If a corporation brings a $550-million project to South Dakota, you can bet there will be government handouts, and you can bet the cronies handing out our cash will find a way to profit personally:
Steve Westra was South Dakota’s commissioner of economic development four years ago when the office first agreed to provide financial assistance for a CJ Schwan’s company project.
After leaving state government, he’s now a vice president for the company, which has benefited from state grant and loan approvals totaling $69 million.
All the while, the chairman of the state board that approved some of the aid, Jeff Erickson, has also been a member of the CJ Schwan’s board of directors.
The state funding is helping CJ Schwan’s with the construction of a $550 million food production plant in Sioux Falls that will have an estimated 600 employees — a project that the Governor’s Office of Economic Development has described as the largest single private investment in South Dakota history. The company, which is part of a South Korean global conglomerate known as CJ Group, has also opened an office with 50 additional employees in downtown Sioux Falls.
State Board of Economic Development minutes say Erickson abstained from discussion and votes on financial assistance for the company. Westra’s LinkedIn page indicates he waited a year after leaving state government to begin working for CJ Schwan’s, which is the state’s legally required waiting period for former state employees to benefit from a contract they were involved with, or to enter into a new contract with the state [Joshua Haiar, “Company That Hired State’s Former Head of Economic Development Benefits from $69 Million in Aid,” South Dakota Searchlight, 2025.12.19].
Westra left GOED in May 2023. He says on LinkedIn he went to work for CJ Schwans in May 2024. The law Haiar cites, SDCL 5-18A-17, says state officers and employees who approve, award, or administer state contracts can have any interest in or derive a benefit from those state contracts until a year after they leave their state jobs. But we might also want to look at SDCL 2-12-8.2 on lobbying:
No elected officer, department or agency head, or division director, or the highest paid employee reporting to such person may be compensated, act, or register as a lobbyist, other than a public employee lobbyist, during a period of two years after that person’s termination of service in the state government. A violation of this section is a Class 1 misdemeanor [SDCL 2-12-8.2, last amended 2017].
That two-year pause on lobbying after government service came from 2017 Senate Bill 131, one of the few provisions of Initiated Measure 22, the Anti-Corruption Act, that the Legislature implemented in full in an effort to assuage voter anger over the Legislature’s repeal of IM 22. CJ Schwan’s tells Haiar that Westra’s job is “to advise on business development and government relations matters.” Advising on government relations is often another way of saying lobbying. If Westra’s advice to his Korean corporate bosses during his first year in their employ included making any calls to members of the Legislature in which he once served or the Executive Branch to encourage any sort of state action, he could be guilty of violating that lobbying ban.
Republican and Democratic legislators find Westra’s quick trip through the revolving door problematic:
Sen. Tim Reed, R-Brookings, is the former CEO of the Brookings Economic Development Corp. He said the jobs and tax revenue generated by the CJ Schwan’s project will be a win for South Dakota and Sioux Falls, but “the optics” of Westra’s transition “are absolutely terrible.”
“I think there are some concerns with this,” Reed said. “The safeguards are supposed to be there with the one-year statute, but is that enough? I think we may need to revisit that.”
Rep. Erik Muckey, D-Sioux Falls, said lawmakers should investigate Westra’s conduct.
“This is a serious issue and a potential conflict of interest that deserves the full weight of the Legislature looking into it,” Muckey said [Haiar, 2025.12.19].
Reed, Muckey, or anyone else deeply dismayed by this conflict of interest could file a complaint with the Government Accountability Board, but that entity has proven itself useless in combatting even the most blatant corruption. That feckless GAB exists because the Legislature used its full weight to quash the voter-approved IM 22 and the toothier state ethics commission that it would have empaneled. Reed and Muckey will have to work very hard to rally their colleagues to take a serious look at the corruption that Westra shows is so deeply embedded in South Dakota’s political culture.