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Mines Seeking Cover from GEAR UP Blow-Up; Melmer Forgets $1000 Checks

The powers that be are having a hard time spinning the controversy involving Mid-Central Educational Cooperative’s handling of millions of dollars of federal GEAR UP grant money and the apparent murder-suicide perpetrated by MCEC’s business manager Scott Westerhuis. Former New Mexico Congresswoman Heather Wilson, who now owes her livelihood to the State of South Dakota for making her president of the School of Mines and Technology in Rapid City, comes on KELO-TV to say GEAR UP is a great program for helping American Indian kids get ready for college. GEAR UP certainly seems like a great program, with accelerated classes and a summer camp to give Indian kids a rigorous education and a preview of campus life. However, the pack of cronies who managed those millions of GEAR UP dollars have yet to provide either the feds or the press with firm evidence that their well-paid efforts are really increasing the number of Indian kids going to college.

Even Wilson can’t step away from the mic without saying something went wrong with MCEC’s handling of GEAR UP and that she didn’t do it:

“Our focus is on the students and the students’ experience,” Wilson said. “It sounds as though there were some problems with the administrative side, the business side. That’s not our thing. It’s not our role. But we do see benefits for the students. And if we can be helpful in trying to make sure that stays, we certainly are open to doing what we can” [Kevin Woster, “GEAR UP Program Praised for Benefits to Students,” KELO-TV, 2015.09.28].

The School of Mines received $155K in GEAR UP money in September 2012, $149K in May 2013, $200K in meal reimbursements in August 2013, $250K in May 2014, $133K in September 2014, $168K in May 2015, and $222K in August 2015. That’s 1.12 million dollars—why wouldn’t Wilson, who came on board at Mines in June 2013, want to keep that train rolling?

One of the cronies who may be closer to whatever went wrong at MCEC, Rick Melmer, didn’t do himself any favors with his conversation with Angela Kennecke last night. Apparently he made so much money consulting for MCEC (plus a car!) Melmer can’t remember it all:

Melmer says he put in about 10 hours a week on GEAR UP starting in July of 2013; chairing the advisory board and giving technical advice on the program to Mid Central.  But according to GEAR UP monthly meeting minutes, Melmer was paid a GEAR UP stipend from August of 2012 through May of 2013.*

Kennecke: If you had started working in August of 2012…
Melmer: It was July of 13, was my first month with Mid Central Coop.
Kennecke: Okay, I’ve got…
Melmer: 13, 14 and 14, 15.
Kennecke: I’ve got in 8/14/12 there was a payment of $1,000.
Melmer: I don’t know what that would be.  I honestly don’t.
Kennecke: And then a stipend in 10 of 12 for $1,000.
Melmer: In 10 of 12?  For me?

We showed Melmer the payment lines taken directly from Mid Central Minutes, but Melmer said they were wrong.

Kennecke: So you weren’t working for them in 2012?
Melmer: No, I was employed at USD; I was the Dean of the School of Education [Angela Kennecke, “Melmer Answers Questions About GEAR UP Work,” KELO-TV, 2015.09.28].

Kennecke and Melmer both should have read my September 23 report on MCEC’s payouts to Melmer: He received nine $1,000 GEAR UP stipends from August 2012 to June 2013.

Kennecke can be excused for missing a month. But Melmer forgetting nine thousand-dollar payments? I see limited possibilities:

  1. Melmer really forgot, which doesn’t inspire confidence in his ability to manage public dollars;
  2. Melmer is lying, which doesn’t make sense, because why risk lying about something we can look up so easily; or
  3. MCEC’s books are really screwed up, meaning lots more money may have gone for things other than direct benefit to American Indian students, things that business manager Scott Westerhuis and his wife and assistant business manager Nicole Westerhuis died before explaining.

