• Tag Archives Kyle Schoenfish
  • Auditor General Briefs GOAC on Mid-Central/GEAR UP Tuesday; Nelson Demanding Answers from Schoenfish

    Correction/Update 16:11 CDT: Auditor General Marty Gunidon e-mailed me to correct my original report. He will not be presenting his final report on Mid-Central/GEAR UP on Tuesday. He is appearing before the Government Operations and Audit Committee to brief new members of the committee on “the timeline and nature of the work we have conducted regarding the Department of Education, Mid Central Education Cooperative and related parties and the status of where we are with the reports.  I will not be discussing the reports or the findings contained in those reports at Tuesday’s meeting as they are not yet ready for release.”

    I regret the error and have amended the headline to reflect Auditor General Guindon’s statement. I apparently misread Mercer’s statement, “Come this Tuesday, he presents his report to the Legislature’s Government Operations and Audit Committee” to mean Guindon would present his final report rather than a version of the briefing he presented to the Legislative Executive Board this week. Even absent a final report, expect Senator Nelson to seek an opportunity to ask some hard questions.

    I leave the original text of my post below, with new italics to reflect my erroneous statements.


    Bob Mercer notes that the Department of Legislative Audit will present a much-anticipated Special Review Report on the Mid-Central Educational Cooperative’s mishandling of the GEAR UP grant to the Government Operations and Audit Committee next Tuesday. This week Guindon told the Legislative Executive Board that he has “one interview left” before Tuesday’s report.

    GOAC has a full agenda Tuesday, with the annual state budget audit, brand board, telecommunications assistance for disabled folks, and non-meandered waters all before lunch and the Mid-Central discussion after lunch, followed by Bureau of Human Resources issues. But expect at least one GOAC member, Senator Stace Nelson, to seek extended discussion on Mid-Central. As South Dacola notes, Senator Nelson continues to hammer his Republican District 19 colleague Rep. Kyle Schoenfish, in very direct and personal language, for dodging questions about his accounting firm’s involvement in the GEAR UP scandal:

    There have been significant concerns and questions expressed by voters in our district, by other legislators, and even KELO’s Angela Kennecke in a news story, regarding our district Rep. Kyle Schoenfish’s reported involvement in the auditing of certain entities at the center of this scandal. On Jan. 31, I officially forwarded those questions to Rep. Schoenfish. He responded on Feb. 4 stating the questions were “..fairly easy to address.” Despite that statement, to date he has refused to provide answers to those questions asked by Kennecke and others. Additionally, Rep. Schoenfish failed to show up for two of our district’s five cracker barrels (legislative forums), one in Corsica on Feb. 16, and the other in his hometown of Scotland on March 11. He now claims repeatedly in his articles to our local papers that he has been “attacked” by “dishonest politicians and people” and claims to be a victim of “meritless political attacks.”

    Rep. Schoenfish is being “attacked” by his own record and the ugly appearance that comes from avoiding answering questions that the public has a right to have answered. In regards to his missing or avoiding cracker barrels, if I as a husband, daddy, grandfather, small Sioux Falls business manager, hobby farmer and busted-up old Marine can make time to meet my obligations and drive several hours to attend the voters’ cracker barrels to be answerable to you, I expect a young, single man living at home and working for his father to make time for the responsibilities he knowingly signed on to (and got paid for), or to resign if he is unwilling to do so [Sen. Stace Nelson, “Facing Corruption; Facing the Voters,” Yankton Press & Dakotan, 2017.04.17].

    If Senator Nelson uses Tuesday’s Mid-Central discussion to continue his vengeful assault on Rep. Schoenfish, he may not find back-up on the committee. Six of the seven other Republicans on the committee are reliable GOP mainstreamers who seem inclined to avoid in-caucus attacks on committee time; the seventh, Senator Neal Tapio, is too busy dreaming of federal office to pay attention to Nelson, Schoenfish, or GEAR UP. If Nelson turns to the two Democrats on GOAC, he’ll find Rep. Susan Wismer likely focusing her sharp accountant’s mind on the numbers, not the names, and Senator Billie Sutton balancing his duty to his District 21, where GEAR UP blew up, with his urge to moderation (and possibly the need to finish his McGovern Day speech announcing his run for Governor).

    Senator Nelson’s tough questions are a side reason to tune in to GOAC on Tuesday, April 25. The main reason is to listen to Auditor General Marty Guindon and read his report on what he has found in the dark, twisted accounts of the Mid-Central Educational Cooperative.

