• Tag Archives Melody Schopp
  • Schopp Leaving Education Dept. December 15

    Governor Dennis Daugaard announced yesterday that Education Secretary Melody Schopp will retire on December 15 after nearly 40 years in public education.

    GEAR UP on Gold Watch
    On Schopp’s watch.

    Senator Jim Bolin (R-16/Canton) expresses surprise that Schopp isn’t staying on through the final year of the Daugaard Administration, but GOAC chair Senator Deb Peters (R-9/Hartford) says she’s (SDPB’s Lee Strubinger’s words) “been talking about retirement with Schopp for a couple of years.” Indeed, over the past couple of years, many of us have discussed the prospect and propriety of “retirement” or some less pleasant synonym for Schopp’s departure following her stunning lack of oversight over Mid-Central Educational Cooperative’s mismanagement of the GEAR UP grant, which became a decade-spanning criminal enterprise leading to millions of misdocumented if not misused dollars, a fire and six deaths, and a lack of solid evidence showing that the state managed to deliver the intended, lasting educational benefits to the American Indian students the GEAR UP grant was meant to serve.

    But hey, after thirty years of seeing South Dakota at the rock-bottom of the national rankings for teacher pay, she did help lobby for a sales tax increase that may have boosted our teacher pay from 51st in the nation to 50th. Well done.



  • DLA Finds Two Small Errors in Schopp’s GEAR UP Testimony to GOAC

    Once the Government Operations and Audit Committee gets done grilling anyone from Tri-Valley who dares show up to talk about its possibly illegal laptops-for-enrollment scheme, the committee will turn to its most heavily documented and thus far most time-consuming topic, the GEAR UP/Mid-Central scandal. The newest document posted to the GOAC webpage for today’s meeting is this big PDF labeled gently, “Follow-up Information from DLA.” This document, submitted by state government audit manager Tim Flannery from the Department of Legislative Audit, responds to questions offered by GOAC at its August 29 on four topics. In its GEAR UP responses, the Department of Legislative Audit finds Secretary of Education Melody Schopp and her attorney Paul Bachand got a couple points wrong in their summer statements to GOAC.

    DLA observes that, contrary to Schopp/Bachand’s statements, the validity of the use of Microsoft software to fulfill the matching requirements for the GEAR UP grant remains in doubt:

    DLA noted no records of use for this software in an audit finding in both SFY14 and SFY15, with report dates of 2/25/15 and 3/21/16, respectively. In Paul Bachand’s response to GOAC dated 8/22/17 he indicates that records for use of this software were destroyed in the fire. Since DOE still had no records on file at the time of the fire (9/16/15), it is apparent DOE did not increase monitoring activities in this area after it was noted in DLA’s 2/25/15 report.

    In Paul Bachand’s response to GOAC dated 8/22/17 he indicates DOE provided 2015 summer honors program syllabus to USDOE as evidence that the Microsoft software was used. DLA’s special review dated 5/19/17 indicates that, although Microsoft Programming was a part of the summer program, DLA could not verify that this software was used in the program [Paul Flannery, DLA to GOAC, 2017.10.03].

    In August, Secretary Schopp told GOAC she did not become aware of the suspicious dual position of Nicole Westerhuis in the GEAR UP management web until she reviewed DLA’s special Report and Audit of Mid-Central in May 2017. DLA says Schopp must not be checking her e-mail:

    This was noted in our audit finding 2015-003 of DLA’s FY2015 Statewide Single Audit which was provided to DOE for their response which was received back on 2/8/16 via email with CC to Dr. Schopp, and finally the finding and response was included in the FY2015 Statewide Single Audit with a report date of 3/21/16 [Flannery/DLA to GOAC, 2017.10.03].

    To Schopp’s credit, DLA notes that Schopp’s diagram of monitoring procedures imposed on Mid-Central back in 2012 appear to have no inconsistencies with GEAR UP project director Roger Campbell’s April and August 2012 e-mails on the subject.

    DLA also appears to suggest Schopp/Bachand may be underplaying the amount DOE and Mid-Central paid Keith Moore for his consulting on federal grants. Bachand’s September response to a question about Mid-Central’s GEAR UP “advisory board” says Moore was paid $36,000 from August 2012 to May 2013. DLA confirms those numbers but provides a fuller list of $68,000 in GEAR UP stipends and $3,881.11 in travel and “laptop presenter stipends” for GEAR UP and College Access grants from 2008 through September 2015, when the whole Mid-Central scheme collapsed.



  • Bachand Gives GOAC Kuhn Contracts, Hides Info About Who Else Knew of GEAR UP Corruption

    In his 322-page document submitted September 28, attorney Paul Bachand does get around to responding to the thirteen questions the Government Operations and Audit Committee sent to his client, Education Secretary Melody Schopp, to follow up on her previous testimony on the GEAR UP scandal.