And then there’s Keith Moore, Melmer’s pal and former state director of Indian education, who drew a $4,000 monthly stipend and a $148K contract from MCEC’s GEAR UP pot. Asked by Kennecke what he did to earn that money, he offers the kind of textbook admin-speak that suggests the real answer is nothing:

My contract with Mid-Central Education Cooperative was to provide senior-level leadership for organizational direction and programming and had nothing to do with financial decision-making or business administration. (My role was primarily to provide guidance in collaboration between partners and strategic program planning. I helped individuals with communication issues within and outside the organization and was responsible for assisting with developing meeting agendas for the advisory board.) [Keith Moore, quoted in Kennecke, 2015.09.28]

Hmm… provided guidance and leadership, but didn’t actually administer the business or make decisions? If a guy who writes that vaguely can get paid six figures to “help[] individuals with communication issues,” I could make millions as a communications consultant. Sign me up, GEAR UP!

Wilson’s running for cover, and Melmer and Moore are stumbling after her. Let’s hope the press keeps digging so we can get to the bottom of what Scott Westerhuis and MCEC did with our tax dollars.


  1. Eve Fisher 2015-09-29 16:33

    That’s where I nearly spit out my dinner last night – when Melmer told Angela he didn’t remember getting the money… I swear to you, I’ve never forgotten a $1,000 check in my life. There haven’t been that many of them.

    BTW, I wouldn’t sign up for any of these GOP get-rich-quick-schemes for the cronies. It’s starting to look like a quick ride to either the “walk of shame” or a violent death. Who knows? Maybe the next “Sopranos” will be set in SD.

  2. Craig 2015-09-29 16:39

    Sounds like that entire organization – and everyone involved – needs to be audited. There seems to be a lot of money floating around with questionable benefits.

    Anytime I see “stipends” for exactly $1000 or $2000 or $2,500 I question the validity. Normal salaries don’t tend to round off to such perfect numbers – so these payments don’t seem to be tied to performance or effort but instead seem like under the table handouts. This is a little more Tony Soprano than

    Are we really to believe these people did enough to “earn” these stipends? Does a Superintendent really have enough free time to take on what is essentially a second job consulting another agency?

    As with most government programs, the administrative expenses eat up a huge share of the total funds while the American Indian students that were supposed to benefit make due with the leftovers.

    We can do better. Where is the oversight? It shouldn’t take the death of six people and a community tragedy before someone realized we had issues.

  3. Craig 2015-09-29 16:41

    I didn’t finish my sentence. Mean to say this is a little more Tony Soprano than we should be comfortable with – but I find the humor in the fact that Eve mentioned the Sopranos as well. Guess my thought process isn’t all that unique after all.

  4. Eve Fisher 2015-09-29 16:44

    Great minds think alike, Craig.

    I still want to know what the actual students actually got – if there were any students, and they actually got anything.

  5. Clyde 2015-09-29 17:54

    So far I have heard the names 6-7 school representatives or so called consultants that are mixed up in this money scheme.. I am not quite sure how the state of South Dakota can be ok with this?
    Keep pulling the strings and you are going to be simply amazed who falls out!

  6. Spike 2015-09-29 18:04

    Is Moores 148k contract different than the 4k a month stipend? I missed that one?

    OMG this is out if control. Too many hands out. Wow.

    Who are the other “vendors” lol…that have collected moola from this zoo?

  7. Spike 2015-09-29 18:07

    Angela Kenneke just said on keloland tv that the 148k contract to Moore was never approved. Guess 4k a month for “senior level leadership” was enough……..

  8. Disgusted Dakotan 2015-09-29 18:56

    &$%#@!!!!!! The problems facing young native kids is epidemic and these $#@!%& vultures were ripping at their futures like ticks!

    I’m waiting for Marty Jackley to come out as the attorney and spokesperson defending this disgrace as he did for Mike Rounds when the EB5 corruption broke.