  • Schoenfish Bitter About Unspecified Critiques from Unnamed Critics

    Representative Kyle Schoenfish (R-19/Scotland) breaks from his usual mechanical recitation of bills and votes, bills and votes, to close his latest Legislative update with a rather bitter parting shot at… well… someone for… well… something:

    A few dishonest politicians and people attacked me over some issues before the last primary and general elections and the voters of District 19 gave a resounding rejection of those shameful attacks. They have continued to attack me through various means over the same issues recently but our job as legislators is to serve you the people and not to waste our time constantly criticizing those who disagree with our views and votes. We are a citizen legislature in South Dakota and legislators make great sacrifices so they can serve and make a difference. It has been very rewarding this last week to have received so much encouragement and support from legislators of both parties, state officials, friends, family and clients back home and across the state rejecting those recycled attacks. I will only use the meritless political attacks as motivation to continue to serve the best I can in public service and professionally [Rep. Kyle Schoenfish, “A Review and Response,” Mitchell Daily Republic, 2017.03.09].

    Voters of District 19 who may want clarification as to what shameful, meritless political attacks he was talking about were unable to query Rep. Schoenfish as to the source of his pique this weekend, since he skipped the wrap-up crackerbarrel held in his hometown of Scotland on Saturday. Kyle’s mom came to speak up for him, but that doesn’t quite count as “serv[ing] the best I can in public service and professionally.”

    Walter Schoenfish (center) gives Governor Dennis Daugaard (right) a tour of Schoenfish & Co., Inc.'s Parkston office, while Rep. Kyle Schoenfish (left) looks on adoringly. Photo from City of Parkston, 2014.08.27.
    Walter Schoenfish (center) gives Governor Dennis Daugaard (right) a tour of Schoenfish & Co., Inc.’s Parkston office, while Rep. Kyle Schoenfish (left) looks on adoringly. [Photo from City of Parkston, 2014.08.27.]
    It’s hard to say what has Schoenfish so irked. The only time his name popped into the headlines this Session was not at the hands of any “dishonest politician” (unlike some of Schoenfish’s other language, that phrase isn’t redundant). Schoenfish’s only major press time came from Angela Kennecke, who noted that the fatally scandalized Mid-Central Educational Cooperative is blaming Schoenfish’s accounting firm for not catching over $3 million in discrepancies in Mid-Central financial reports. Schoenfish seems not to have called Kennecke back yet about that story, but consultant Michael Wyland has at least argued that Mid-Central’s blame-the-auditor defense is unlikely to fly.

    Whatever Schoenfish is mad at, he should make up his mind on his response strategy. If his nameless critics aren’t worth mentioning, then he shouldn’t mention them or their critiques. If they are worth mentioning, then they (critics and critiques) are worth mentioning by name, in detail, and with a direct, succinct rebuttal consisting of simple facts. Instead, Schoenfish only throws a vague, whiny combo of “poor me!” and “awesome me!” that answers no questions.

  • Mid-Central Blames Schoenfish Accounting Firm for Missing GEAR UP Embezzlement

    In October 2015, shortly after Scott Westerhuis killed his family and himself to avoid facing the punishment for stealing millions from taxpayers via the GEAR UP program, I reported that the Mid-Central Educational Cooperative‘s financial reports showed discrepancies totaling over $3 million. Over the past year, I’ve asked how Parkston accounting firm Schoenfish and Company could have missed such obvious and enormous errors in its audits of Mid-Central’s books.

    Facing a multi-million-dollar class action lawsuit on behalf of Native American students allegedly cheated by the Westerhuises’ embezzlement of GEAR UP funds, the unwinding Mid-Central is now asking the same question by naming Schoenfish and Company as third-party defendants in the lawsuit:

    Mid Central says if it is found to be at fault, its fault is “slight in comparison to the fault of Schoenfish & Company.”  Mid Central says the accounting firm should have caught any missing money [Angela Kennecke, “SD Legislator’s Accounting Firm Named in GEAR UP Lawsuit,” KELO-TV, 2017.02.28].

    Dragging the accountants into the lawsuit matters in part because one of those accountants is Republican Representative Kyle Schoenfish of District 19.

    Rep. Kyle Schoenfish (R-19/Scotland)
    Rep. Kyle Schoenfish (R-19/Scotland) 

    KELOLAND News tried to reach Kyle Schoenfish Tuesday for comment.  We’ll let you know when we hear back from him.