    The document dump includes seven contracts issued by the Department of Education to consultant Brinda Kuhn. The contracts span 2008 through 2011:

    • January 1—December 31, 2008: $65,000, to evaluate GEAR UP.
    • September 1, 2008–August 31, 2009: $25,000 for salary, $5,000 for travel, plus $25,000 in matching funds, to “provide a formative and summative evaluation.”
    • January 1–December 31, 2009: $54,000 for salaries, $11,000 for travel, plus $54,000 in matching funds, to evaluate GEAR UP.
    • February 1, 2009–September 30, 2010: $6,500 plus $1,500 for expenses, to write an application for the Indian Land Tenure Grant.
    • September 1, 2009–August 31, 2010: $25,000 for salary, $5,000 for travel, plus $25,000 in matching funds, to provide formative and summative evaluation for the College Access Challenge grant.
    • January 1–December 31, 2010, with option for two 12-month renewals: $65,000 to evaluate GEAR UP.
    • January 1–September 30, 2011: $65,000 to evaluate GEAR UP. In administrative inertia, the contract signed by Kuhn on January 14, 2011, and by DOE on January 23, 2011, still listed LuAnn Werdel as the state’s contact person for the contract, even thought then-new Education Secretary Schopp had canned Werdel on January 10, 2011.

    Kuhn probably didn’t pocket all of that listed $374,500 in salaries and matching dollars over those three years. In her October 16, 2009, proposal to secure the GEAR UP evaluation gig again, Kuhn listed three staff members—Angela Sam, Christopher Peters, and Melita York. But Kuhn’s consulting office enjoyed multiple revenue streams during that period, including evaluation gigs for Oglala Lakota College and Fairmont State University.

    Bachand’s response gives a few other GEAR UP dollar figures. Noting information already published in the Mid-Central Educational Cooperative financial reports and Eide Bailly’s Forensic Accounting Report, Bachand says three men—former GEAR UP project director Keith Moore, former Education Secretary Rick Melmer, and (former Rosebud Tribal Chairman?) Rodney Bordeaux—collected a total of $79,000 for serving on the “GEAR UP Advisory Board,” which, according to Keith Moore, served to help Mid-Central manage GEAR UP and use political connections to boost grant activities.

    Bachand dodges two GOAC questions that seek more information about who might have known what when in the GEAR UP scandal. Asked to say who besides Office of Indian Education directors LuAnn Werdel and Roger Campbell may have “expressed concerns of improprieties or wrong doings of the grants handled by Mid Central or any other related organizations,” Bachand vaguely refers to “staff” questioning payment requests, then says, “Nothing further will be added to the answer previously given.”

    Asked again for “memos and emails” documenting “conflicts of interest and related parties” that supported DOE’s decision to cancel Mid-Central’s GEAR UP contract in September 2015, Bachand shuts the door:

    Communications with the Governor or his staff are privileged. Emails and memos are privileged. Documents prepared in anticipation of litigation or in response to litigation are privileged. Communications with legal counsel are privileged [Bachand to GOAC, 2017.09.28, p. 3].

    Communications with the Governor? Should we consider it significant that the Governor’s office was in the loop on the rather long decision-making process that led to cancelling Mid-Central’s contract? Did Secretary Schopp really need higher executive approval or guidance to cancel a contract that she had known for more than three years was being mismanaged?

    The Government Operations and Audit Committee will meet Thursday and possibly Friday in Sioux Falls at Carnegie Town Hall to discuss these answers and more about the GEAR UP/Mid-Central Scandal. With no requested witnesses agreeing to come testify in person, committee members will mostly talk amongst themselves about how satisfactory they find these written answers.



  • In Refusal to Appear Before GOAC, Schopp Asserts Executive Authority over Legislature

    On September 12, the Government Operations and Audit Committee asked Education Secretary Melody Schopp to attend its October 5–6 meeting and answer thirteen queries following up on her prior responses to GOAC’s investigation of the GEAR UP/Mid-Central scandal:

    1. Please explain the process used to apply for both the first and second GEAR UP grants.
    2. How were these grants built into the State budget process?
    3. The South Dakota Department of Education (SDDOE) made payments to BC Kuhn from July 2008 to September 2011. What were these payments to BC Kuhn for? If these payments were for contractual services please provide copies of the related contracts.
    4. Please provide the names of your supervisors from the first day of your employment with the SDDOE until the date of your appointment as Secretary in January 2011.
    5. Prior to being appointed as Secretary, you indicated your involvement with the GEAR UP program was minimal. Please explain what that means.
    6. In the Committee’s letter to you, dated August 4, 2017, we asked for memos and emails in support of your decision to terminate the subaward agreement with Mid Central. We are interested in the documentation as it relates to conflicts of interest and related parties. Did you report your concerns about conflicts of interest and related parties to the Governor or the Governor’s Chief of Staff?
    7. In April 2012 you received an email from Roger Campbell of his concerns about the GEAR UP program. In your testimony to the Committee you indicated that in April 2012 the SDDOE implemented an online system for submitting GEAR UP documentation and that invoices began to be reviewed on a random sampling basis. Was this done in response to Mr. Campbell’s concerns?
    8. Who appointed the GEAR UP Advisory Board for the second GEAR UP grant?
    9. Please provide a list of those individuals serving on the GEAR UP Advisory Board for the second GEAR UP grant and how much each member was paid.
    10. In your testimony to the Committee on July 24, 2017 you indicated LuAnn Werdel was released from employment because of a change in administration. In your written response to Committee questions, dated August 22, 2017, you indicated you asked Ms. Werdel to resign for personnel issues. Please clarify the reason for Mr. Werdel’s resignation and provide any documentation relating to her resignation.
    11. In the Committee’s letter to you, dated August 4, 2017, we asked for persons other than LuAnn Werdel and Roger Campbell that expressed concerns of improprieties or wrong doings of grants handled by Mid Central or any other related organizations. You did not answer this question in your response dated August 22, 2017. Please provide this information.
    12. When asked how many Native American students went to college during the last 12 years of the program, you could only tell lawmakers that number was 285 for the most recent school year. How many of those 285 students went on to college specifically and primarily because of the GEAR UP program?
    13. Please provide the annual GEAR UP evaluation reports prepared by other parties over time [GOAC to Secretary Schopp, 2017.09.12].

