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GEAR-UP, EB-5 Show Need for Ethics Commission, Oversight, and Fewer Consultants

I’m not surprised that my freedom- and openness-loving local editorial board says the GOED/EB-5 and MCEC/GEAR UP scandals expose South Dakota’s urgent need to check corruption:

EB-5 and GEAR UP have some things in common. Both programs began during then-Gov. Mike Rounds’ administration. Both stories came to light after tragic deaths.

And both show tangled messes that might have been avoided with more oversight. Where lawmakers could have pushed for greater transparency in how South Dakota does business, or better checks and balances for those who handle our money, nothing was ever done [editorial, “EB-5, GEAR UP Messes Demand Action,” Aberdeen American News, 2015.10.22].

I’m a little surprised to find conservative columnist and Northern State history prof Art Marmorstein agrees with me that these scandals warrant an independent ethics commission:

Time for a different type of accountability: an oversight effort focused on making sure taxpayer money is spent, not just legally and in accord with correct procedure, but wisely and ethically.

Last year, District 3 Rep. Dan Kaiser broke with his Republican colleagues and supported the South Dakota Ethics Commission bill proposed by House Democrats. “I like the idea of more government oversight,” said Rep. Kaiser.

So should the rest of us [Art Marmorstein, “Accounting for Ethical Lapses in South Dakota,” Aberdeen American News, 2015.10.22].

(Actually, Kaiser’s brave vote wasn’t on a bill but a measly resolution, HCR 1006, that only four House Republicans supported. But Marmorstein’s point stands.)

Marmorstein also agrees that one of the big problems with federal grants like GEAR UP is the opportunity for “consultants” to divert cash meant to help the underprivileged into their own pockets:

KELO-TV news reported that Mid Central paid [former Education Secretary turned consultant Rock] Melmer $185,000 in fiscal year 2013-14 and $233,000 in 2014-15, using (in part) GEAR UP funds. Perfectly legal, but hardly an ethical way to spend funds intended to help the underprivileged.

Mid Central is just an extreme example of standard procedure in administering federal grants. When faced with a tough problem (in this case, trying to increase the number of American Indian students going on to college), punt. Hire overpriced consultants. Purchase an expensive software package. Host posh conferences and workshops. And, since you’re spending federal money, be extra careful with the i-dotting and t-crossing. Do that and your program sails right along whether it’s effective or not [Marmorstein, 2015.10.22].

Did you catch that? Legal but not ethical?

Lance Witte, superintendent, consultant, beneficiary of MCEC money trough
Lance Witte, superintendent, consultant, beneficiary of MCEC money trough

SDGOP crony Rick Melmer wasn’t the only consultant raking slurping up six figures from Mid-Central Educational Cooperative’s federal feeding trough. Joining Mitchell’s Joe Graves in the superintendents’ cash cage is Wessington Springs superintendent Lance Witte. In addition to his duties for the Wessington Springs school district, Witte is an associate at The Cambrian Group, CEO of Lance L. Witte Consulting LLC, and associate at the American Indian Institute for Innovation. MCEC board minutes show that on August 14, 2012, MCEC issued Witte’s employer the Cambrian Group a $97,500 GEAR UP stipend. Over the following six months, Cambrian received another $4,363.78 in GEAR UP stipend payments and for travel, dues, and services. Cambrian appears to have received no checks from MCEC after February 2014, but since March 6, 2014, Witte either personally or through his personal consulting LLC, receiving $13,872.78 for GEAR UP services. Witte’s last GEAR UP check, #146701, issued June 3, 2015, included $1,250.00 for “strategic planning” and $163.80 for travel.

(Witte’s ex-wife, Gwyneth Dean-Witte, also works for MCEC as a Title III coordinator. MCEC hired Dean-Witte in May 2014 for $50,000.)

Marmorstein may have hit the nail on the head. Enterprising superintendents like Witte, Graves, and Melmer, have been able to leverage their public positions into lucrative private middleman or sideline-man contracts where they don’t deliver value directly to students but, as is the case with consulting, tell other people how to deliver value. They know where the federal grants are, they know the paperwork those grants will require, and they know how to create all sorts of impressive looking documentable administrivial busy-ness that allows them to stick their buckets in the money stream.