    This isn’t the first time the accounting firm of Schoenfish & Company has been under scrutiny over not catching the misuse of GEAR UP funds.

    An independent group of citizens has prepared a list of ten questions it would like lawmaker Kyle Schoenfish to answer and has submitted them to the South Dakota Auditor General.

    They specifically ask about discrepancies in Mid Central’s balances and if Schoenfish ever reported them to anyone outside of Mid Central. We’ve posted those ten questions online on this story if you’d like to read them.

    KELOLAND News spoke with Randy Schoenfish, Kyle’s father who told me he cannot answer those questions due to client confidentiality [Kennecke, 2017.02.28].

    Hey: when your client sells you out and tries to make you foot the bill for a lawsuit, are you still bound by client confidentiality?

  • Graeff Pushing Ballot Measures, Calling for Schopp to Resign over GEAR UP

    My friend Russell Graeff is working hard to beat Stace Nelson in the District 19 Senate race. He continues to work the ballot measures for Election Day synergy by joining Bon Homme County Democratic Party chair Frank Kloucek for three public fora on our initiatives and referenda on Friday:

    1. 9 a.m.: Recreation Bar, Scotland
    2. 10:30 a.m.: Main Stop C Store, Scotland
    3. 2:00 p.m.: The Keg, Tabor

    Candidate Graeff is also reminding us that we still haven’t held anyone in Pierre accountable for the deadly GEAR UP scandal. He calls for Secretary of Education Melody Schopp to resign immediately:

    Little has happened to hold accountable those individuals tasked with oversight of the Gear Up program. Obviously the South Dakota Department of Education needs new leadership. We also need to recover those missing/misappropriated federal funds. Sad to say those lives lost won’t be able to be recovered.

    …Schopp dropped the ball on the whole Gear Up program. Her lack of oversight, accountability, and responsibility has left another black mark on South Dakota.

    …The lack of oversight, including the accounting firm who did the annual Mid Central Education Cooperative audits, should be thoroughly investigated as well [Russell Graeff, campaign press release, 2016.11.02].

    That last note about the accounting firm is a cross-ticket shot at reëlection-seeking Republican Rep. Kyle Schoenfish, whose Parkston accounting firm Schoenfish and Company conducted those audits and somehow failed to notice Scott Westerhuis’s multi-million-dollar shell game, evidenced by financial discrepancies that a casual blogging review of Mid-Central financial reports made obvious.

    Graeff evidently understands that ballot measures and corruption are key Democratic issues. We’ll see how well those issues stack up against Stace Nelson’s name recognition and noisy conservatism on Tuesday.

    Update 2016.11.04 08:15 CDT: Democratic District 19 House candidate Melissa Mentele informs me that, after a family-related absence from the campaign trail, she’s jumping back on the horse and coming to today’s ballot question fora as well!

  • Wek Withdraws; District 19 Democrats Seeking New House Candidate

    Democrats have a ballot slot to fill in District 19. Surprisingly, it’s not the Senate seat, where political newcomer Russell Graeff faces a tough battle against the Fulton Fulminator, the Marine Monster, the biggest Red pain in the SDGOP’s tuchus, Stace Nelson. No, the vacancy is on the House side, where soybean producer Ardon Wek has withdrawn from the race. The withdrawal must have just reached the Secretary of State’s office, which appears to have just today updated its candidate list (and frequent clickers, make sure you’ve updated your bookmark to SOS Page 178, the general election list, and not Page 177, the old primary candidates’ list!).

    Ardon Wek campaigning
    Waving goodbye… but he’s got a sign, a tractor—holy cow, Ardon! You’re loaded for bear! Reconsider! [from Facebook, 2016.07.04]
    Wek’s withdrawal surprises me, because Wek’s campaign for the House seat promised to be an easier climb than Graeff’s high hill against Nelson. Wek is the lone Democrat against two young, mild-mannered Republicans, Rep. Kyle Schoenfish and Rep. Kent Peterson. Wek has been out campaigning around District 19, looking like a serious candidate. He could easily have used his connections with the Soybean Processors and area producers, his age and life experience (Wek will be 59 on Election Day, while Peterson is 36 and Schoenfish will be 29), and frustration with Peterson’s big-CAFO-fronting for gubernatorially aspiring Rep. Mark Mickelson and dismay with Schoenfish’s failure to notice corruption at the Mid-Central Educational Cooperative to win one of the two House seats by being everyone’s second choice.

