The latest round of arguments between legislators over whether they have authority to summon, or subpoena, witnesses flowed through the past two days in the Legislature’s Government Operations and Audit Committee.
The Legislature clearly has legal authority to summon witnesses who work for state government’s departments, according to Doug Decker, the chief lawyer for the Legislative Research Council, the non-partisan staff.
Sen. Stace Nelson, R-Fulton, wanted to push to the next circle of non-state agencies and private contractors who work with state government’s departments and bureaus. Nelson repeatedly but politely clashed with GOAC’s presiding chairwoman, Rep. Jean Hunhoff, R-Yankton.
The panel agreed they want to bring back state government’s education secretary, Melody Schopp, to get further answers about the Gear Up scandal. Sen. Neal Tapio, R-Watertown, suggested asking questions of a broader group than just Schopp. Tapio spoke about the potential value of sending written questions in advance.
Sen. Justin Cronin, R-Gettysburg recalled the committee during its probe of the EB-5 economic-development program sent some 90 questions to Joop Bollen of Aberdeen, who later pleaded guilty to one felony count and wasn’t sent to prison. Bollen, who was an employee at Northern State University before setting up SDRC for EB-5 purposes, had refused to appear before the committee. But he answered many of the written questions. “Let’s see what we can get beforehand,” Cronin said.
Nelson also ultimately succeeded in his argument to bring in Rep. Kyle Schoenfish, R-Scotland. His father’s firm was the private auditor for Mid Central Educational Cooperative for nearly a decade. Mid Central held the state contract to deliver Gear Up services until Schopp terminated the contract in a phone call on Sept. 16, 2015.
“I also find it’s gentler to ask first than to mandate,” Hunhoff told Nelson as the drama built Tuesday morning. Decker had opened the meeting Monday with a presentation about the Legislature’s investigative power. He returned to the witness chair Tuesday morning during the discussion about which witnesses to invite or subpoena.
“The invitation is the way to go first,” Decker said. The next step could be summoning, or issuing a subpoena, which Decker said amounted to the same thing. “Issuing subpoenas gets a little more complicated,” Decker advised. He said there are expenses for sending a subpoena and the committee could face additional costs if the potential witness goes to court to quash the subpoena.
Nelson had referred to a specific state law. Decker responded, “The key phrase there is ‘without lawful excuse’.” Rep. Craig Tieszen, R-Rapid City, said he supports invitations first. Rep. David Anderson, R-Hudson, called for the committee to invite witnesses Schopp, Schoenfish and Brinda Kuhn, who was involved in the preparation of the original Gear Up grant application a decade ago and later was paid to evaluate the program.
Rep. Susan Wismer, D-Britton, cautioned the committee members they would be “just begging for lawyers to get involved” if the committee pursue whoever signed the private audits for the Schoenfish firm. Cronin replied, “If they feel comfortable coming forward, they’ll come,” Cronin said.
Nelson also wanted the state official identified in a 2015 email exchange with Mid Central’s then-director Dan Guericke regarding the value of Microsoft software. Legislative auditors didn’t find any documentation the 500 software licenses had been activated in 2014 or 2015, yet Mid Central claimed two rounds of $2 million value toward its local match for the federal Gear Up grant.
The committee voted 8-0 to invite Schopp, Kuhn and Schoenfish. Hunhoff said she was uncomfortable about sending a letter from the committee the state employee in the email chain. “I think this is out of our purview,” Hunhoff said. Cronin added, “We can’t fix everything in one month.” Cronin suggested the committee move on from the discussion.
Meanwhile Nelson had forwarded his copy of the email chain to the other committee members. After the first-round vote, he went to the next step with two words — “Tamara Darnall” — naming the state Department of Education finance officer who was on one end of the digital conversation with Guericke.
Tapio put some backbone behind Nelson’s request. “I think she would be very knowledgable on this issue,” Tapio said. Nelson called for Darnall to be invited, and Tapio provided the second to Nelson’s motion. That vote turned out 8-0 too,
“Miss Darnall will be invited to the meeting,” Hunhoff said.
Two of the 10 committee members weren’t present Tuesday. The actual chairwoman, Sen. Deb Peters, R-Hartford, was testifying in Washington, D.C., as the incoming president for the National Conference of State Legislatures, while Senate Democratic leader Billie Sutton of Burke was taking care of a sick child.
Schopp in her testimony Monday stunned some of the committee when she said none of the Gear Up money was part of the missing money — nearly $1.4 million, according to legislative auditors — that couldn’t be accounted in an inspection of Mid Central’s bank records. None of the questions Schopp received from the committee members Monday seemed to have the same degree of sharpness. But overnight the legislators seemed to recover.
There also was a sense Monday that the Daugaard administration was constructing a false wall with its lawsuit last month against Mid Central and its 14 school districts. Schopp testified Monday the lawsuit was an insurance policy of sorts, in case the US Department of Education delivered an adverse ruling and wanted more matching money from the state Department of Education.
Testimony Tuesday from Auditor General Marty Guindon referred to a letter in Schopp’s briefing packet. The letter from 2016 to Gov. Dennis Daugaard said the federal department had accepted the software value for 2014. Guindon said the federal department hadn’t ruled yet on the 2015 finding by legislative auditors. The email chain between Darnall and Guericke occurred in 2015, before Mid Central officials returned for more testimony to the Legislature’s committee.
That testimony was canceled after Schopp terminated the Mid Central contract for Gear Up on Sept. 16, 2015. Guericke called Mid Central business manager Scott Westerhuis later that day. After he arrived back in Platte, Scott Westerhuis allegedly shot to death his wife, Nicole, and their four children, and then allegedly set their house on fire and allegedly shot himself to death.
Schopp, in answer to a Tapio question Monday, said the combination of legislative auditors’ initial findings about Gear Up in the fiscal 2014 audit and the Westerhuis killings contributed to the perception that Gear Up was rife with corruption.
Two of the people identified in those early findings by legislative auditors were Rick Melmer, the former secretary of education under then-Gov. Mike Rounds, and Keith Moore, who was hired by Rounds to revive the state Office of Indian Education. They were identified by position as senior advisers, but weren’t directly named, in the Department of Legislative Audit’s report for 2014.
Guericke, Gear Up coordinator Stacy Phelps and assistant business manager Stephanie Hubers have been charged with state felony crimes in connection with trying to cover up Gear Up. State Attorney General Marty Jackley told the legislators Monday that the only person he’s ruled out for possible prosecution is the former chairman of Mid Central’s board who signed board documents presented to him in September 2015 after he no longer was chairman.