Maybe the Board of Regents, to whom the South Dakota Department of Education is moving administration of the GEAR UP grant, can do better than Mid-Central at minimizing the overhead spent on consultants and cronies. The EB-5 scandal got rolling on a Regental campus, when Joop Bollen, the state employee handed EB-5 by the Rounds Administration, got creative and privatized his own job to increase the windfall he and his private associates could get from peddling EB-5 visas. Maybe the fallout from EB-5 (including the blame Bollen tried to place on the Regents and the fact that the feds are declaring us too corrupt to get money from the program) will encourage the Regents not to farm out GEAR UP activities to moonlighters and instead keep as many of GEAR UP’s operations in house, where we can account for every penny spent by civil servants who work for the public, not for profit.

Update 11:55 CDT: I initially identified Gwyneth Dean-Witte as Lance Witte’s wife. A correspondent informs me and Lance Witte’s Face It Together profile confirm that the couple split a few years ago. I have corrected the text and regret the error.


  1. jerry 2015-10-22 10:06

    Instead of the politically shady board of regents to administer Gear Up, why not Oglala Lakota College in Kyle, South Dakota. Here is an organization that has stood the test of time with honor and dignity. What better place for Native higher education future than a prestigious college that has name recognition to most Native students in South Dakota. These types of grants and endowments have no business with the political board of regents who have proven there ineptness at controlling corruption.

  2. jerry 2015-10-22 10:49

    Mr. Sol, this 5th charge against him should mean a Sioux Falls change of address for him two times ago. When you are politically connected, you pretty much can do as you will. It would not surprise me that he would be able to continue his salary while incarcerated either as he is just another piece to the corruption puzzle that sinks our state with the one party ruling class.

  3. Eric 2015-10-22 11:05

    Cory, another question would be how can Mr. Witte be the superintendent at both Wessington Springs and Lower Brule and run his consulting business? Maybe he’s like Dr. Graves and doesn’t get to sleep because he’s devoting his entire time to his contract(s)?

  4. larry kurtz 2015-10-22 11:11

    Sibby has been right all along. It does make one wonder if all the federal money coming into South Dakota is being funneled into Republican pockets even as the party decries Big Government while telling lies about local control.

  5. mike from iowa 2015-10-22 11:28

    What happens if I get caught driving while my license is revoked?

    Driving while your license is revoked for a test refusal or a DUI conviction should be avoided, as it is a separate criminal offense. If you have more than one DUI conviction in the past 10 years, and you are convicted of driving after a revocation, you face mandatory jail time.

    South Dakota law also says the first 2 convictions are misdemeanors. The rest are felonies. 3 stikes should land you in prison for life-right?

  6. Eve Fisher 2015-10-22 11:29

    Well, Larry, so far it certainly looks like it. God knows none of the Gear Up money made it to the Native Americans it was supposed to help – it all went in “salaries and supplies.” And who knows how many other grant programs have come through South Dakota with little or no impact on anybody they were designed to serve?

  7. mike from iowa 2015-10-22 11:30

    I’m gonna guess this tool’s 2nd amendment rights to drive drunk trump John Q Citizen’s public safety rights.

  8. Kurt Evans 2015-10-22 11:44

    Cory wrote:
    >“Witte’s wife, Gwyneth Dean-Witte, also works for MCEC as a Title III coordinator. MCEC hired Dean-Witte in May 2014 for $50,000.”

    Gwyn and I went to high school together, and I’ve worked for Lance in the Wessington Springs school system. I regard them both as friends. They separated around five years ago, and I believe they’re divorced.

    Jerry wrote:
    >“Mr. Sol, this 5th charge against him should mean a Sioux Falls change of address for him two times ago.”

    Maybe you should read the article, Jerry. It’s more than four years old, and it says this: “Since state law only looks back ten years this would be considered only Witte’s second DUI in that span, so it’s still considered a misdemeanor.” For the record, I’m not sure how any of this is relevant to MCEC.

    Larry wrote:
    >“It does make one wonder if all the federal money coming into South Dakota is being funneled into Republican pockets even as the party decries Big Government while telling lies about local control.”

    I’m pretty sure Lance is a far-left Democrat.