    On the bright side, it may thus be easier to convince a new Democrat to jump in and fill that vacancy than it would have been to find a replacement for Graeff. Peterson and Schoenfish both have weaknesses that a smart campaigner could use to her or his advantage. Then again, if a Democrat rises to the challenge, the GOP establishment is far more likely to pour money into helping pliable party boys Peterson and Schoenfish keep their seats than they ever would ride in to help Stace Nelson return to Pierre. (Dang, Russell! Maybe you could even get Republicans to give you some money to beat Stace! Just don’t let them turn you to the Dark Side!)

    Graeff himself tells this blog that he is still a candidate and is eager to find a replacement for Wek. District 19 Democrats have apparently already begun some conversations with possibilities, but the door is open for any new, ambitious Democrat to step up, fill the gap, and maintain the opportunity for a little synergy between the remaining Democratic Senate candidate and a good House candidate.

    The deadline District 19 county party leaders to name a replacement for Wek is August 9.

    Note that Wek is not required to publicize any reason for his withdrawal. Had the 2015 Legislature had its way, District 19 Democrats would not have been able to replace Wek unless he gave the Secretary of State a note from his doctor saying he was too sick to serve, was appointed to or nominated for some other conflicting office or job, or moved out of District 19. Luckily, our successful referral of that law (Senate Bill 69; now Referred Law 19 on the ballot) spared Wek and his fellow District 19 Democrats that intrusive hassle. You’re welcome!

    Also withdrawn and awaiting replacement: Democrat Chuck Groth from the District 22 Senate race and Democrats Betsy Lang of 12 and Tony Pier of 14* from their House races…*Correction 2016.07.23 10:32 CDT: Pier has been replaced, of course, as Ken Santema reminds us below, by J.R. LaPlante, whom I should have remembered from Convention in Sioux Falls and who is out campaigning hard! Sorry to leave you out, J.R.! So that leaves three Democratic Legislative race vacancies to fill.

  • Osborn Cries “Fraud” on District 19 Opponents’ Fake Newspaper

    District 19 Republican candidate for House ReGina Osborn is robocalling GOP voters across her district to alert them to what she calls “fraud” by her primary opponents:

    We also need to discuss the fraud that has been committed against us all. Some of you have received the James River Republican Newspaper Special Edition. It’s a fraud created by the three young candidates to fake Republican support for themselves to fool you. I think we can agree—disgusting and disqualifying conduct to say the least. Please tell your neighbors, friends, and family about this so they are not fooled by this fraud [my transcription; ReGina Osborn, robocall, distributed 2016.06.06].

    Osborn concludes the call by urging voters to pick her for House and her “fellow veteran” Stace Nelson for the Senate “We may be gray and mature and blunt-speaking,” she says, “but we are honest and we will serve you, not the tax-and-spend establishment.”

    Yesterday I dissected the fake newspaper from Obsorn’s incumbent Republican opponents Rep. Kent Peterson and Rep. Kyle Schoenfish and their Senate-aspirant compadre Caleb Finck. I’m not sure if I’d use the word “fraud,” but the Peter-fish-Finck flyer certainly makes an effort to look like the regular newspaper. I’m hearing that readers and even some newspaper folks are alarmed at the young trio’s use of “the Editor” as a byline amidst otherwise anonymous content (which ranges from sloppily fallacious to simply false). But “fraud”—that’s a fightin’ word! Have Peterson, Schoenfish, and Finck committed fraud by creating the illusion of some sort of editorial endorsement for their paid views? Or does their teeny-print disclaimer at the bottom of the back page excuse them from any repercussions?

    District 19 voters, if you haven’t early voted, you have 27.5 hours to decide.

    Bonus Campaign Finance Minutiae! At the end of yesterday’s post, I asked readers to consider whether Peter-fish-Finck’s advocacy for NO votes on all ten ballot measures triggered an obligation for them to file Independent Expenditure reports under SDCL 12-27-16. It turns out I was asking a trick question. The issue isn’t the nature of the communication—did they really advocate voting NO, or did they use enough weasel language about “it’s harder and harder to argue with the people who suggest we JUST VOTE NO” to avoid actually telling people how to vote?—but of the communicators. The flyer was paid for by the three legislative campaign committees. SDCL 12-27-16 applies only to “persons” and “organizations.” By statutory definition (SDCL 12-27-1) “organizations” do not include political committees or political parties. Legislative candidates can thus use their campaign funds to publish anything they want about the ballot measures (as Peter-fish-Finck do) and other candidates (as Osborn does in telling neighbors to vote for Stace) without having to file independent expenditure reports within 48 hours of publication.

    Update 17:10 CDT: To clarify why Osborn calls the James River Republican a fraud, here are images of pages 2, 3, and 4 of the fake newspaper:

    Peterfish self-endorseFinck self-endorse Back page JRR disclaimer

    Our Endorsements…” “Why do we like….” Only if you flip to the back and squint at the smallest, faintest print on the document do you see “James River Republican is paid for by Finck for State Senate, Kyle Schoenfish for House, and Kent Peterson for District 19” and learn that these three fellas are talking about themselves.

  • Peterson, Schoenfish, Finck Jump in Mental Muck Together on Ballot Measures

    A Republican campaign guru said something earlier this campaign season about how newsletter inserts in the local paper are a waste of campaign funds. (My third campaign newsletter will appear in the Aberdeen American News later this month—stay tuned!)

    That guru must be apoplectic over his own District 19 GOP favorites’ ignoring his advice and wasting monumental sums on a full four-page insert masquerading as the James River Republican in the latest Emery Enterprise and Alexandria Herald:

    clip from "James River Republican" campaign newsletter, June 2016
    clip from “James River Republican” campaign newsletter, June 2016

    The newsletter appears to be paid for by the District 19 GOP wonderkids: incumbent Rep. Kent Peterson of Salem, incumbent Rep. and arguably myopic Mid-Central Educational Cooperative auditor Kyle Schoenfish of Scotland, and Governor Dennis Daugaard’s favorite newcomer Caleb Finck of Tripp. All three stand in Tuesday’s primary against arguably more conservative challengers.

    I’m still waiting to obtain a complete copy of this gem, but none of the clips I’ve seen bear a complete byline. Whoever wrote this GOP mainstream rag thinks the most valuable use of their front page real estate is not “VOTE FOR THESE GUYS” but a lengthy ramble about the merits of the Electoral College, the U.S. Senate, and federalism. I appreciate a good civics lesson, fellas, but I guarantee you, nothing on that front page adds a vote to your column.

    Elsewhere, the newsletter turns to ballot questions, wherein we learn you won’t learn the facts about ballot measures from Republicans:

    clip from James River Republican campaign newsletter, June 2016
    clip from James River Republican campaign newsletter, June 2016

    “JUST SAY NO on everying,” says the nameless Editor, who apparently didn’t edit much.

    Peterson, Schoenfish, and Finck attack all ten ballot measures not by discussing the details of each measure and the faults therein. Instead, they encourage reactionary do-nothingness (oh, right, these are Republicans) by advancing the thesis that out-of-state groups are duping South Dakotans into passing laws that the Legislature hasn’t reviewed.

    Peterson, Schoenfish, and Finck drop so many Buridanian haystacks of fallacy that I almost can’t pick where to start munching. Almost.

    Out-of-state groups have pushed some unwise ballot measures in South Dakota. But they haven’t enjoyed much success: South Dakotans soundly defeated the two examples offered, legalization of medical marijuana and the whacky, Cliven-Bundyesque JAIL amendment. (To the best of my knowledge, no South Dakota ballot measure has ever sought to “legalize drugs”… and I am open to correction from Bob Newland and other experts on just how much out-of-state support was behind the 2010 and 2006 medical marijuana measures and the 2002 industrial hemp measure.)

    Initiated Measure 21, the real 36% rate cap on this year’s ballot, is not the product of an out-of-state group. The sponsors and heads of South Dakotans for Responsible Lending are Sioux Falls men Steve Hildebrand, Steve Hickey, and Reynold Nesiba. Of the roughly $28,200 in campaign contributions reported on South Dakotans for Responsible Lending’s 2015 year-end and 2016 pre-primary reports, $2,200 has come from out-of-state donors, and $2,000 of that “imported” money came from former South Dakota Senator Tom Daschle in Washington, D.C. North Carolina’s Center for Responsible Lending has provided over $5,800 in consulting as an in-kind contribution, but that hardly looks like an outside group dominating the drive to cap interest payday lending rates at 36%.

    Initiated Measure 22, the Anti-Corruption Act, is spearheaded by Sioux Falls businessman Rick Weiland. (I guess to these District 19 boys, Sioux Falls feels like another state rather than the home of a quarter of the people they serve in Pierre.) His South Dakotans for Ethics Reform Committee has gotten all of its actual $228,500 in campaign cash from Represent Us, which oh-my-Gaia is based in Massachusetts. Boom! Out-of-state funders! Must be evil! Take your state ethics commission, lobbying reform, campaign finance limits, and voluntary public campaign finance system and pahk ’em in Hahvahd Yahd!

    Of course, if Peterson, Schoenfish, and Finck were really trying to make a case against the evil of out-of-state ballot measures, they’d have focused on the most glaring examples on this year’s ballot. IM 22 may have out-of-state backers, but they were set in motion by South Dakotan Rick Weiland, who recognized the need for reforms, talked with lots of South Dakotans about options, picked a couple, and then went looking for funding. Peter-fish-Finck can stage a much bigger foreign freakout over Amendment S, the duplicative crime victims bill of rights. The entire text of that ballot measure as well as nearly every dollar of the over $792,000 poured into that ballot question (year-end, pre-primary) has come from one man, California billionaire Henry T. Nicholas.

    Likewise for Amendment U, the fake 36% rate cap. This deliberately deceptive ballot measure, a blatant attempt to use our initiative laws to undermine the genuine, grassroots Initiated Measure 21, has received nearly all of its $2.43 million (Furlong year-end, pre-primary; Thuringer year-end, pre-primary) from one source: Select Management Resources, Rod Aycox’s Georgia-based payday lending corporation. (By the way, the third committee created to fight the real rate cap, consisting of Pierre lobbyists Brett Koenecke and Doug Abraham, terminated itself May 24.)

    If out-of-state involvement in ballot measures is an offense, Peter-fish-Finck would be spotlighting the worst offenders. But that would also mean spotlighting one of their best Republican buddies, Pierre-based GOP consultant Jason Glodt, who is fronting Henry T. Nicholas’s vanity project in South Dakota.

    The District 19 boys’ failure to discuss the Nicholas/Glodt Amendment S shows their failure to think through their argument on two other fronts.

    Reread their penultimate paragraph, where they say we need to “take a far more critical look at all these laws that people are attempting to pass that have not gone through the state legislature.” I’ve already noted that Peter-fish-Finck aren’t taking a critical look at all these laws; they are taking a misleading glance at two of the ten. But then they add this remarkable criterion that a ballot measure lacks merit if it has not first been reviewed by the Legislature.


    • Initiated Measure 21 exists specifically because former legislator Steve Hickey tried more than once to get the Legislature to pass reasonable restrictions on payday lending. When the payday lenders offered to support a compromise bill and then reneged, Hickey turned to the initiative process.
    • Initiated Measure 22 includes a state ethics committee. Rep. Peggy Gibson has tried multiple times to get the Legislature to restore the state ethics commission, to no avail.
    • Amendment T would end gerrymandering with an independent redistricting commission. Former legislator Bill Thompson and others have offered multiple redistricting reforms, all of which have been killed by a Republican majority heck-bent on keeping its map advantage.
    • Initiated Measure 23 would allow unions to collect “fair-share dues” from non-members whom the law requires unions to represent in collective bargaining. Rep. Patrick Kirschman brought a similar proposal before the Legislature in 2009, only to see it defeated.
    • Amendment R is on the ballot because the Legislature put it there.

    “all these laws… that have not gone through the state legislature”?! Heck—five of the eight initiated measures that Peter-fish-Finck want us to reject out of hand have had legislative review.

    The clearest example of a measure coming out of nowhere, with no legislative consideration, is the Nicholas/Glodt Amendment. I’ve argued previously that if there really were gaps in victims’ rights, local advocacy groups and prosecutors would have brought those gaps to the Legislature’s attention, and legislators eager for a passable softball would have jumped at the chance to sponsor such a feel-good measure. No such noise has arisen. Nicholas and Glodt have blindsided the Legislature and the public with a measure no one not on Nicholas’s payroll has been crying for.

    When these three District 19ers cry “Legislature first!” they either don’t know the history of these issues or are simply grasping for arguments that they haven’t really thought through.

