No One Accepts GOAC Invitations to Testify in Person on GEAR UP

The Government Operations and Audit Committee may feel like an ugly duckling. GOAC voted unanimously to invite four people to its August 29 meeting to testify about the GEAR UP/Mid-Central scandal, and all four people have declined that invitation.

Under advice of state counsel Paul Bachand, Education Secretary Melody Schopp and her financial officer Tamara Darnall have declined, citing the state’s pending backstop litigation against Mid-Central to reclaim any funds from the defunct cooperative’s member schools that the feds may try to reclaim from the state over the GEAR UP foul-up.

GOAC at first seemed to invite Rep. Kyle Schoenfish to testify about his family auditing firm’s work for Mid-Central. A Legislative staffer acting on his impression of direction from “a majority of committee members” (which majority appears nowhere in the unapproved July 24 GOAC minutes) redirected that invitation to Kyle’s dad Randy, who managed the Mid-Central audits. Neither Kyle nor Randy responded directly to GOAC’s invitation; instead, Schoenfish & Company responded corporately and declined to come speak in person next week.

Schopp, Darnall, and Schoenfish & Company did at least provide written answers for GOAC to mull next week. Brinda Kuhn, who made $1,209,840 doing grant work for Mid-Central for which the Department of Legislative Audit found little documentation and blatant conflict of interest and some of which Attorney General Marty Jackley argues was made under illegal contracts, had her lawyer Scott Sumner of Rapid City tell GOAC to fly a kite:

Kuhn offers no excuse of pending litigation as Schopp and Darnall cite. Kuhn offers none of Schoenfish & Company’s golly-gee-happy-to-help fawning (“We are quite flattered you feel our background as auditors could be of assistance…”). Kuhn offers not one hint of her knowledge of what happened at Mid-Central with GEAR UP and the other federal grant programs on which she got her hands. Kuhn doesn’t even try to mimic the audacious rebuttal EB-5 czar Joop Bollen presented to GOAC in November 2014 in response to questions about the GOED/EB-5 scandal. Kuhn just has her lawyer remind GOAC that their invitation was “a request for a voluntary response” and then “respectfully decline” to offer any response, written or in person.

I would still make the argument that I made during the EB-5 hearings in 2014 and which Senator Stace Nelson made during the last GOAC meeting in July: if GOAC has the power to demand information from state officials about state programs, it has the power to demand information from whatever private contractors and other entities the state engages to carry out those programs. SDCL 2-6-2 says GOAC should be able to review “any phase of the operations and the fiscal affairs of any department, institution, board, or agency of the state….” “Any phase” should include operations farmed out to other entities. Privatization should not create a veil of secrecy around state programs.

I’ll cut Schopp, Darnall, and Schoenfish & Company some slack for their willingness to respond in writing. GOAC should now get serious about its subpoena power and demand that Brinda Kuhn finally inform the public what she knows, what work she did, and how much public money she got from the work the federal and state Departments of Education made possible at Mid-Central.