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Lower Brule Corruption Connected to Phelps, Westerhuis, and GEAR UP?

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:


  1. private richard 2016-03-29

    We The People need the Justice Department to come down hard on the Jandreau Crook Clan and those connected. It’s disgusting what he and his cronies at Lower Brule got by with for so long. I hope the investigation doesn’t let up, because I think there’s a lot to learn if they keep digging. Don’t let Jackley hide the ball with Phelps/Guericke. imo it’s deeper than that and the good old boys have had a lot of time to hide the money. From one county over I am not close enough to this situation to know who’s protecting who, but I can surmise it, and if the feds and Jackley keep probing, the worms will wiggle.

  2. Scott 2016-03-29

    Could there also be a Lance Witte connection here? Wasn’t he connected to AIII and is the Supt. of Lower Brule School?

  3. MOSES 2016-03-29

    Will the Department of Education in the state be looked at to.

  4. CLCJM 2016-03-29

    This very sarcastic but can not help myself. The white majority always wanted the native population to “assimilate”, whatever that means. I think it means to disappear but I digress! Just wondering if adopting the corruption and greed that has become the norm in SD means the tribal “leaders” involved have finally “assimilated”!!

  5. Francis Schaffer 2016-03-29

    Can RICO come into play at some point, not just on this but any of the other issues?

  6. leslie 2016-03-29

    Clcmj- my perspective on assimilation and corruption is one involves an enemy. Some % of racism against Indians persists but is getting better. Otoh, EB5 and if related MCEC, Lower Brule & goverment corruption and official cover-up w/i the state, if not vigilantly stamped out by law enforcement & criminal justice, they must be heavily sanctioned for their own incompetence/corruption. Racism is ignorance, but greed is criminal. That is the true purpose of prisons. White collar imprisonment will solve that problem.

  7. grudznick 2016-03-29

    Mr. CLCJM, I think the issues are about corruption. It is not just Mr. Sibby who parrots the word “corruption! corruption! cracker!” about. It is others, too. I say the corruption is rampant and happens in your local Kiawanis Club daily. Bernie Sanders’ socialism is the only answer.

    Of course grudznick is yanking on your rope here. Bernie is not any answer.

  8. Mark Winegar 2016-03-29

    Its time Native American got the benefits they deserve.

  9. Woawacin Suta Win 2016-03-30

    That’s exactly what it means!! @ CLCJM Tribal “leaders” handling millions but no one sees any results from those millions of dollars…they are totally assimilated to white ways – corrupt, greedy, amoral. I believe Stacy Phelps will be vindicated and they’re going after him and 2 others is a way to confuse and obscure the state’s high level of corruption in this whole situation. As in Lower Brule – the feds looked away for decades while this corruption took place. They certainly can’t hold tribes to standards they do not hold states to! As a Native American living in South Dakota but raised in California…I see things others cannot and the racism and corruption in this place is RANK!

  10. private richard 2016-03-30

    Woawacin Suta Win: I agree, a large percentage of whites in this region are racist towards native people. There’s a lot of decent white people here, but there’s so many that are extremely ignorant. It’s a shame people here and elsewhere don’t give a crap about learning the history.

    To borrow a phrase: “We all know that people are the same wherever you go. There is good and bad in everyone,” is something I’ve learned from living in and travelling through a number of places in this country and about a dozen foreign countries. Wolakota!

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