    Finally, crying “JUST SAY NO” is not the “critical look” Peterson, Schoenfish, and Finck ask for. It’s the frustrated cry of sub-par candidates with an allergy to critical thinking. Ballot measures aren’t drugs, Nancy—they are policy proposals that each deserve serious analysis and votes. Peter-fish-Finck can’t even exert the mental muscle to craft a position that tackles the measures they oppose without undermining the measures their party pals want. By crying “NO×10,” Peter-fish-Finck show they didn’t get the memo from their party buddy Jason Glodt that Amendment S is a good thing. They do my devious Democratic bidding by telling people to vote down Referred Laws 19 and 20, the Incumbent Protection Plan and youth minimum wage that their GOP leaders passed out of partisan snark in 2015. They help me out by knocking down the payday lenders amendment that could protect their industry buddies from our Sandersesque urges once and for all. Crying NO×10, far from clever strategy, only grates your pals’ cheese, spots me four big wins, and lets me focus on prying away just enough votes on the other issues to advance the Democratic agenda.

    Look, if you guys just don’t want to think about the issues and prefer just to grunt NO on everything, that’s your business. But don’t burn up good newsprint with flimsy, false attacks that encourage the rest of the electorate to adopt your obfuscatory incuriosity.

    Now, how can I boil all that down for my next simple, cost-effective, single-page campaign newsletter?

    Bonus Campaign Finance Challenge! I invite readers and the Secretary of State to discuss whether Peterson, Schoenfish, and Finck need to file an Independent Expenditure statement (within 48 hours of publication!) in accordance with SDCL 12-27-16 for issuing a political communication that expressly advocates against multiple ballot questions.

  • GEAR UP/Mid-Central: What Shoes Drop Next?

    In his Platte press conference yesterday, Attorney General Marty Jackley said the charges he was bringing against Dan Guericke, Stacy Phelps, and Stephanie Hubers (Guericke and Phelps: conspiracy and falsification of evidence; Hubers, grand theft) were “initial” charges. The conspiracy charges refer to Guericke, Phelps, the deceased and accused embezzlers Scott and Nicole Westerhuis, and “other unknown co-conspirators.” In her February 16 interview with DCI agents, Hubers, who took illegal payments from Scott Westerhuis from 2009 through 2014 totaling $55,339.49, alleges that two assistants received similar illegal payments. According to Hubers, one assistant asked for more money, and Scott Westerhuis acquiesced to keep that assistant from squealing to Guericke.

    Attorney General Jackley has more leads to follow and more shoes to drop. On whom migh those next shoes fall?

    Other Mid-Central staff? The top three business personnel in the Platte office have been implicated in theft of hundreds of thousands, perhaps a million dollars. If the Westerhuises weren’t dead, they could both have face charges of aggravated grand theft, the highest classification of theft, a Class 2 felony worth up to 25 years in the pen. Hubers says Scott Westerhuis gave her stolen money laundered through his GEAR UP-managing corporation AIII because he felt “she was worth more than what MCEC was paying her” (DCI Special Agent Brett Spencer’s words, Probable Cause AffidavitState v. Hubers, paragraph 44). Hubers’s statement implicates two other Mid-Central staffers; might the Westerhuises have sprinkled more of their sizable ill-gotten gains to other Mid-Central staff to win goodwill and tamp down questions?

    Other AIII staff? Unless Stacy Phelps was handling all the books for the American Indian Institute for Innovation himself, someone else had to be processing the illegal transfers from Mid-Central. Scott Westerhuis acted as chief financial officer for AIII, but their 2013 Form 990 lists the following board members and employees:

    AIII 2013 Form 990, board and top-paid staff
    AIII 2013 Form 990, board and top-paid staff

    One would imagine that if DCI hasn’t already included the above AIII players in its 65 witness interviews, those folks will be hearing knocks on their doors shortly.

    Rick Melmer? Rick Melmer drew big dollars from Mid-Central for still unspecified work on GEAR UP and when pressed gave shaky answers about those payments. Guericke’s charges include falsifying Mid-Central’s contract with Melmer just two days before the state canceled Mid-Central’s GEAR UP contract and just three days before Scott Westerhuis allegedly torched his embezzlement-funded house and killed his family and himself. In the somewhat Swiss-cheesy narrative of his probable cause affidavit on Guericke, Special Agent John Barnes does not nail down Melmer’s involvement in backdating his contract. The charges say that Scott Westerhuis sent an e-mail to Melmer on September 14, 2015, at 3:37 a.m. (Westerhuis apparently wasn’t getting much sleep that week) saying, “Hi, Rick, this is what the original one would have looked like.” Melmer replied at breakfast:

    excerpt, Special Agent John Barnes, Probable Cause Affidavit, State V. Guericke, 2016.03.10.
    excerpt, Special Agent John Barnes, Probable Cause Affidavit, State v. Guericke, 2016.03.10.