    In his September 28 response on behalf of Secretary Schopp, attorney Paul Bachand opens with this desk-pounding restatement of the executive branch’s preferred narrative:

    I appreciate that these are good faith efforts to clarify earlier answers. It is my hope that these facts will help certain committee members who have been repeating untrue claims or conspiracy theories relating to this matter.

    • No GEAR UP money was embezzled.
    • There is not $62 million that is missing or was misspent.
    • The U.S. Department of Education has been kept fully informed about this matter, including receiving copies of audits and reports.
    • And, most egregiously, there is no evidence to support the offensive conspiracy theory that the deaths of the Westerhuis family were anything other than a murder-suicide, as professional criminal investigators have found.

    Based upon my advice, no SD DOE staff will appear at the October GOAC hearing with regard to this matter. Furthermore, because of the pending civil litigation and upcoming criminal trials, I have advised SD DOE against answering any further questions at this time. I believe the committee has what it needs at this time to consider proposals for legislation relating to this matter, and I need to protect the state’s interests in the civil proceedings [Attorney Paul Bachand for Secretary Melody Schopp to GOAC, 2017.09.28].

    Wow, the nerve!

    I indulge Bachand and DOE in their arrogant distraction by leading with Bachand’s lead. But it is worth looking at GOAC’s latest round of questions and Bachand’s opening response to them to see how hard the Department of Education is working to keep the Legislature or the press from focusing on the corruption that South Dakota state government let happen. Consider:

    1. GOAC’s 13 questions don’t inquire about embezzlement specifically; in fact, they go far beyond that specific crime.
    2. GOAC’s 13 questions don’t inquire about the $62 million spent on GEAR UP in South Dakota or any sub-sum that may be missing.
    3. GOAC’s 13 questions do not inquire about the extent to which DOE has updated federal officials on the GEAR UP scandal.
    4. GOAC’s 13 questions do not inquire about the Westerhuis family’s grisly deaths or imply any murderous conspiracy.
    5. Bachand is now taking the position that a Governor’s political appointee and the employees of her state agency can refuse to provide information to a legislative committee.
    6. And just to ice the cake, Bachand, an attorney for the executive branch, is presuming to tell the legislative branch what and how much information they need to legislate.

    If I were a legislator interested in checks and balances, I’d be mad. If I were a committee chair listening to a witness open with the above statement, I’d gavel him silent at sentence #3 for not responding to the specific questions asked. If the witness persisted with his assertion of executive authority over legislative jurisdiction, I’d gavel him down again: “The Legislature will decide what information it needs to legislate, and you will provide the information we decide we need. Now, to Question #1….”

    But that’s why Bachand is telling Schopp and other DOE staff not to appear in person before GOAC, because in person, legislators would not tolerate such arrogant disregard for legislative authority.

    Of course, that assumes that we have any legislators willing to fully assert their authority and independence from an executive branch that seems to have pretty effectively set the Legislature’s agenda for years.

    Coming up next: I’ll get past Bachand’s bluster and see what new information we get from the responses and documents he sent to GOAC last Thursday.



  • No One Wants to Talk to GOAC in Person This Week About GEAR UP

    The Government Operations and Audit Committee has asked numerous principals in the GEAR UP scandal to come answer questions at its October 5–6 meeting. A few are providing written answers, but those responses indicate none will show their faces before the committee Thursday or Friday in Sioux Falls.

    GOAC asked former Mid-Central Educational Cooperative chairs Pam Haukaas and Lloyd Persson to come explain their board’s oversight of the GEAR UP grants, including answering simple questions like, “Who appointed the GEAR UP Advisory Board?” and whether Mid-Central’s director, business manager, or auditor ever presented annual audit reports to the board. On September 22, Sioux City attorney Ryland Deinert replied for Persson and Haukaas and said that, due to pending litigation, no one from Mid-Central’s board will answer any GOAC questions, in writing or in person.

    GOAC asked Rick Melmer, the former Education Secretary who steered GEAR UP to his hometown coop and made good money consulting for Mid-Central, to come explain his role in the GEAR UP grants and provide a timeline of his work for Mid-Central. Melmer wrote back on September 24 that he won’t visit GOAC in person, but he did provide written answers. Melmer said the state applied for the first GEAR UP grant in 2005 to bolster the summer honors program at School of Mines for American Indian high school students. Melmer says he was not involved in applying for second GEAR UP grant in 2011, but Mid-Central director Dan Guericke brought him aboard in 2012. Melmer details the contract work that I reported back in 2015:

    Dan Guericke, director of Mid-Central Educational Cooperative (MCEC), asked me to be involved during the 2012–13 year to provide technical assistance on issues related to GEAR UP and the other programs (i.e. College Access Challenge Grant) that focused on the academic needs of Native American students. This assistance included regular correspondence with the director on questions or issues that may arise related to the grant and the discussion and formation of an Advisory Board that would assist in the coordination of programs designed to improve educational opportunities for Native students. In 2013–14 I began a two-year employment with MCEC and worked on three contracts. The largest contract was with the Council of Chief State School Officers (CCSSO) which involved work on the Cross-State Learning Collaborative Project. A second contract was with the Board of Regents in South Dakota (SDBOR). That contract involved working with the statewide teacher residency program and a leadership development program designed for K-12 building principals. The third contract was with GEAR UP where I chaired an Advisory Board that met monthly. The primary objective of the Board was to coordinate programs that were designed to assist Native American Students. The programs included the College Access Challenge Grant, Jump Start, TRIO and the Bridge programs. I coordinated the planning, materials and presenters for each meeting and communicated with the Task Force members about agenda items. The GEAR UP contract generated less than 15% of my total income with MCEC [Rick Melmer to GOAC, 2017.09.24].

    GOAC directed the same requests to Rick Melmer’s pal and fellow Mid-Central consultant Keith Moore. On September 25, Moore declined to attend GOAC’s meeting but writes that he was appointed GEAR UP project director in fall/winter 2005, then consulted for Mid-Central from August 2012 to September 2015 and performed these duties:

    • Attend and chair all meetings of the grant advisory council.
    • Attend conferences as requested.
    • Assist with the hiring of key project personnel.
    • Assist the Project Directors with evaluating grant proposals and grant activities.
    • Utilize professional and political contacts to benefit the grant.
    • Draw on past positions and experiences to assist with the successful implementation of the grant.
    • Assist the Project Director in all day to day grant activities as assigned [Keith Moore to GOAC, 2017.09.25].

    GOAC asked former Office of Indian Education director LuAnn Werdel, whose emails and statements caused a stir at the August GOAC hearing, to come expand on what she’s revealed so far. On September 28, Werdel replied that she can’t attend because she’s caring for her stroke-stricken husband. Werdel mentions work she did for Oceti Sakowin Educational Consortium (one of the non-profits corporate shells created by Mid-Central business manager Scott Westerhuis that handled, or maybe laundered, GEAR UP money) implementing a middle-school component of GEAR UP that gave $10,000 to 32 middle schools each to conduct career/college prep programs. Missing her opportunity to offer her firsthand knowledge, Werdel defers questions about conflicts of interest to what Representative Elizabeth May says she has heard.

    GOAC sent similar questions to Roger Campbell, who succeeded Werdel at the Department of Education and who made headlines with his own batch of 2012 e-mails released by the DOE for GOAC’s August hearing. If Campbell has replied, GOAC hasn’t posted that document yet.

    GOAC also asked Education Secretary Melody Schopp to appear again. On September 28, her attorney, Paul Bachand, wrote that Secretary Schopp and the Department of Education are done appearing before GOAC on this matter… but he provides one more document dump that warrants attention in a separate post.

    So in seven requests for testimony, GOAC so far has published six refusals to testify in person, four written responses, and two refusals to provide any information. That response rate calls into question the authority our Legislature has to get the information it wants and needs about corruption in state government.



  • Tapio Urges Us to Listen to Werdel-Nelson Recordings—Yes, Let’s!

    In his summary of the follow-up documents Education Secretary Melody Schopp provided to the Government Operations and Audit Committee this week pertaining to the GEAR UP/Mid-Central scandal, attorney Paul Bachand makes a strong effort to portray former Indian Education director and attempted GEAR UP whistleblower LuAnn Werdel as unreliable, her successor Roger Campbell as responsible, and Secretary Schopp as a sterling defender of truth:

    The email exchanges provided with this correspondence support the prior submission and statements by Dr. Schopp related to the increased oversight of GEAR UP and Mid Central. These emails must be understood in their context. That is why the emails from LuAnn Werdel were provided. Ms. Werdel’s lashing out can only be understood in the context of her contemporaneous apologies and assertions regarding Dan Guericke and Stacy Phelps. To be blunt, the personnel issues surrounding Ms. Werdel had considerable impact on her credibility.

    In contrast, Mr. Campbell was considered a credible source, and as I believe you will see through the attached documentation, had the support of the Department in attempting to ensure that the 2011 GEAR UP grant got off the ground on the right foot.

    …Finally, if you go back and review Dr. Schopp’s July 24 GOAC presentation, you will see that the timelines for increased monitoring and oversight line up with the concerns raised by Mr. Campbell. Fortunately for Dr. Schopp, it is easy to keep your story straight when you are telling the truth [Paul Bachand on behalf of Melody Schopp, letter to GOAC, 2017.08.28].

    I have my own issues with the usability of Werdel’s documented January 10, 2011, warning about corruption in GEAR UP, given her January 11, 2011, e-mail apologies for those statements. We can debate the extent to which her immediate backing off from her January 2011 whistleblowing may be understood in the context of her fear of further retaliation from a well-connected Education Secretary who had already demanded her resignation.

    However, it is… problematic to say that, as we try to evaluate the credibility of the Department of Education’s claims about GEAR UP, we must accept as a standard for the credibility of all witnesses the Department of Education’s opinion of those witnesses’ credibility.

