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Jackley calls for more info on conflicts, deflects criticism, conspiracy theories

Jackley calls for more info on conflicts, deflects criticism, conspiracy theories

EB-5 Visa, EB5 Visa, EB-5 Investment

The state's top prosecutor called for legislation Thursday requiring state agencies to notify his office when criminal conflicts of interest emerge.

In an interview with Argus Leader Media, Attorney General Marty Jackley also deflected criticism and conspiracy theories surrounding his charging decisions in the state's EB-5 and Gear Up cases.

Jackley said he plans to work with legislators on a set of bills for next year that will bring harsher penalties for those who benefit from conflicts of interest. He said he hoped new conflict laws would require felony charges for those who benefit from conflicts of interest, could increase the likelihood of jail time on those charges and would require reporting those conflicts to the attorney general's office.

None of the four people facing criminal charges in connection with an embezzling scheme at a Platte educational cooperative or the state's investment-for-visa program will see conflict of interest charges, Jackley said, because existing policies "don't have any teeth."

And Jackley says his office should be notified sooner about existing conflicts. He said he didn't feel he had enough information about the audits and investigations into possible conflicts at Mid-Central Educational Cooperative when he received news September 17, 2015 that the group's business director Scott Westerhuis along with his wife and four children had died in a fire that destroyed their Platte home.

“The first I had heard of what was going on in Gear Up was on September 17 when I had the DCI director call me,” Jackley said. “That’s not a time that the attorney general should be hearing of that."

Joint state and federal investigations have since revealed that Scott Westerhuis shot and killed his wife Nicole and their four children in September, then set their home on fire before turning the gun on himself, investigators concluded last year.

The murder-suicide happened hours after the state's Department of Education notified the cooperative that it would be terminating its contract to manage the state's Gear Up program, a federally funded effort aimed at helping South Dakota Native American students prepare for college. The state investigation later revealed that Scott and Nicole Westerhuis embezzled more than $1 million of state and federal funds through the cooperative.

After investigating financial ties between the Westerhuises and Mid-Central, the state brought charges last month against three alleged co-conspirators. And more could be charged in connection with the embezzling scheme, Jackley said.

Tough hurdle to bring jail time

Jackley said he is frustrated that he isn't able to bring conflict of interest charges against the three involved in that scheme or against a former head of South Dakota's EB-5 Immigrant Investor Program.

And Mid-Central's Director Dan Guericke, former South Dakota Gear Up program coordinator Stacy Phelps and Joop Bollen, former head of the state's EB-5 program, face multiple felony charges in connection with the EB-5 and Gear Up programs, but Jackley lamented the fact that the individuals likely would not face any jail time. Lawmakers approved an overhaul of the state's incarceration criteria three years ago to reduce the number of non-violent offenders who end up behind bars, he said.

"It went from a 100-meter hurdle to a steeplechase and now I have to do X, Y and Z in addition to get one minute of jail time," Jackley said. “At some point if we’re going to be asked to deal with these and to bring the trust back to government, part of that means an accountability that might include jail."

Mid-Central's interim business director Stephanie Hubers, also faces faces six felony counts of grand theft, grand theft by deception and receiving stolen property in connection with the scheme.

Two legislators who worked to draft current conflict of interest legislation said they'd work with the attorney general on the bills, but weren't sure that they were necessary.

"If you can prove theft or fraud, you face a felony charge," Rep. Mark Mickelson, R-Sioux Falls, said. "I'm not opposed to considering it, but I feel like there are fact patterns where they'd face felony charges already."

Sen. Larry Tidemann, R-Brookings, said he'd also sit down with Jackley to consider the legislation, but he felt existing legislation equips the state to deal with conflicts.

"We've made some big steps toward rectifying things," Tidemann said. "But we can look at taking more steps to bring more answers."

Tony Venhuizen, Daugaard's chief of staff, said the governor believes conflict laws brought over the past two years help deter conflicts of interest and is already working with Jackley on legislation for 2017.

Managing conspiracy theories

Amid ongoing investigations into the EB-5 and Gear Up scandals, critics have expressed skepticism and disappointment with the pace and depth of the investigation.

Jackley said he has received many calls questioning his investigation and calling his results into question.

Among the critics is Lora Hubbel, a Republican candidate for state Senate. Hubbel recently started a campaign to launch an independent investigation into the murder-suicide in Platte. She said she doesn't believe the results of the South Dakota Division of Criminal Investigation (DCI) investigation into the Westerhuises deaths were accurate nor was the determination that Richard Benda, the former cabinet secretary under former Gov. Mike Rounds, killed himself in Charles Mix County by shooting himself in the abdomen with a shotgun.

"Any time the state gets to investigating itself it's a conflict of interest," Hubbel said. "We're not getting the right story here."

Jackley said he listens to complaints and reports from citizens who call about the cases, but he doesn't let them sway his charging decisions. He said most often the theories about what happened in the Westerhuis house are fueled by disbelief.

“Some of it’s politics, people trying to get a political advantage, but in some fairness when you bring it down to Platte, it’s the why question," Jackley said. "And there are many cases where I can’t answer why. I can speculate that Westerhuis did this because of finances, but I don’t know for sure. I wasn’t there.”

The attorney general responded to complaints that the EB-5 investigation took too long saying he wanted to conduct a thorough investigation with several local, state and federal agencies before bringing charges.

He also pointed to recent comments from attorneys for Bollen and Phelps saying that the two are scapegoats and said he wanted to know what or who they were scapegoats for. Jackley also said neither directly denied his involvement in the cases.

And while many loose ends in the case have been tied up, Jackley said there remains another unknown.

“I don’t know where that safe is at,” Jackley said. “I don’t know if it burned in the fire or if Scott Westerhuis took it out and threw it in the Missouri River.”


Source: http://www.argusleader.com/story/news/2016/04/07/jackley-calls-more-info-conflicts-deflects-criticism-conspiracy-theories/82742686/

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