  9. Spike 2015-10-22 12:08


    He’s freaking trying to kill somebody out there! I don’t care his politics. It is relevant to MCEC, Cause he was driving around drunk while he was working for them.

    If he’s your friend call him n intervene. Please

  10. caheidelberger Post author | 2015-10-22 12:19

    Kurt: a far-left Democrat?! Well, that should deflate any complaints that this story is just political hackery. ;-)

    Eric, Witte says this about his apparently ongoing experience superintending the troubled Lower Brule schools:

    Lance has taken on a new and exciting role as an associate with the American Indian Institute for innovation (AIII). In his role as an associate with AIII, Lance currently serves as Superintendent of Lower Brule Schools. During their short time at Lower Brule, AIII has seen significant progress in creating a culture of learning, which has led to significant gains in student achievement [Lance Witte, LinkedIn profile, downloaded 2015.10.22].

    Spike, it appears Witte is getting help:

    He hasn’t made the papers for DUI since 2011.

  11. Dana 2015-10-22 12:37

    “And who knows how many other grant programs have come through South Dakota with little or no impact on anybody they were designed to serve?”

    The misuse of funds came to light through terrible tragedies, and revealed corruption in organizations and in handling these funds. Are the other educational cooperatives being checked for misuse of funds? How much corruption is going on, and continues to go on because no tragedy shines the light on them? Seems there is a huge need for oversight, controls, etc. in order to be more responsible.

  12. jerry 2015-10-22 12:48

    Mr. Evans, I am not sure how the Drinking charges relate other than to show that for most folks, those kinds of infractions mean some kind of punishment for you, unless you are connected. The gist of it all seems to point that those that get the contracts do not seem to even have to show a resume other than a friend of a friend. I must have missed the call for bids on these projects, did you get one Mr. Evans?

  13. Craig & Ronette Guymon 2015-10-22 13:01

    The Mid Central Education Cooperative’s Board Meeting Minutes show that in addition to Mitchell School District 17-2 Superintend of Schools Joseph Grave having bellied up to the SD Secretary of DOE’s feed bunk at Mid Central, there are at least two more Mitchell educators currently feeding on public funds at Mid Central:

    • Diane Olson is the Region 3 ESA Director; she was a MSD 17-2 teacher in Mitchell for over 20 years; first, second, third and fifth grade classroom teacher, plus Reading Recovery. As an education specialist Diane has facilitated classes, workshops and coaching sessions related to K-12 literacy. For FY-2016, Diane Olson will receive a $84,372.15 salary. Mrs. Olson is the wife of Ed Olson – retired MSD 17-2 elementary principal and former SD Legislator (GOP).

    • From Sept 2013 to Sept 2015 Catherine Raak has received stipend and expense payments from Mid Central from the Edgenuity Course and My Foundations Lab (high school student math innovative lab and virtual school educational programs). Catherine is a stay at home mom and the wife of Nathaniel Raak, Mitchell Technical Institute mathematics instructor. Mrs. Raak is the daughter of Supt Joseph Graves.

  14. Craig & Ronette Guymon 2015-10-22 13:03

    Schoenfish & Company audit report of federal grant programs for Fiscal Year 2013 states under Audit Finding 2013-003, “The Mid Central Educational Cooperative purchased two vehicles without advertising for competitive bids as required by SDCL 5-18A-14. This is the first audit in which a similar deficiency has occurred … SDCL 5-18A-14 states in part, ‘a contract for the purchase of supplies or services … that involves the expenditure of twenty-five thousand dollars of more, the purchasing agency shall advertise for bids or proposals.”

    Gut-check continues to asking if former SD Education Secretary Rick Melmer and former SD Indian Education Director Keith Moore, who from July 2013 – Oct 2013 did not prepare activity logs/time sheets, were provided with the two vehicles that were paid for without advertising for competitive bids. Common sense says a MCEC Business Manager would not have had the authority to authorize and approve these two illegal no bid contracts. Who authorized and approved purchasing these two vehicles without advertizing for competitive bids?

  15. MC 2015-10-22 13:06

    Maybe a visit by our friendly neighborhood State Auditor (or team of auditors) once a year.

