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DLA Never Audited First GEAR UP Grant and Probably Never Can

One of the few things we learned from the Government Operations and Audit Committee’s mostly toothless hearing on the GEAR UP/Mid-Central scandal was that Scott and Nicole Westerhuis apparently effectively hid and destroyed all records of the first six years of their operation of federal GEAR UP money for the Department of Education.

The first GEAR UP grant, effective from 2005 through 2011, was managed by the Oceti Sakowin Educational Consortium, a paper shell created by Scott Westerhuis in 2003. Speaking Friday to GOAC, Tim Flannery of the Department of Legislative Audit said DLA didn’t look for OSEC’s documents because the first GEAR UP grant was long gone… as were, apparently, its records:

Flannery said legislative auditors were “pretty much exclusively concerned” about Mid Central starting in 2014.

“The prior GEAR UP one was gone and completed,” Flannery told committee members. “We were going where the evidence took us, where the risks were.”

Russ Olson, who oversees local government examinations for the Department of Legislative Audit, said Oceti Sakowin had essentially ceased to exist.

“There wasn’t a structure at OSEC,” Olson told the committee. “They had pretty much ceased operations by the time we were looking at this.”

Olson said legislative auditors decided to focus on Mid Central’s activities. Oceti Sakowin wasn’t necessarily the focus at that time, he said.

Said Flannery: “There was no one to talk to, because the Westerhuises ran the financials.”

“So hypothetically you couldn’t find anything,” Rep. Jean Hunhoff, R-Yankton, said at one point Friday. She is the committee’s vice chairwoman.

“Wherever those records disappeared,” Hunhoff continued, “they (the records) went when they (the Westerhuises) went” [Bob Mercer, “In Mid Central Probe, Legislative Auditors Now Say They Didn’t See One of the Targets,” Watertown Public Opinion, 2017.10.07].

After skipping most of Thursday’s GOAC session in Sioux Falls to watch her boys’ cross-country meet, GOAC chair Senator Deb Peters asserted at Friday’s meeting that no money was missing from the first GEAR UP grant. But as persistent corruption bulldog and complete thorn in Peters’s side Senator Stace Nelson noted, how do we know no money is missing when DLA didn’t check and when the records apparently all went up in flames in the Westerhuis fire (or to an undisclosed location in that missing safe)?

Remember, Office of Indian Education director LuAnn Werdel said she had concerns about corruption in GEAR UP back at the beginning of 2011. Those concerns had to have arisen during the first GEAR UP grant that the Westerhuises were managing through OSEC. But we can’t check those concerns, because somehow, the state Department of Education allowed financial records for a federal government education grant to be held entirely by private contractors who appear to have destroyed the evidence.

Someone help me out here—when did Scott Westerhuis build that full-size basketball court and gym on his property?


  1. Roger L. Elgersma 2017-10-09 12:07

    When you say they “DLA didn’t look for OSEC’s documents” is different than they were gone. Just more records that they did not want to find or expose. It never made sense that a suicidal person would burn the evidence when he would be gone anyways. But if corruption had run deep for a long time, murderers would want to burn the evidence. And have a big fire to burn it all. May even have brought in more documents for the bon fire. But if it appears to be just a recent problem, people would not so clearly see the corruption and by how many were in on it.

  2. mike from iowa 2017-10-09 12:16

    because somehow, the state Department of Education allowed financial records for a federal government education grant to be held entirely by private contractors who appear to have destroyed the evidence.

    Records on EB-5 just up and walked out of NSU in the arms of suspected Joop Bollen with little or no fanfare and a damn sight less oversight than was called for.

    What a coincidence. Almost seems habit forming for the sorry state of South Dakota, donut?

  3. Cory Allen Heidelberger Post author | 2017-10-09 12:38

    Roger, I can still make a rational case for a suicidal man burning the records from GEAR UP #1. Maybe he wanted to make sure the state couldn’t seize his assets. By burning the GEAR UP #1 records, he at least preserved the estate to pay of remaining debts.

    But yes, your suggestion is also rational. Destroying the evidence means far more to the living accomplices than the dead.

  4. Lynn Ryan 2017-10-09 14:18

    Don’t the Feds get copies of the paperwork?

  5. Mr. Sol 2017-10-09 19:24

    Mr H – I appreciate this post. One of the things that Senator Nelson and some others have talked about when interviewing witnesses is the ruthless and even the fear factor that does exist in this State. Personally I doubt you will get a direct answer to the question that you posed in your closing sentence.

  6. grudznick 2017-10-09 20:35

    Mr. H, why does number 416 look so goofy in that picture you put a blue link to?

    Where do you stand on parental responsibility to attend a child’s non-debate and un-thespian related extra-curricular activities? Are you against it, or for it?

  7. Cory Allen Heidelberger Post author | 2017-10-09 20:36

    Lynn, I would think so… but would OSEC or Mid-Central have ever sent documents straight to DC? Wouldn’t all GEAR UP filings have to flow through DOE in Pierre?

  8. Cory Allen Heidelberger Post author | 2017-10-09 20:37

    Actually, Mr. Sol, I would think I could get a direct answer to that question by visiting the Charles Mix County courthouse in Lake Andes and asking the county assessor’s office to pull the file on the property for me. I need to get back down that way again….

  9. Cory Allen Heidelberger Post author | 2017-10-09 20:46

    Grudz, you’re not pulling me down that rabbit hole. #416 bravely runs cross-country; he’s entitled to look whatever way he wants.

    Any parent must weigh family responsibilities with willingness to serve in the Legislature. If the issues matter, the chair should be there.

  10. grudznick 2017-10-09 21:00

    Clearly, Mr. Nelson’s insaner than most issues did not matter. The majority already agreed against Mr. Nelson. It’s just ax grinding by a crazy man that the libbies love to jump onto, as if they are throwing gasoline on a molten marshmallow party.

    grudznick approves of Ms. Peters attendance at her child’s event.

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