    That e-mail seems to walk Melmer to the edge of awareness of, if not participation in, the conspiracy. He didn’t like what he was hearing from Westerhuis, but the text only indicates that he was concerned that Mid-Central couldn’t find the original contracts, not that he felt he was being asked to help create a bogus, backdated contract. Special Agent Barnes does not say Melmer signed anything on September 14. Even if he did, he might not face charges: former Mid-Central board chairman Lloyd Persson signed the bogus contracts a few hours after the Westerhuis-Melmer exchange, and Jackley indicated at yesterday’s presser that Persson won’t face charges.

    But recall the bigger picture. Melmer rolled the first marble into the whole GEAR UP/Mid-Central/AIII Mousetrap when, as Mike Rounds’s Secretary of Education, he steered GEAR UP responsibilities back to his home folks in Platte. Instead of keeping a big important federal grant under close supervision in Pierre, Secretary Melmer thought it would be a good idea to move supervision of those millions of dollars 135 miles away from the capital, to a co-op designed to provide special education services to small neighboring school districts which now would coordinate a statewide outreach program for Native American students. Farming GEAR UP out to Mid-Central wasn’t criminal, but it allowed Scott Westerhuis to hatch a criminal enterprise in which a number of people, possibly including Melmer himself, got tax dollars that they didn’t earn.

    Keith Moore? Mike Rounds’s past director of Indian education and the current head of the South Dakota Fellowship of Christian Athletes figures in the Guericke charges just like Melmer: Guericke allegedly conspired to backdate Moore’s contract with Mid-Central just like Melmer’s to comply with the state audit in September 2015. The charges and affidavit provide no e-mails or other details from Moore. But like Melmer, Moore cashed in on Mid-Central contracts and gave vague answers about the work he did. Like Melmer, Moore failed to submit some work logs (an alarming fact that Bob Mercer reported way back in May 2015, before any of the rest of us were paying attention). Melmer and Moore said they were never asked to fill out work logs, which sounds exactly like what Stephanie Hubers says in paragraph 56 of Special Agent Brett Spencer’s affidavit: “Your affiant asked if Hubers had to fill out effort logs and she said that she did not. Hubers says she was never asked to fill out effort logs.”

    Melody Schopp? Our current Secretary of Education has said she saw “incompetence” in Mid-Central’s bookkeeping in 2012. She responded with “technical support.”

    The GEAR UP/Mid-Central/AIII criminal enterprise went on for at least ten years. Secretary Melmer and Secretary Tom Oster apparently noticed nothing. Secretary Schopp didn’t notice anything fishy until her second year in office. She didn’t cut Mid-Central off until three years later.

    Rep. Lance Russell called on Secretary Schopp to resign back in November over her lack of oversight. We now have the Attorney General confirming that that lack of oversight cost the taxpayers as much as seven figures. Whatever further questions the Attorney General may have for Secretary Schopp and her staff, the primary question taxpayers and the Governor should have for Secretary Schopp is, “Why are you still drawing a state paycheck?”

    The PAST Foundation? This Ohio-based organization is among the numerous players in AIII’s long-standing scheme to build an American Indian boarding school focused on STEM education. The PAST Foundation received the third-largest chunk of GEAR UP funds from Mid-Central during the last two years of the scam. The PAST Foundation, headed by USD grad Annalies Corbin, has also worked on Mid-Central’s Teacher Quality grant program and the South Dakota Innovation Lab. The PAST Foundation, like every other big-money Mid-Central partner, should now face serious scrutiny as the Attorney General tries to nail down where every dollar that passed through the Mid-Central office went, how many of those dollars went for legitimate expenses, and how many of those dollars went to friends of Scott for no good purpose.

    Auditors? Eide Bailly took a very narrow look at Mid-Central’s GEAR UP ledger last fall and found nothing wrong. Schoenfish and Company of Parkston (where Rep. Kyle Schoenfish works) audited Mid-Central’s books for at least eight years. Neither organization blew any whistles about the blatantly obvious misalignment of monthly ending and beginning balances that went on for at least nine years and that appear to be the central evidence of the Westerhuises’ embezzlement.

    I’m sure you readers can identify numerous other GEAR UP/Mid-Central players who may figure in the big picture of the vast Westerhuis scheme. Let us hope Attorney General Jackley continues to talk to those players and assemble the complete narrative of what went wrong in Platte and in Pierre.