  9. 96Tears 2015-09-29 19:00

    This is one hog trough that got filled by the Rounds/Daugaard gravy train. Jobs, contracts and sweetheart deals for Rounds family members and pals is another hog trough. The Rounds Racketeering Scam fleecing EB-5 millions involving Joop Bollen, the S.D. Board of Regents and political pals is another.

    How many other hog troughs are out there from the Rounds/Daugaard regime? It’s time for a thorough forensic audit of all federal and state programs and expenditures for the last 13 years.

  10. Sam2 2015-09-29 19:30

    Theses people are behaving like a bunch of rats in daylight. Running for cover.

  11. The King 2015-09-29 19:57

    Don’t forget that seven (yes, seven) different foundations were set up by Westerhuis and Phelps. The foundations should also be audited. Next, those ’employed’ by the MCEC cooperative and the foundations should be cross checked against the companies that employ those people for their day jobs. Superintendent and university faculty/staff often have limits within their contracts on the amount of external time they can serve as consultants. Assuming there are those that were in violation of their contracts it would be up to the school district or the BOR to decide how they should deal with those employees.

    My guess is that while MCEC’s books are littered with payouts for ‘leadership and organizational direction and programming’ the foundations’ are even more littered.

  12. larry kurtz 2015-09-29 20:09

    the fraction of people using their real names to affect change in southern dakota is a dismal science, cory: self-reliance or moral hazard?

  13. scott 2015-09-29 20:26

    how do these people have enough time for all the “jobs” they are getting paid for?

  14. Mike 2015-09-29 20:42

    Ask again what’s wrong with South Dakota Education Department and all the fringe elements connected with it. it has nothing to do with test scores. I blame each and every registered voter.

  15. Deb Geelsdottir 2015-09-29 21:51

    I need nose plugs due to the stench of SD’s organized crime.

    Cory and all the rest of you folks digging into this, keep it up! You’re doing a greater service to the citizens of SD than the sum total of elected and appointed officials in Pierre.

  16. John 2015-09-29 22:23

    I repeat: who’s on suicide watch tonight; the recipients?

    Perhaps a bigger question is which is the next shoe to fall – which is the next million dollar state/federal contract privatized through a public, private, or non-profit shell entity that will crumble into scandal and oblivion? This is merely: wash, rinse, repeat in the GOP non-business, non-economic development, non-education cycle of crony capitalism of socializing costs while privatizing the profits.

  17. Kay 2015-09-29 22:35

    I am wondering how long it took Jackley to determine that the six were murder suicide and how was the fire started? What do the friends of the Westerhuis have to say about the days leading up to this crime? There are so many things that the media have not covered, that is not their normal sticking their noses into all areas of a story. The silence is deafening to me. I believe that for one person to be able to shoot a shotgun and not arouse the other members of family to fight or exit the house is a hard story to swallow. It is also weird that before he turned the shotgun on himself he decided to burn the house and the family up, guess the shotgun was not enough. It just sounds and smells like a cover up to me. I will say this until something big changes my mind, I am not sure who hired the trigger but maybe someday if people keep digging we can get some truth out of this tragedy. I pray that the people that know the truth will break down from guilt and tell the whole story, but then again after the shooting and fire they may not ever feel guilty enough to risk their life.

  18. Jeff Barth 2015-09-29 22:37

    Did EVERYONE make over $100K?

  19. moses 2015-09-29 22:55

    C, H. is this something Jackley will check out or not.

  20. Deb Geelsdottir 2015-09-29 22:58

    That’s what I’M THINKING Jeff!

    What a gravy train for those soulless grifters! So what if they’re cheating SD’s “best and brightest”. They have no conscience and a great deal to be ashamed of. I’d say criminal convictions and long jail sentences ought to provide ample time for them to reflect on their sins.

  21. Jeff Barth 2015-09-29 22:59

    Angela Kennecke deserves credit for pushing to get this story. Keep it up Angela!

