There’s still some fallout over an audit of the state Commerce Department.
The state Auditor’s office alleged irregularities in how some state money was handled, as well as a public servant’s interest in public contracts. The auditor said these could be crimes. The matter was referred to Burleigh County States’ Attorney Julie Lawyer, and to the South Dakota Division of Criminal Investigation – and after review, no charges were filed.
The audit criticized Commerce for money spent on the new "Be Legendary" logo, that the audit said skirted bid requirements. Also, the audit alleged Commerce charged $850,000 to the wrong budget cycle.
State Commerce Commissioner Michelle Kommer said she and some of her staff had to hire private attorneys at their own expense, because the Attorney General’s office would not represent them. During an appearance before the Legislature’s interim Commerce Committee, Kommer said she wasn’t clear why the Attorney General’s office didn’t represent Commerce employees in this case.
"There's a statute that says that employees acting outside of the scope of their employment may not be represented by the Attorney General's office," Kommer told the Committee. "I think we can all understand that."
But Kommer said at no point in the audit report or in the investigation was it suggested that any Commerce employee acted outside the scope of their employment.
"One could question whether or not this was the correct conclusion, that we could not be represenedt by the Attorney General's office," Kommer said. "And I think one should question that."
State Auditor Josh Gallion was also criticized by some members of the Legislative Audit and Fiscal Review Committee, for releasing the audit results before the Committee got to review it. And Rep. Mike Nathe (R-Bismarck) told the Commerce Committee the 2021 Legislature will be taking a look at those issues.
Nathe said that audit had what he called a “serious chilling effect” on state employees.
"I have a lot of state employees in my district," Nathe saiod. "I got a lot of e-mails, saying they were afraid to do things or say things, because they were afraid they may be charged down the road, and have to 'lawyer up' like Michelle and her staff did."
Nathe said that's something the Legislature will take a hard look at. He said the LAFRC Committee is also taking a look at it as well.
"Nobody disputed the findings," Nathe said. "The big rub is the process and the accusations -- who has the authority."
At the time, Gallion said he had an obligation to tell the Attorney General about a potential legal problem in the Commerce Department.
