Second panel of legislators wades into GEAR UP fight

VERMILLION -- Members of the Legislature's State Tribal Relations Committee decided Monday they want their own piece of the investigation into Mid-Central Educational Cooperative's mismanagement of the federally funded GEAR UP program.


VERMILLION - Members of the Legislature’s State Tribal Relations Committee decided Monday they want their own piece of the investigation into Mid-Central Educational Cooperative’s mismanagement of the federally funded GEAR UP program.

The panel supported the request from Sen. Lance Russell for legislation to be drafted on open records, record retention, conflict of interest and enforcement, including criminal and civil penalties.

Russell, R-Hot Springs, called for the Legislative Research Council staff to develop the legislation “from another state that it’s worked in.”

The lawmakers also supported Russell’s request that the Legislature’s Executive Board be asked to allow the committee to meet a fourth time.

The meeting Monday at the University of South Dakota in Vermillion was the committee’s second. The panel plans to hold its third meeting at Rapid City during the Lakota Nation invitational sports tournaments later this year.


GEAR UP is a federal program intended to help students from lower-income households be aware of education opportunities after high school graduation.

Legislative auditors couldn’t account for nearly $1.4 million of money missing from Mid-Central Educational Cooperative’s bank account at the end of fiscal 2015.

Mid-Central, based in Platte, managed South Dakota’s second GEAR UP grant at the time and went out of business June 30.

Some lawmakers on the State Tribal Relations Committee moved into the GEAR UP matter Monday because they wanted harsher action than what they have seen so far from the Legislature’s Government Operations and Audit Committee.

The state-tribal panel deadlocked 5-5 Monday on a request by Sen. Phil Jensen to compel six people connected to GEAR UP to testify. The vote was whether the committee should override the ruling by the panel’s chairman, Sen. Troy Heinert, D-Mission, that the motion was out of order.

Heinert said it fell outside the committee’s statutory authority. Sen. Stace Nelson, R-Fulton, challenged Heinert’s ruling. Nelson said Heinert had a conflict of interest because the name of his mother, Margo Heinert, appeared twice on GEAR UP paperwork.

Jensen, R-Rapid City, wanted to hear from former state secretaries of education Rick Melmer and Tom Oster and former state director of Indian education Keith Moore.

Jensen also wanted appearances from GEAR UP grant writer and evaluator Brinda Kuhn, current state Department of Education financial director Tamara Darnall, and Northern State University education dean Kelly Duncan.


Duncan had a contract through the University of South Dakota to evaluate GEAR UP. Kuhn previously turned down an invitation to meet with the legislators on GOAC. Darnall through her state lawyer declined to meet with GOAC at its two most recent meetings.

The state-tribal legislators spent the morning at a presentation by USD faculty member Marshall Damgaard, his students and a consultant about GEAR UP’s web of influences. Damgaard and the students built a wall-sized map showing the known conflicts.

Among those testifying Monday were Democratic former legislators Frank Kloucek, of Scotland, and Jack Billion, of Sioux Falls.

The committee also heard from USD student Christian Skunk, a Lower Brule Sioux Tribe member. Skunk spoke highly of GEAR UP’s summer program for the years he was enrolled and of former manager Stacy Phelps.

Phelps, former Mid-Central director Dan Guericke and Stephanie Hubers, who was an assistant business manager for Mid-Central, await state criminal trials.

Scott and Nicole Westerhuis, who were business manager and an assistant business manager, died in a series of shotgun killings and house fire at their home south of Platte.

Their deaths came hours after state Education Secretary Melody Schopp called Guericke in 2015 to cancel the management contract Mid-Central had for GEAR UP.

Gov. Dennis Daugaard announced Schopps’ retirement Friday, Oct. 13. It takes effect Dec. 15. A successor hasn’t been named. Schopp has declined GOAC’s two latest invitations to testify.


Schopp said at GOAC’s July meeting that none of the missing money came from GEAR UP. She said her department put additional checks into place.

Mid-Central directly managed several other federal grants.

Rep. Elizabeth May, R-Kyle, laid blame on Melmer and Schopp by name.

“If we do not stop this now, it won’t ever stop, and you don’t do it by letting somebody retire,” May declared.

Nelson, who also serves on GOAC, went after Daugaard. As Nelson spoke, a fire alarm went off. Vowed Nelson: “We can drag these cockroaches into the light of day.”

When the meeting resumed after the fire break, Nelson did too. “He’s responsible,” Nelson said about Daugaard. Nelson added: “Our job is to stop this corruption.”

Nelson said the machinations were - his words - organized crime. “You saw that board. You saw how ugly that mess is,” Nelson said.

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