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Phelps and Westerhuis Discuss Moore, Melmer, Competition with TIE in Feb 2014 Texts

Exhibit 5 from Attorney General Marty Jackley’s new filing in the state’s case against GEAR UP player Stacy Phelps shows that Rick Melmer, the Education Secretary turned consultant who made six figures off GEAR UP contracts after steering the federal grant to his home folks back in Platte, may have some more questions to answer.

KSOO’s Beth Warden posts the document, which shows three text conversations (the participants are cited by e-mail address, but the messages read more like phone texts or Facebook messages) between Phelps and Mid-Central Educational Cooperative business manager Scott Westerhuis. One of those text conversations took place on February 28, 2014. Exhibit 5 lists these lines in reverse chronological order; I have cut and repasted them in chronological order and spaced them to mark changes in speaker:

Scott Westerhuis and Stacy Phelps, text conversation, copied and repasted in chronological order from Attorney General Marty Jackley, Exhibit 5, Notice of Intent to Introduce 404(b) and Res Gestae Evidence, State v. Phelps, Case #11CRI16-000102, filed 2016.06.27.
Scott Westerhuis and Stacy Phelps, text conversation, copied and repasted in chronological order from Attorney General Marty Jackley, Exhibit 5, Notice of Intent to Introduce 404(b) and Res Gestae Evidence, State v. Phelps, Case #11CRI16-000102, filed 2016.06.27.

This text is filled with these things, this, and it, pronouns without antecedents. Scott Westerhuis is dead, so the state will have to provide more bracketing text or call Stacy Phelps to the stand to tell us what exactly he and Westerhuis were talking about that night over that nearly three-hour span. But we can fill in some names:

I’ll need to spend some time trying to place “walt”, “jodi”, and “sams”.

But on February 28, 2014, it appears Keith Moore was “asking way to[o] many questions” and making a decision to give someone a contract that didn’t please Phelps and Westerhuis, while Rick Melmer was “soft selling” something and “trying to defer the conversation.” Whether Phelps is being sarcastic in saying he likes Melmer’s soft selling is not clear from the text. Phelps anticipates TIE fighting back, and Westerhuis anticipates “a lot less money coming in.” (Note that Westerhuis expresses this financial concern two months before a long stretch of big-dollar discrepancies in MCEC’s financial reports suddenly ceased.) And Phelps expresses concern that AIII, the non-profit American Indian Institute for Innovation that he and Westerhuis were allegedly using to pilfer GEAR UP grant money, will be “kicked out.”

Keep those e-mails coming, A.G. Jackley. It appears there are more shoes to drop, or at least players to testify to explain just what the heck was going on between Phelps and Westerhuis in the GEAR UP scandal.


  1. ColtarTheBarbarian 2016-06-28

    The readout appears to be google’s former g-chat feature (both embedded in gmail on a non-Mobile browser and available in external app on mobile), currently rolled into into google hangouts and still accessible via gmail In non-mobile web browser, I believe.

  2. mose11 2016-06-28

    Will their be a plea deal on this one

  3. The Legend 2016-06-28

    “Do as I say, don’t do as I do” will be the newest sermon at the next Fellowship of Christian Athletes breakfast.

    Melmer a part of the SD power circle will stay clean on this, watch him sell out those below if need be. Just remember what I have heard from his lips before, it is all about the kids.

  4. caheidelberger Post author | 2016-06-28

    Too early to tell, Mose! Depends on what else comes out… and perhaps on whether there’s material here that can sink Melmer and other powerful friends and whether the state will allow that info to come out.

  5. Vic 2016-06-29

    Walt might be Walt Swan, AIII employee at that time. walt and stacy had a big falling out the spring of 2015.

  6. Kim Dougherty 2016-06-29

    Walt is Walt Swan. He was one of our 3 superintendents in the fall of 2015 in Lower Brule. He suddenly left in the fall and went to Pine Ridge.

  7. mike from iowa 2016-06-29

    sams are surface to air missiles. The kind we gave to the mujahideen to fight the Soviets in Afghanistan. What were these two up to? (snark)

  8. Steve Sibson 2016-06-29

    “Heather Schopp (daughter of Education Secretary Melody Schopp).”

    Did not know that. Typical crony educationalism.

  9. caheidelberger Post author | 2016-06-29

    Sibby, this is one area where your discussion of cronyism is perfectly relevant.

  10. Interested South Dakotan 2016-06-29

    Heather Schopp was educated to be a chiropractor…..who hired her at Black Hills Special Services Cooperative?……interesting

  11. Timoteo 2016-06-29

    I am glad that the state is trying to follow up on this. It wouldn’t have surprised me if the issue had just disappeared.

  12. Rorschach 2016-06-30

    “Four Americans died, yet no one has been fired. No one even missed a paycheck,” said Rep. Ed Royce, R-Calif.

    Of course he was talking about the State Department after Benghazi, not the Education Department after Gear Up. The body count from Gear Up was higher.

  13. mike from iowa 2016-06-30

    I think that is called nepotism,Sib.

    Here is Miss Schopp’s duties-
    Grant Evaluator
    Black Hills Special Services Cooperative
    June 2013 – Present (3 years 1 month)Rapid City, South Dakota Area
    * Evaluate grants to assess deliverables/outcomes progress
    * Provide empowerment feedback to ensure successful outcomes
    * Collect and analyze data
    * Facilitate benchmark meetings with leadership and grant stakeholders
    * Provide yearly written reports on grant progress

    Anybody wondering what I’m wondering about this and previous family deals that didn’t work out so good?

  14. caheidelberger Post author | 2016-06-30

    “Four Americans died”—indeed, Ror! Where is the outrage in Pierre? Where are the rolling heads? Where are the elected officials whom we will hold responsible and refuse to elect ever again?

    For that matter, where is the interim Legislative committee that should be issuing subpoenas and holding live hearings on South Dakota Public Television?

  15. Private Richard 2016-06-30

    Cory, they are MIA. I suggest a 7 million dollar Select Committee to investigate where these clowns are.

  16. Roger Cornelius 2016-06-30

    Now that Trey Gowdy has pretty much cleared his calendar on Benghazi, he should immediately open an investigation into 4500 plus Americans killed in Iraq.

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