  22. Lora Hubbel 2015-09-29 23:22

    So in the story where “you don’t get your $4.3 Million contract renewed”, does the main character respond with…”If I can’t have mine, you can’t have yours! If I’m going down, you and all the rest are coming with me!” Does the climax of that story end in 6 murders and all forensics destroyed?

  23. Deb Geelsdottir 2015-09-29 23:33

    For SD and the safety of each citizen, I hope you’re wrong Lora. To my great sorrow, I’m afraid you might be right.

    I thought the murders of the babies at Sandy Hook would be enough to bring about changes in gun laws, but I was wrong. I no longer have any idea what it takes to make Americans demand changes. Maybe we need to import some Catalans.

  24. Lars Aanning 2015-09-30 00:00

    Would an interrelationship diagram simplify the conflicts of interest in this corruption saga?…like start with all the governor’s appointees and expose the related parties?…like following the different money trails?…

  25. Disgusted Dakotan 2015-09-30 02:13

    Lars, that’s a great idea.

    Curious if there is any obvious lobbying $$$ trail, or campaign donations?

  26. Sally 2015-09-30 05:34

    Cory, keep digging. Don’t let this just disappear. Already in Platte the tendency is just to pray all this grief away and seek that ol’ peace that passeth understanding. Not that there’s anything wrong with prayer, but this tragedy is obviously no random Act of God. Scott Westerhuis’s gravy train had finally derailed and he snapped. Mental health issues? From all reports so far, there were none that anyone had picked up on. Quite the opposite: nice guy, great dad, active in church, generous. And as much as I support strict gun controls, that wasn’t the issue here either. Think about it: he’d doused the house in gasoline. My theory (yes, pure conjecture) is that he’d given them sleeping pills or something and then shot them just to make sure they didn’t wake up and panic at being engulfed in the fire. And in his mind, he probably thought it was better for them to be dead than for them to have to suffer through the shame and hard times he knew were coming. What I want to know is–how was he able to divert all those funds for so many years? Why was he able to set up those non-profits? If Rick Melmer says he didn’t get that money, where did it go? Why was Dan Guericke, the director of MCEC, so clueless about what was happening? Who else was pulling in the bucks from these grants and for doing what? Why is it so easy to game the system?
    Maybe what God is trying to tell us here is something along the lines of Geez, folks, how about using some of that sense I gave you to set up a few more regulations and demand a little more accountability?

  27. caheidelberger Post author | 2015-09-30 06:27

    Jeff, you’re right about Kennecke. Let Sammi Bjelland smile at us from behind the anchor desk; Kennecke is out there doing some real reporting. Her investigative articles have lots of detail, and she’s using the Web properly, including links and additional video to tell the story online.

  28. John 2015-09-30 07:35

    Hum, you say, forgotten income? Reads as if Melmer, perhaps others, may have an IRS problem . . .

  29. Joe 2015-09-30 11:45

    I believe Melmer, he doesn’t have any reason to lie here, and he could have walked that back saying something like I’d have to look at my records, etc.

    Here are questions I have, was this contract bid out? Was it regularly audited? You list the School of Mines receipts well those seem kinda high too. Consulting fees throughout? What is the salary paid to the locals who run the program.

    It is a tragedy, and I’m not going to deny that, and if it would have happened to one of my family friends I’d probably not be happy, but as someone who currently works on a reservation, has worked on a different reservation, and has friends who work on reservations as well, its a tragedy that so much of this money is being used in areas where it shouldn’t be.

    Don’t knock Melmer and all these others who made big bucks consulting, hey you want to work 10 hours a week and make a few grand a month to “advice” and sit in on a meeting here or there? sure, why not.

    What upsets me is the legislature allows much of this to happen, if they were serious about stopping this they would say any state pseudo entity or any entity that holds state contracts is going to get audited, and then hire one of the top firms in the country and have it all audited.