  16. larry kurtz 2015-10-22 13:11

    Clark, no earth hater state auditor has the balls to do that. A better idea would to have inspectors general from every federal agency descend on Pierre for audits every year.

  17. Kurt Evans 2015-10-22 13:30

    Jerry wrote:
    >“I must have missed the call for bids on these projects, did you get one Mr. Evans?”

    I worked under a federal grant at Cornerstones Career Learning Center in Huron for about six months in 1998 and 1999. We did the best we could with it, but the inefficiency and waste troubled me deeply.

  18. jerry 2015-10-22 13:43

    When you say waste Mr. Evans, please elaborate on what you have seen during those 6 months, if you would.

  19. jerry 2015-10-22 13:51

    Team Guymon have come up with some interesting morsels that seem to show how nepotism works in the world of the grift. If you involve your blood in the mix, you find that there are not so many loose lips. The Godfather movies must have been highlights to watch with popcorn in hand for this bunch. A well oiled operation until maybe someone did not get their payoff, always causes problems in the movies as well.

  20. Kurt Evans 2015-10-22 14:04

    Jerry wrote:
    >“When you say waste Mr. Evans, please elaborate on what you have seen during those 6 months, if you would.”

    It would be hard for me to remember many specifics from nearly 17 years ago, Jerry, but it was largely a matter of adding up wages and comparing that total to the results we produced.

  21. Spike 2015-10-22 14:19

    Thanks Cory, I’m proud of Witte for facing his problem. Alcohol is a dangerous beast.
    And I’m pretty niave….cause I didn’t know you could be (or more importantly, SHOULD BE) superintendent for two schools at the same time. My sister was a Superintendent on a rez school for 5 years. N she had plenty of work to do with that one job. For sure…..

    But there’s a lot I don’t know about federal flow thru funds in pierre, but I’m learning a lot. On this blog.
    Thanks to all for that.

    Who’s going to take on Thune?

  22. jerry 2015-10-22 14:23

    Very good Mr. Evans, in political speak, cya which seems to always be the problem. Hard to not think that the program was simply another form of corruption designed to fail. Glad you removed yourself from it, it is to bad that others cannot bring themselves to do the same.

  23. Jody 2015-10-22 14:52

    Is the Wessington Springs school system no longer a MCEC member school? It would appear to me that if they are it would be a huge conflict of interest for their superintendent to also be a consultant.

  24. jerry 2015-10-22 15:38

    So how is old Heather be thy name, Wilson fairing from all of this Gear Up? By the way, who else was on the payroll for Gear Up? I tried to look back and cannot find the list if there is one. How many hands were in the cookie jar?

  25. Porter Lansing 2015-10-22 16:16

    I’ve just written to President Obama and asked for an independent investigator. He’s an honest man and e-mails addressing corruption within funds to help minority kids mean something.

  26. James cadwell 2015-10-22 16:48

    Ethics committee? Why not require them to be honest and if not throw the book at them. Seriously, this is just a game of cat and mouse. It is interesting that when tribal officials were found guilty in the recent past they all when to prison not jail but prison. Most served 3 years. I bet not a one of these so call officials will serve one day.

  27. LK Burghardt 2015-10-22 17:41

    Make the consultants pay back the money that they accepted! My son, who is about to graduate from Augustana University with a teaching degree in December, taught at the Gear Up program this summer. He worked with the freshmen students and spent nearly every waking moment with them. He taught them math and science, he ate meals with them in the cafeteria, and he even supervised the dorms that they lived in. It was one of the most meaningful experiences of his life. He shared stories with us of what the kids taught him about their culture and their life on the reservation. He learned so much and is a better person because of the experience. This tragedy could have been avoided with proper oversight. My son’s wish is to return to teaching on the SDSMT campus for at least three more summers to see ‘his kids’ graduate from the program. He didn’t receive any consultant fees and he spent at least 12 hours per day, weekends included, with the kids. He didn’t ask for extra money for the extra hours he spent working. These are the kind of people we need working for Gear Up!

  28. Spike 2015-10-22 18:18

    LK Burghardt……

    Thank you,

    by the way…we pay teachers well on the rez..

  29. MC 2015-10-23 06:13

    Larry, that is not a half bad idea.

