors of the state and approved by a simple majority of those voting on the question.

    The people also expressly reserve the right to require that any laws which the Legislature may have enacted shall be submitted to a vote of the electors of the state and approved by a simple majority of those voting on the question before going into effect, except such laws as may be necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions, for which the Legislature shall state specific facts evidencing such necessity.

    No law substantively changing the rules, requirements, or criteria governing the initiative or referenda process shall take effect until after that law has been submitted to a vote of the electors of the state and approved by a simple majority of those voting on the question. Not more than five percent of the qualified electors of the state shall be required to invoke either the initiative or the referendum.

    This section shall not be construed so as to deprive the Legislature or any member thereof of the right to propose any measure. The veto power of the Executive shall not be exercised as to measuresan initiated measure approved by the people or a measure referred to a vote of the people. This section shall apply to municipalities. The enacting clause of all laws approved by vote of the electors of the state shall be: “Be it enacted by the people of South Dakota.” The Legislature shall make suitable provisions for carrying into effect the provisions of this section.

    There’s our protection of initiative and referendum. Instead of being able to flat-out repeal a measure we voters have approved, legislators must kick their repeals and tinkerings and “otherwise frustrations” back to us for our approval.

    Section 4. Each provision of this Amendment is intended to be independent and severable, and if any provision is held to be invalid, either on its face or as applied to any person, entity, or circumstance, the remaining provisions, and the application thereof to any person, entity, or circumstance other than those to which it is held invalid, shall not be affected thereby.

    LRC will review this proposal and offer its recommendations on style, form, and substantive matters by April 21.

  • Represent SD Submits Initiated Amendment to Protect Ballot Measures and Restore Some of IM22

    Represent South Dakota wasn’t able to stop the Legislature from repealing Initiated Measure 22, the anti-corruption measure voters passed last November. Thus, they are proposing a constitutional amendment to restore some of what the Legislature took away, strengthen some of what the Legislature passed to “replace” IM22, and, in a reach beyond what IM22 did, protect the initiative and referendum process from Legislative meddling.

    Represent SD spokesman Doug Kronaizl of Vermillion says his group filed language for an initiated amendment with the Legislative Research Council this morning. Represent SD has not made that draft available for publication yet, but their press release summarizes the main provisions as follows:

    1. Protect voter-approved laws from legislative meddling. Prohibit the legislature from changing or repealing laws passed by the voters without going back to the voters for their approval.
    2. Ban lobbyist gifts to politicians. Close loopholes created by the legislature that currently allow lobbyists to provide politicians with lavish meals and alcohol.
    3. Ban foreign money in South Dakota elections.
    4. Ban union and corporate contributions to political candidates. Reinstate the longtime ban on contributions from labor unions and corporations to candidates quietly repealed by the legislature in 2017.
    5. Lower campaign contribution limits to ensure that large donors can’t buy South Dakota’s elections.
    6. Create an independent citizen ethics commission. After repealing IM-22’s ethics commission, the legislature offered the people a weak, toothless replacement, and then exempted themselves from its oversight. The amendment replaces it with an accountable, independent citizen ethics commission that has oversight over all three branches of government [Represent South Dakota, press release, 2017.04.06].

    Item #1 appears to be a “Don’t Mess with Us” amendment, akin to what I proposed in February. Imagine what would have happened if the Legislators would have had to submit their repeal of IM 22 to a vote of the people!

    Item #2 appears to pounce on the lobbyist-gift ban passed in House Bill 1073, which does indeed exempt wining and dining. (See what happens when you let legislators write laws to curb their own corruption?)

    Item #3 takes a step federal law already has, meaning I wouldn’t be able to ask my Canadian friends to contribute to my next campaign. (Send those loonies now!)

    Item #4 responds to one of the gravest errors of the 2017 Legislature, which went the opposite direction that voters signaled in IM 22 and opened the door for more big money in South Dakota campaigns instead of less.

    Item #5 would place in the Constitution the lower campaign contribution caps that our Legislature completely ignored in its reforms this year (but which Senator Brock Greenfield assures us he wants to take up in 2018—gee, Brock, maybe Represent SD is about to save you some work?).

    Finally, Item #6 challenges House Bill 1076, which creates the Government Accountability Board. Represent SD points out a remarkable fact about the GAB that our legislators said would replace the IM22 ethics commission: HB 1076 gives the GAB authority to “review and investigate any person holding a statewide office, as defined in § 12-27-1, and employees of the executive branch.” That scope conveniently leaves legislators outside the reach of their ethics commission.

    Hmm… after this Session, do we really believe the Legislature can get by without some external review? Again, do you see what happens when you let legislators write laws to curb their own corruption?

    Notice that these points do not mention public campaign finance, a key component of IM 22 that Republicans universally panned and refused to consider in their “replacement” legislation this year. I will wait to see a full draft to confirm that “Democracy Credits” are not part of this show.

    In submitting their draft to LRC, Represent SD starts a 15-day review period, by the end of which LRC must provide its comment on the amendment draft. Represent SD may then submit its draft to the Attorney General, who will have another 60 days to review and provide his public explanation. So by June 21, if government takes all time allotted and Represent SD moves with all possible alacrity, we could see petitions on the street for this Amendment. Represent SD will need to gather 27,742 signatures from registered South Dakota voters by November 6 to place this amendment on the 2018 ballot.