    I’ve been out of South Dakota for a few years now, but when I was in South Dakota, you would hear a ton of whispers of this stuff going on, shady stuff, that if true should have been caught, and I’m guessing most of it wasn’t true, but when someone does finally get caught, and what it takes to get caught, and how long they’ve been doing it, you begin to wonder if maybe more of it wasn’t actually true.

  30. Rorschach 2015-09-30 11:50

    This is the kind of stuff that goes on in a one-party state. With the fox guarding the henhouse the bones get buried in secret and taxpayers are assessed to buy more hens.

  31. caheidelberger Post author | 2015-09-30 11:57

    Joe, there is some merit to what you’re saying: if an agency offers X for consulting, does a consultant have any obligation to ask for less than X? If a consultant asks for X, and an agency thinks X is too much, doesn’t the agency have the right to turn down the offer and seek a lower bid? One can argue that Melmer was simply playing by the rules of a system that lets too much money slip away in overhead.

    Melmer and others in this show aren’t exactly innocent bystanders. Melmer in particular is well-positioned by his past patronage jobs to know exactly where and when and how to take advantage of this easy federal money. But I will grant that we don’t necessarily need to hang Melmer to solve the problem (although I’d still like to know exactly what work he and Keith Moore did that was worth $1,000 to $4,000 a month). We can solve the problem with more transparency, more Legislative oversight… and a better multipartisan balance of legislators and bureaucrats who will keep an eye on the attempted shenanigans of the elites of the other political parties.

  32. Joe 2015-09-30 13:08

    I agree, it just seems like people would rather hang Melmer, Moore and everyone else, or toss it up to a 1 bad apple, etc., rather than look at the problem which is the state government, state oversite, and state correcting action, which continues to be reactionary rather than proactive.

    I keep better records with the softball club that I run, for the softball program that I coach than many state agencies in South Dakota keep.

    It shouldn’t take more democrats to do the right thing, as an accountant who does audits once told me, if its illegal he can tell, if its just poor he can tell, if you didn’t do anything wrong, you shouldn’t be worried, yes they will find some flaws as all audits do, but if everything is cozy as most of the state GOP want us to believe they should have no problems allowing for the audits to happen.

  33. Deb Geelsdottir 2015-09-30 16:29

    Bill Fleming, get your forensic account pal to look at this. You know, Don Frankenheimer? Frankenfeld? Frank . . . something!

  34. Bill Fleming 2015-09-30 16:33

    Yes, Frankenfeld. Hmm. I wonder if he’s following this. He would be a good one to look at it. Good idea, Deb.

  35. mike from iowa 2015-09-30 16:53

    Looks like the system is rotten clean through,otherwise you’d think some people with a conscience would stand up and shout enough is enough. Where are all the civic minded wingnuts at? Doesn’t anyone in the party of family values give a —-?

  36. Disgusted Dakotan 2015-09-30 17:15

    @Iowa Mike Stingy Grandpa Daugaaard would never allow such waste and corruption in his administration! Everyone has accepted the meme that he’s stingy and a good steward with tax payer’s $$. Mercer, et al, have all parroted the press releases saying as such. Perfect smoke screens for covering up the foul smell of EB5, Benda’s mysterious death, the appearance of impropriety here.. Its all just an “unfortunate” situation, nothing contrived or corrupt here..

    All of South Dakota saw what “reward” past conservative watch dogs received for their efforts opposing Daugaard & Rounds’ corruption. Not surprising others aren’t jumping up to fill the vacuum.

  37. Platte Resident 2015-09-30 22:40

    I have been following the Westerhuis story in Dakota Free Press and now feel I need to respond to Sally’s remark about Platte’s tendency to “pray all this grief away.” Many Platte residents are people of faith and will naturally turn to prayer for solace. However, this does not mean that we are uninterested in uncovering the truth. For many of us, “that ol’ peace that passeth understanding” will not come until there is justice for the Westerhuis children.

  38. leslie 2015-10-02 21:25


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