    Senator Neal Tapio seems unswayed by the Department of Education’s effort to paint LuAnn Werdel as unreliable. He sends out an e-mail to state officials and the press urging us all to listen to the recordings of Werdel’s July 25 and July 26 phone calls with Senator Stace Nelson. I reported on the content of those calls Wednesday. If you like, take Senator Tapio’s advice and listen to the calls yourself:

    July 25, 2017:

    July 26, 2017:

    As we hear in the second call, Senator Nelson took Werdel’s story and her concerns about retaliation seriously enough that he e-mailed the Attorney General the night of the first call to say he was concerned about her safety.

    Senator Tapio has listened to those recordings along with all the other information presented to him and other members of GOAC. He now asks GOAC to “suspend any contact with Ms. Werdel until a later time” and offers this positive assessment of her reliability as a whistleblower and witness:

    While Ms. Werdel’s initial criticism of the GearUP program was considered less credible by State employees and by the Legislative Audit staff, I consider her brave attempts to expose the corruption of the GearUP program to be commendable and worthy of the greatest respect. It was her willingness to sound the alarm, and hers alone, that accurately predicted future events.

    I’ve never met Ms. Werdel, but I know her type. People willing to stand up for what they believe, and fight for it, is who we need in government. I consider her to be a whistleblower and we should take precautions to protect her reputation, respect her privacy and consider concerns for her safety. Additionally, I believe there are federal whistleblower protections that we must legally respect.

    The people surrounding the creation, implementation, execution and oversight of this grant should be the focus of our attention [Sen. Neal Tapio, e-mail received by Dakota Free Press, 2017.08.31].

    Context is important for understanding the emails from Roger Campbell to Secretary Schopp in 2012. Context is also important in understanding Werdel’s e-mails in 2011. Both Senator Tapio and Senator Nelson have decided to view Werdel’s January 11 “apologies” in the context of what Werdel learned, did, and said about GEAR UP, Secretary Schopp’s January 10 request for Werdel’s resignation, and Werdel’s fears of further career-related retribution. You may add to your context by listening to Werdel yourself and making up your own mind.



  • April 2012 Mid-Central Documents, Campbell E-Mail Show Mid-Central Arrogance

    In her initial written response to the Legislature’s Government Operations and Audit Committee on the Department of Education’s role in the GEAR UP/Mid-Central scandal, Education Secretary Melody Schopp referred to a “heated” meeting between her office and Mid-Central principals in April 2012. Secretary Schopp’s follow-up submission to GOAC gives us a few more details about that strange meeting that show Mid-Central officials bucking hard against even the hint that the state might engage in oversight that would could have impinged on the scam that business manager Scott Westerhuis was orchestrating with all that federal grant money.

    We don’t learn what heated personal recriminations were exchanged at that April 10, 2012, meeting in Pierre; Schopp’s state attorney Paul Bachand simply writes that it was “a contentious meeting with unfair allegations being leveled at Mr. Campbell by Mr. Phelps and Mr. Westerhuis.” Bachand says Roger Campbell, the DOE’s director of Indian education, “was vigorous in response to these allegations” and refuted Mid-Central’s claims. “Frankly,” writes Bachand to GOAC, “Mr. Campbell exercised considerable restraint in dealing with Mid Central.”

    Considerable restraint in dealing with Mid-Central—yeah, that was kind of DOE’s problem all along with stopping the mishandling of federal grants, wasn’t it?

    Schopp and Bachand submit to GOAC documents that Mid-Central prepared in anticipation of the April 10, 2012, meeting. One document is an agenda and a list of desired outcomes for the meeting:

    Mid-Central agenda for meeting w DOE 20120410
    Mid-Central Educational Cooperative, agenda for meeting with Education Secretary Melody Schopp and Indian Education director Roger Campbell, 2012.04.10, in Schopp/Bachand Exhibit 1 to GOAC, 2017.08.28. 

    Now just the fact that local educational cooperative Mid-Central thinks it gets to set the agenda for a meeting with the state Department of Education shows a misunderstanding of who’s in charge. The fuzzy admin-speak of the desired outcomes also suggests a certain arrogance from below: how does the subordinate local entity get to “define relationship” and “expectations… in regard to project leadership” for the state agency that makes the locals’ access to the big federal grants possible?

    Mid-Central accompanied this agenda with a list of thirteen concerns about the GEAR UP and College Access grants. The copy submitted by Schopp to GOAC includes handwritten notes that attorney Bachand says he believes came from Campbell:

    Mid-Central to DOE, 2012.04.10
    Mid-Central to DOE, 2012.04.10
    Mid-Central to DOE, 2012.04.10

    Again, Schopp doesn’t tell us what she or Campbell said to Mid-Central about these concerns at their April 10, 2012, meeting, but on April 23, 2012, Campbell did prepare for Schopp a written summary of his responses to these thirteen points:

    Campbell to Schopp, 2012.04.23
    Campbell to Schopp, 2012.04.23

    Note that Mid-Central’s first concern is GEAR UP project director Campbell was referring to them as a “contractor” instead of a partner. Evidently Westerhuis and his gang didn’t like any implication that they had to answer to someone higher up. Campbell sets them straight with this amusingly gentle Animal Farmian response: “We’re all partners but SD DOE is the lead partner.” In other words, DOE is the boss.