    Hire an external accounting firm do an audit of all state programs. and have federal AG audit federal programs in the state.

    But who would they report the results of the audit to?

  30. caheidelberger Post author | 2015-10-23 06:50

    LK Burghardt, it sounds like your son’s experience teaching at GEAR UP validates the value of the program. May I ask—did he room on campus in the dorms as well? Was he on call 24 hours a day? What was his salary for teaching there? I’d love to do a bang-for-the-buck comparison of his direct work with the kids with Melmer, Moore, and Witte’s work behind their desks and at their symposia on strategic planning.

  31. caheidelberger Post author | 2015-10-23 06:53

    Jerry, could we count on tribal colleges to run GEAR UP with any less risk of corruption than the BOR or other state agencies? The tribes have plenty of issues with corruption, as evinced by Chairman Jandreau’s apparent diversion of millions in federal grants to the Lower Brule tribe.

  32. Rod Hall 2015-10-23 08:00

    Mitchell Supt Joe Graves will neither confirm nor deny that he applied for and was considered for Superintendent of the Sioux Falls Public School System a few months ago. If Graves did not apply it would be so easy to answer that question. If Graves did apply and said he did not apply, perhaps some brave soul who knows that Graves did apply and was interviewed, might just step forward with the truth.

  33. OJ Semans 2015-10-23 09:03

    The Rosebud Sioux Tribe has placed an offer on the table with SD Education Department in that the Tribe would handle the Gear up funds and work with other Tribes in ensuring the youth truly benefit from the program. The second offer was to work with the Great Plains Tribal Chairman’s Association to administer the program with the same emphasis on reaching and helping those the program was meant to help.

    As of today no response from SD Education.

  34. jerry 2015-10-23 09:35

    Cory, Oglala Lakota College administers the Head Start/ Early Head Start program on the Pine Ridge reservation. No small task. I think that education should be run by educators that are familiar with the students they wish to reach out to. If there are no real Native educators in a program that deals exclusively with Native students then it is really designed to enrich those that do it half way. I also would like to add Sinte Gleska University in Mission, South Dakota as another possibility. Both of these would be much better suited than some dude out of Mitchell that clearly is obligated by his own contract with his school district to administer this important program.

  35. caheidelberger Post author | 2015-10-23 10:36

    If OLC can run Head Start, they should be able to run GEAR UP. I wonder, Jerry: could OLC host the GEAR UP summer camp? Would GEAR UP be more effective if held at a tribal college instead of School of Mines? Or do the kids get a better experience by going off the reservation to the big city for those six weeks?

    O.J., thanks for that update! I wonder which agency is better positioned to maintain continuity in GEAR UP right now: the Board of Regents with its obvious connection to the main camp provider, School of Mines; or the Rosebud Sioux Tribe, with its connection to the schools and leaders involved in providing GEAR UP service year-round and getting kids into the program?

  36. jerry 2015-10-23 13:12

    I only mention that Oglala Lakota College to me would be more well suited to administer this program for who they are and what their mission is
    I would also note that there is also a campus in Rapid City so there could be that reach out as well. I have had my own close family go to Oglala Lakota College to get their degrees and know they received a very good education there for their futures. The School of Mines is no second rate school, that is a given, so that is not the reason I would suggest going another route. My suggestion only brings another strange fact to me about corruption that has fingerprints at the Board of Regents involving the EB-5 at Northern. Why should they be the only consideration for Native higher education administration?

  37. caheidelberger Post author | 2015-10-23 17:06

    Thanks for reminding me of the RC OLC campus, Jerry! How many kids could it host for six weeks? I’m speaking from the outside, but I’m thinking that Rapid City, with access to more recreation for the kids, is a better location for this camp than Kyle. Or maybe we could consider a split camp: two weeks at Kyle, four weeks at Rapid City?

  38. jerry 2015-10-23 17:14

    As far as I know, there are no lodging facilities in either place other than the nice motel in Kyle that is just across the road from the college. The School of Mines has those kinds of rooms available , if I remember correctly, during the summer. They could stay there if they could accommodate them. The most important process on this would be to take the lucrative funding for this program and put that into Native administrators for the good of Native students. Volunteers could be screened and selected for the children as well as it is now.

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