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PIERRE – Doug Decker, the Legislature’s chief lawyer, told lawmakers Monday they might better serve South Dakota’s taxpayers by changing state laws that allowed the Gear Up scandal to occur, rather than pursue a parallel investigation.
Decker said state law provides authority for the Government Operations and Audit Committee to subpoena state government employees.
But whether the committee’s subpoenas apply to non-profits or other government bodies that aren’t state departments is “a gray area,” he said.
His advice was the committee instead should issue “invitations” to those potential witnesses asking them to testify.
Decker said that would “avoid unintended consequences,” such as people refusing to answer questions because court cases are under way.
Gear Up is a federally funded program. Its purpose is to help students from lower-income households be aware of education opportunities after high school graduation.
Agencies are reimbursed for legitimate expenses of delivering Gear Up services.
Sen. Deb Peters, R-Hartford, said her understanding is the committee can follow the money but pulling in a board member from a non-state organization is beyond its scope.
“So we need to change the statute if that is a road we want to go down,” Peters said. She is the committee’s chairwoman.
State Education Secretary Melody Schopp decided in September 2015 she wouldn’t renew the contract for Mid Central Educational Cooperative at Platte to run Gear Up. She called the Mid Central business office Sept. 16 and talked with the cooperative’s director.
The director, Dan Guericke, spoke later that day to Scott Westerhuis, who was traveling for business. Westerhuis was Mid Central business manager.
Sometime early the morning of Sept. 17, Scott Westerhuis allegedly shot to death his wife, Nicole, and their four children. She was an assistant business manager for Mid Central.
Then he allegedly lit their house afire and shot himself to death.
State Division of Criminal Investigation agents determined that Scott Westerhuis committed the killings.
Attorney General Marty Jackley told the committee Monday that he is prosecuting criminal indictments issued by a grand jury against three people connected to Gear Up:
Stacy Phelps, who managed the program when Mid Central ran it;
Guericke, Mid Central’s former director; and
Stephanie Hubers, a former assistant business manager at Mid Central.
Jackley said Monday the state’s circuit judge handling the criminal cases has issued numerous orders and is considering other matters.
Sen. Stace Nelson, R-Fulton, asked why two people tagged by a 2015 legislative audit that set off alarms about Gear Up haven’t been criminally charged.
They are Rick Melmer, a former secretary of education, and Keith Moore, who was Indian education director under Melmer.
Legislative auditors discovered Melmer and Moore didn’t file work-effort reports for four months in 2014 in their roles as Gear Up senior advisers.
Jackley said Melmer and Moore are named in two criminal charges against Guericke.
“Additional criminal charges may be pursued,” Jackley told Nelson.
The only person so far Jackley has decided won’t be prosecuted is a former Mid Central board chairman who “stepped off a tractor” to sign backdated documents in September 2015 as part of the alleged cover-up attempt by Guericke and Phelps.
Guericke and Phelps allegedly committed those crimes in the days before Schopp made her phone call to Guericke.
Jackley said he wants the criminal trials held in front of juries in Charles Mix County.
Black Hills State University at Spearfish now holds the Gear Up delivery contract.
Last month Gov. Dennis Daugaard filed a civil lawsuit in Hughes County against Mid Central and its 14 member school districts.
State government’s Department of Education served as the pass-through agency between the federal government and Mid Central.
Paul Bachand is handling the civil lawsuit for the governor. Bachand – pronounced buh-shahn — is a private lawyer in Pierre who previously worked for the attorney general’s office.
Jackley said he has been allowed as attorney general to see information for criminal prosecution purposes that a private lawyer can’t in a civil lawsuit.
Jackley said it wouldn’t be fair if he represented state government in the civil lawsuit against Mid Central and its board.
Legislative auditors received permission to conduct a special review of Mid Central’s federal grant programs.
They found Mid Central’s business office used electronic banking transactions to route money back and forth with three non-profits for Gear Up.
Legislative auditors determined nearly $1.4 million was missing from Mid Central’s account as of Sept. 30, 2015.
The committee is considering legislation that would make changes to state laws regarding audits.
One section would require individual members of a school board to receive copies of the audit each year.
Other sections would:
Require state website publication of monitoring reports on sub-recipient grants;
Require state departments to record disclosed conflicts of interest; and
Ban people involved in grant applications from participating in the process for rating, awarding or evaluating that grant or connected grants.
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