    In points #3 and #4, Mid-Central makes the startling claim that it poured $950,000 of its own money into GEAR UP and College Access while waiting months for the Department of Education to get off its duff and sign the grant contracts. First of all, Campbell responds that Mid-Central was plenty slow in getting paperwork back to Pierre. But more importantly, Mid-Central appears to be demonstrating that the federal grant dollars were Mid-Central’s to spend before they even had those dollars or the authorization to spend them and that it could somehow bind Pierre’s hands by acting unilaterally.

    Call me authoritarian, but from a management perspective, if I see contractors behaving with such arrogance, I drop them from the project and get new contractors on whom I can rely to follow my directives and keep my office out of hot water.

    Adding to the red flags that should have warranted dropping Mid-Central in 2012 is Campbell’s statement in his point #5 that Mid-Central, Stacy Phelps’s AIII, and consultant/grant-writer/evaluator Brinda Kuhn prepared a response to the “Program Officer” that contained “inaccuracies about the actual progress of the project.” That’s not just Mid-Central fudging the finances; that’s Mid-Central and friends providing unreliable information about the actual outcomes of GEAR UP.

    These documents from Schopp show that in April 2012, the Department of Education knew that Mid-Central and the people it had engaged to run GEAR UP were expressing an arrogant misunderstanding of the proper state oversight of the program, spending money without full authorization, and submitting bad information about how it was using that money. These red flag are all grounds for dismissing a contractor and putting the project in more honest, reliable hands. Yet the Department of Education kept Mid-Central and friends on the job for more than three more years.

    Schopp’s attorney Bachand claims this follow-up submission shows that “the Department took appropriate actions to increase its monitoring and oversight.” The April 2012 documents actually show that Secretary Schopp and the Department failed to take the most appropriate action warranted by the evidence available at that time: drop Mid-Central and AIII before their arrogance leads to even bigger problems for the state.



  • Werdel Met with Moore, Westerhuis, Phelps, and Guericke to Express GEAR UP Concerns

    In anticipation of his scheduled grilling by fellow members of the Government Operations and Audit Committee yesterday, Senator Stace Nelson sent two recordings of phone calls with GEAR UP whistleblower LuAnn Werdel to multiple state officials and journalists. Senator Nelson also came prepared with legal and procedural arguments that kept GOAC chair Senator Deb Peters from putting him in any sort or witness chair.

    However, the recordings Senator Nelson released yesterday, of phone calls with LuAnn Werdel on July 25 and July 26 of this year, contain important information about what Werdel said and did about GEAR UP up to the moment of her firing by Secretary Schopp on January 10, 2011.

    In her July 25 conversation with Senator Nelson, Werdel said that in her capacity as director of the Office of Indian Education, she looked at the GEAR UP budget and saw $60K to $70K salaries going to people whom she said were doing no work, such as GEAR UP manager Stacy Phelps’s ex-wife and a man named Jay Roman, who was one of the recipients of money under several illegal contracts allegedly issued by the Mid-Central Educational Cooperative.

    Seeing such big salaries for no apparent work, Werdel called former Indian Education director Keith Moore to ask what was going on with GEAR UP. Werdel told Nelson that that conversation took place while Moore was chief diversity officer at USD under Dean of Education and former Education Secretary Rick Melmer. If Werdel’s memory is correct, that would place her conversation about GEAR UP with Moore sometime between August 2009 and June 2010. Werdel said Moore, who then was still the designated project director for GEAR UP, came to Pierre to meet with her in person. According to Werdel, Moore said of the inflated contracts (Werdel’s exact words), “Sometimes that’s the cost of doing business.”

    Werdel told Nelson on July 25 that she later called Stacy Phelps, Mid-Central exec Dan Guericke, and Mid-Central business manager Scott Westerhuis to a meeting in Pierre. She told them that whatever they were up to with all the GEAR UP money had to stop. On July 26, Werdel told Nelson that Westerhuis told Werdel that she didn’t get how things worked. According to Werdel, Westerhuis said that Mid-Central was the fiscal agent for the grants, that Phelps worked for Mid-Central, that Phelps had the ear of Moore and Melmer, and that Moore and Melmer were really good friends of Dennis Daugaard. Thus, as Werdel summarized Westerhuis’s response, arguing with Phelps, Moore, and Melmer is really arguing with Daugaard.

    In referring to Daugaard, Werdel seems to be indicating that this noteworthy meeting took place sometime after Daugaard’s election as governor in November 2010. Daugaard was inaugarated on January 8, 2011, two days before Werdel was asked to resign.

    Werdel told Nelson that after that Pierre meeting, Phelps, Guericke, and Westerhuis began their campaign to turn Education Secretary Tom Oster and his lieutenant and soon-to-be Secretary Melody Schopp against her. Werdel said in her July 26 phone call with Nelson that her job performance reviews had been solid and that Secretary Oster had said she was the best Indian Education director the state had had. Werdel also told Nelson that in December 2010, Schopp had promised to “protect” Werdel from Phelps, Moore, and Melmer, but Werdel’s questioning of the grants made that apparent goodwill disappear.

    Werdel told Nelson that she wrote an e-mail on January 10 to the “management team” of the Department of Education, over a dozen state officials, outlining her concerns about the federal grants being mishandled by Mid-Central and its subrecipients. Werdel says that fifteen minutes later, she was called into Secretary Schopp’s office and asked to resign. Then Werdel wrote the e-mail released by Secretary Schopp last week, the 8:39 a.m. e-mail in which Werdel refers to her repeated warnings about “what Stacy Phelps and Mid Central is doing with the GEAR UP grant and the College Access grant.” Werdel read that 8:39 e-mail over the phone to Nelson on July 25 and later sent him a copy, but she did not share the preceding e-mail that she says precipitated her firing.

