Following up on a 2015 Human Rights Watch report alleging massive corruption on the Lower Brule Sioux Reservation, the Justice Department’s Office of the Inspector General reported last week that Lower Brule tribal officials misspent at least $938K out of $2.7 million in grants that the Justice Department intended for crime prevention, victims’ needs, drug courts, and other reforms. Human Rights Watch contends the losses to corruption may be more on the order of tens of millions across a variety of federal programs, including education.
And who’s been running education at Lower Brule?
In December 2013, the Tribal Government removed much of the school administration, dissolved the school board, and contracted with the American Indian Institute for Innovation, a nonprofit educational firm, to help restructure and take over administration of the schools [Human Rights Watch, Secret and Unaccountable:The Tribal Council at Lower Brule and Its Impact on Human Rights, 2015.01.12].
The American Indian Institute for Innovation? Beth Warden of KSOO hears AIII and talks to Arvind Ganesan from Human Rights Watch to connect some dots:
Ganesan says although many of the questionable practices are direct from federal money to the reservation, two familiar names from the State of South Dakota are also a part of the flow of money: Scott Westerhuis and Stacey Phelps and their subsidiary of Mid Central Educational Cooperative, The American Institute of Indian Innovation (AIII):
There have been several million dollars diverted out of school funding at Lower Brule and as a result they had to go into restructuring which is a federal requirement when you have really low school performance. And so they hired AIII Stacey Phelps, which at the time was the head of AIII, and Scott Westerhuis was the COO. So they (Lower Brule) brought in AIII to manage Lower Brule schools and that had been going on for about two years.
According to Ganesan, the chairman of the Tribal Council, Michael Jandreau, and his ruling majority have held power for more than 30 years. Ganesan says the financial dealings were undisclosed while education, safe water and other programs that were to be financed through grant money clearly suffered [Beth Warden, “Gear Up, Westerhuis and Phelps Role in New Government Report,” KSOO Radio, 2016.03.29].
AIII listed Jandreau as one of its trustees in South Dakota’s January 2010 “Race to the Top” federal grant application to build an American Indian STEM boarding school in the Northern Black Hills. Neither Phelps, Westerhuis, nor AIII are mentioned in the OIG report. However, that report looks only at DOJ grants, and OIG says it is still investigating Lower Brule’s finances.
Ganesan doesn’t tie any fund diversions directly to AIII. He tells Warden that the money trail he’s seen so indicates the Lower Brule tribe diverted federal grant money to its general fund and spent it on items that haven’t been fully explained. Listen to Warden’s full 12-minute conversation with Ganesan below: