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Werdel Met with Moore, Westerhuis, Phelps, and Guericke to Express GEAR UP Concerns

In anticipation of his scheduled grilling by fellow members of the Government Operations and Audit Committee yesterday, Senator Stace Nelson sent two recordings of phone calls with GEAR UP whistleblower LuAnn Werdel to multiple state officials and journalists. Senator Nelson also came prepared with legal and procedural arguments that kept GOAC chair Senator Deb Peters from putting him in any sort or witness chair.

However, the recordings Senator Nelson released yesterday, of phone calls with LuAnn Werdel on July 25 and July 26 of this year, contain important information about what Werdel said and did about GEAR UP up to the moment of her firing by Secretary Schopp on January 10, 2011.

In her July 25 conversation with Senator Nelson, Werdel said that in her capacity as director of the Office of Indian Education, she looked at the GEAR UP budget and saw $60K to $70K salaries going to people whom she said were doing no work, such as GEAR UP manager Stacy Phelps’s ex-wife and a man named Jay Roman, who was one of the recipients of money under several illegal contracts allegedly issued by the Mid-Central Educational Cooperative.

Seeing such big salaries for no apparent work, Werdel called former Indian Education director Keith Moore to ask what was going on with GEAR UP. Werdel told Nelson that that conversation took place while Moore was chief diversity officer at USD under Dean of Education and former Education Secretary Rick Melmer. If Werdel’s memory is correct, that would place her conversation about GEAR UP with Moore sometime between August 2009 and June 2010. Werdel said Moore, who then was still the designated project director for GEAR UP, came to Pierre to meet with her in person. According to Werdel, Moore said of the inflated contracts (Werdel’s exact words), “Sometimes that’s the cost of doing business.”

Werdel told Nelson on July 25 that she later called Stacy Phelps, Mid-Central exec Dan Guericke, and Mid-Central business manager Scott Westerhuis to a meeting in Pierre. She told them that whatever they were up to with all the GEAR UP money had to stop. On July 26, Werdel told Nelson that Westerhuis told Werdel that she didn’t get how things worked. According to Werdel, Westerhuis said that Mid-Central was the fiscal agent for the grants, that Phelps worked for Mid-Central, that Phelps had the ear of Moore and Melmer, and that Moore and Melmer were really good friends of Dennis Daugaard. Thus, as Werdel summarized Westerhuis’s response, arguing with Phelps, Moore, and Melmer is really arguing with Daugaard.

In referring to Daugaard, Werdel seems to be indicating that this noteworthy meeting took place sometime after Daugaard’s election as governor in November 2010. Daugaard was inaugarated on January 8, 2011, two days before Werdel was asked to resign.

Werdel told Nelson that after that Pierre meeting, Phelps, Guericke, and Westerhuis began their campaign to turn Education Secretary Tom Oster and his lieutenant and soon-to-be Secretary Melody Schopp against her. Werdel said in her July 26 phone call with Nelson that her job performance reviews had been solid and that Secretary Oster had said she was the best Indian Education director the state had had. Werdel also told Nelson that in December 2010, Schopp had promised to “protect” Werdel from Phelps, Moore, and Melmer, but Werdel’s questioning of the grants made that apparent goodwill disappear.

Werdel told Nelson that she wrote an e-mail on January 10 to the “management team” of the Department of Education, over a dozen state officials, outlining her concerns about the federal grants being mishandled by Mid-Central and its subrecipients. Werdel says that fifteen minutes later, she was called into Secretary Schopp’s office and asked to resign. Then Werdel wrote the e-mail released by Secretary Schopp last week, the 8:39 a.m. e-mail in which Werdel refers to her repeated warnings about “what Stacy Phelps and Mid Central is doing with the GEAR UP grant and the College Access grant.” Werdel read that 8:39 e-mail over the phone to Nelson on July 25 and later sent him a copy, but she did not share the preceding e-mail that she says precipitated her firing.

Werdel also told Nelson about a curious conversation with Margo Heinert, a former school superintendent and Department of Education consultant and mother of Senator Troy Heinert. Werdel says that Heinert told her she was in the DOE office the day the Westerhuis murder/arson/suicide made the news in September 2015. Werdel said that Heinert called Werdel and told her that upon hearing the news from Platte, Secretary Schopp broke down, said the events were her fault, and said that she should have listened to LuAnn but didn’t do anything about it.

Recall that in her written response to GOAC question #39 relating to this alleged statement to Heinert, Secretary Schopp said, “Once again, it seems that a certain member of GOAC is attempting to blame the deaths of the Westerhuis family on me. That is reprehensible, and frankly bizarre, and I will not dignify it with a response.”

Werdel said in her July 25 phone call with Nelson that she has lived in fear for the last two years, wondering the Westerhuis murders were actually a hit and recalling that very influential people had told her to be quiet. Nelson had to ask Werdel many times to give him a  copy of the e-mail; nearly every time he asked, Werdel paused or evaded.

When Nelson asked about other documents in their July 26 phone call, Werdel did finally mention the apologies she wrote on January 11, 2011, after her dismissal, which contradict the alarms she raised in her January 10 e-mail. Werdel told Nelson, as she told the press Monday, that she wrote those apology e-mails “because I didn’t want anything to come back to me.”

GOAC decided yesterday to ask Werdel to answer some questions on the record about GEAR UP. Question #1 should be, “Please submit all e-mails and other dated documents containing the concerns you raised about GEAR UP and other grants to state officials.”


  1. The King 2017-08-30 07:21

    And yet, the sweet Melody can still be heard playing in the background……

  2. Joseph Voigt 2017-08-30 08:03

    Even if Werdel is as uncreditable as they come this doesn’t look good for the state

  3. Roger Elgersma 2017-08-30 12:21

    Now a lot of talk that they had no reason to think there was a problem. This info just makes it more real that it was a corruption problem and cover up since day one.

  4. Ridge 2017-08-30 13:56

    And no one will be held accountable. The whole bunch of thugs that perpetrated this corruption and incompetence will get off because of their political party affiliation.

  5. Jk 2017-08-30 17:21

    Thank you so much for the continuing coverage of this sordid mess. South Dakotans deserve to hear all the details of this incredible tale of corruption and greed.

  6. o 2017-08-30 18:31

    Cory, I really appreciate your coverage of this issue. I don’t usually fanboy, but I really am glad you are sticking with it.

    One line continues to jab at me: “Sometimes that’s the cost of doing business.” I continue to have two reactions to that sentiment in this context: 1) It seems like everyone except me (a teacher) has figured out how to make money from education, and 2) this is what happens when we allow education to be treated like a business.

  7. Cory Allen Heidelberger Post author | 2017-08-31 05:26

    Thanks, O, and others! You readers play an important part, too, in sharing this info with others and spreading the word that corruption isn’t just some conspiracy theory or Democratic fabrication but a real problem, perhaps the most significant problem, in South Dakota government.

    “Sometimes that’s the cost of doing business”—that’s a great line to focus on. A state official should be telling other state officials to ignore their duties and let corruption happen.

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