    Werdel also told Nelson about a curious conversation with Margo Heinert, a former school superintendent and Department of Education consultant and mother of Senator Troy Heinert. Werdel says that Heinert told her she was in the DOE office the day the Westerhuis murder/arson/suicide made the news in September 2015. Werdel said that Heinert called Werdel and told her that upon hearing the news from Platte, Secretary Schopp broke down, said the events were her fault, and said that she should have listened to LuAnn but didn’t do anything about it.

    Recall that in her written response to GOAC question #39 relating to this alleged statement to Heinert, Secretary Schopp said, “Once again, it seems that a certain member of GOAC is attempting to blame the deaths of the Westerhuis family on me. That is reprehensible, and frankly bizarre, and I will not dignify it with a response.”

    Werdel said in her July 25 phone call with Nelson that she has lived in fear for the last two years, wondering the Westerhuis murders were actually a hit and recalling that very influential people had told her to be quiet. Nelson had to ask Werdel many times to give him a  copy of the e-mail; nearly every time he asked, Werdel paused or evaded.

    When Nelson asked about other documents in their July 26 phone call, Werdel did finally mention the apologies she wrote on January 11, 2011, after her dismissal, which contradict the alarms she raised in her January 10 e-mail. Werdel told Nelson, as she told the press Monday, that she wrote those apology e-mails “because I didn’t want anything to come back to me.”

    GOAC decided yesterday to ask Werdel to answer some questions on the record about GEAR UP. Question #1 should be, “Please submit all e-mails and other dated documents containing the concerns you raised about GEAR UP and other grants to state officials.”



  • Schopp Remarkably Ignorant of Publicly Reported & Relevant Facts About GEAR UP Scandal

    Education Secretary Melody Schopp’s newsworthy (one, two, three, four blog posts on Dakota Free Press, coverage by Mercer, Ferguson, Russo, Kennecke… but predictably, not a word from Powers on Schopp, just diversionary and non-analytical flak for the GOP establishmentresponse to legislators’ questions about the GEAR UP/Mid-Central scandal includes some so far underplayed evidence that Secretary Schopp remains more interested in distancing herself from the Mid-Central thieves than in really digging into the corruption and crimes that took place under her watch.

    Questions #15 and 16 ask Secretary Schopp when she became aware of the apparent nepotism in GEAR UP grant director Stacy Phelps’s hiring of numerous relatives, including his aunt Alice Phelps. That nepotism has been widely reported, but Secretary Schopp, who should have access to as much information about GEAR UP expenditures as the rest of us and at least as much interest in figuring it all out, can only say she is “generally aware that some Phelps family members were employed” and claims she is not aware that Alice Phelps specifically had such employment. Schopp questions the accuracy of the premise of these two questions, even though she cites the December 2015 Eide Bailly audit that accounts for the direct GEAR UP employment of the Phelps clan to emphasize her preferred talking point that “there was no missing GEAR UP money.”

    Question #17 asks when Secretary Schopp became aware of Stacy Phelps’s connection to the web of shell corporations created by Mid-Central scandal kingpin Scott Westerhuis. Secretary Schopp claims ignorance of that corporate web, even though Bob Mercer reported those curious corporate documents on September 22, 2015, just days after the spectacular Westerhuis murder/arson/suicide launched Mid-Central into widespread public awareness. At that moment, a Secretary of Education in crisis mode would surely have had her staff gathering every bit of relevant information they could. That Secretary of Education Schopp would have ignored the publicly documented existence of those suspicious corporations as one avenue to check for the possible disappearance of state or federal funds is simply incredible.

    Reporters seeking to get to the bottom of the GEAR UP/Mid-Central scandal have noted the above details. A Secretary of Education committed to getting to the bottom of the scandal would do the same. Secretary Schopp seems less interested in getting to the bottom of GEAR UP and more interested in getting out from under the scandal.



  • Former Indian Education Director Campbell Could Elaborate on Schopp GEAR UP Response

    On her first day as Secretary of Education, Melody Schopp asked the director of the Office of Indian Education, LuAnn Werdel, to resign. Werdel unloaded with statements questioning the integrity of those managing the GEAR UP and College Access grants, then backed off from her criticisms the next day. The e-mails made public by the Government Operations and Audit Committee as part of Secretary Schopp’s written response to committee questions thus wakens the case for blaming Secretary Schopp for not acting on the concerns expressed by Werdel in January 2011.

    The timeline for serious concerns about misconduct at Mid-Central thus defaults back to 2012, which Schopp has previously admitted is when her department began tracking “incompetence” in Mid-Central’s financial record-keeping and offering the cooperative “technical support.”

    It apparently took the person Schopp chose to replace Werdel, Roger Campbell, to draw Schopp’s attention to GEAR UP:

    I hired Mr. Campbell in March 2011. The GEAR UP contract with mid Central was signed in March 2012, and GEAR UP became one of the Mr. Campbell’s responsibilities. Mr. Campbell first expressed concerns in spring 2012, one of which was that the business manager was also CFO for AIII.

    At the July 24, 2017, GOAC meeting, I referred to the fact that SD DOE staff had concerns going back to 2012, and I described the increased monitoring activities regarding GEAR UP in response to those concerns [Education Secretary Melody Schopp to GOAC, 2017.08.22, Response #38, pp. 5–6].

    Schopp refers with a surprising lack of detail to a heated meeting involving her, Campbell, other DOE staff, and principals at Mid-Central:

    I specifically recall one in-person meeting with Mr. Guericke, Mr. Westerhuis, Mr. Phelps, myself and SD DOE staff, including Mr. Campbell, which was very heated and included what I considered to be personal attacks on both sides. This back and forth was not only unproductive, but also odd, because Mr. Phelps had suggested Mr. Campbell as a potential candidate for the Indian Education Director position. I likewise felt this was negatively impacting the grant’s purpose [Schopp, 2017.08.22, p. 6].

    Schopp doesn’t put a time on this alarming meeting, but it must have taken place before March 10, 2013, the effective date of Campbell’s resignation from the OIE given in the resignation included in Schopp’s GOAC response. More importantly, Schopp gives no details about who said what. She vaguely mentions emotion and personal attacks but says nothing specific about what facts or policy matters might have provoked such outbursts. She explicitly ties nothing from that undated meeting to her otherwise meticulously timelined account of remedial actions her department began taking to check Mid-Central’s deficiencies in 2012 and 2013.

    Instead, in the next breath, she turns to Campbell’s resignation, says he did good work, and suggests Campbell saw no illegal activity at Mid-Central, so why should she?

    I believe Mr. Campbell had the department’s interests in mind, and his suggestions led to increased oversight and accountability for Mid Central. I have attached a copy of Mr. Campbell’s resignation letter, which does not reference any purported illegal activity [Schopp, 2017.08.22, p. 6].

    Notice that even as she talks him up, Schopp sets Campbell up as a possible firewall/fall guy between her and Mid-Central misconduct. Campbell was recommended for the job by Stacy Phelps, one of the GEAR UP principals now under indictment. GEAR UP was Mr. Campbell’s responsibility. When Campbell gave up that responsibility two years later, Campbell didn’t mention any illegal activity. If Pierre needs a back-up fall guy beyond Phelps, Guericke, and Hubers, Campbell may be the next in line.

    Of course, Campbell’s resignation letter is far from a detailed exit-interview document detailing all that of the institutional knowledge he feels he must pass on to his successor. After stating his intent to leave and addressing pay and leave details, he writes the following general epistle of gratitude and hope:

    It has been my privilege and honor to serve the department as the Director of the Office of Indian Education. I am grateful to have had this opportunity to help improve the educational outcomes of tribal students across the state. I feel that the department has a good foundation with the inclusion of department-wide strategies to address the achievement gap that exists between native and non-native students. It is my hope that the Department of Education will maintain this direction that identifies proven educational delivery that is data driven as well as inclusive of all entities, both public and tribal.

    Again I thank you for this opportunity and I wish the department and its hard working staff all the best as they move forward with your initiatives [Roger Campbell, letter to Melody Schopp, 2013.02.28, included in Schopp to GOAC, Appendix H, 2017.08.22].

    If Schopp can cite this single letter as evidence that she never heard anything about illegal activities at Mid-Central, we could cite this fuzzy prose as a subtle signal that DOE was all talk (“good foundation”) and no action (“opportunity to help improve” is not the same as “improve”) and that it needs a reminder of the principles it should be following (“data driven” and “inclusive of all entities, both public and tribal”).

    And notice that last pronoun: “your initiatives.” GEAR UP, other Indian education programs—they belong to you, Melody. At least that’s another way we could fit Campbell’s letter into the context of what we know and what we’re trying to learn about GEAR UP and Mid-Central.

    But let’s not speculate and over-interpolate our suspicions. Let’s get the facts straight from the horse’s mouth. Given what Schopp presents above, the next person GOAC invites to speak should be Roger Campbell. He has denied past press requests for comment, but the evidence and statements we have now appear to make him the most reliable witness we can ask about who knew what when about GEAR UP and Mid-Central. GOAC should now call Roger Campbell forward to answer the following questions:

    1. When did you first develop concerns about Mid-Central’s management of GEAR UP?
    2. What were those concerns?
    3. When did you share those concerns with other Department of Education staff?
    4. When did you share those concerns with Secretary Schopp?
    5. How did Secretary Schopp respond to your concerns about GEAR UP?
    6. Do you recall the “heated” meeting that Secretary Schopp describes involving herself, you, other DOE staff, and GEAR UP principals?
    7. If so, when and where did that “heated” meeting take place?
    8. Who was present for that “heated” meeting?
    9. Which if any of your concerns about GEAR UP were raised at that “heated” meeting?
    10. Who said what at that “heated” meeting?
    11. What if any specific statements at that meeting would you characterize as “heated”?
    12. What if anything do you feel prompted those “heated” statements?
    13. Did you share Secretary Schopp’s stated opinion that the “heated” meeting was “unproductive” and “odd”?
    14. Did the statements of Phelps, Guericke, and Westerhuis at this “heated” meeting heighten your concerns about the management of GEAR UP?
    15. What if any new opinions or actions did that “heated” meeting prompt you to adopt with respect to GEAR UP?
    16. While we’re at it, how did your wife Corrie Ann Campbell end up working as a facilitator for Mid-Central?