South Dakota
Legislators vote to subpoena officials over alleged vehicle titling crimes in their department • South Dakota Searchlight
![Legislators vote to subpoena officials over alleged vehicle titling crimes in their department • South Dakota Searchlight Legislators vote to subpoena officials over alleged vehicle titling crimes in their department • South Dakota Searchlight](https://southdakotasearchlight.com/wp-content/uploads/2024/03/IMG_3141-2048x1536.jpg)
The refusal of a state department director to explain what’s changed after a recent vehicle titling scandal sparked a rare subpoena request from a legislative committee on Monday.
Department of Revenue Secretary Michael Houdyshell appeared before the Legislature’s Government Operations and Audit Committee in Pierre to discuss a new software system and other internal control measures he said will prevent further vehicle titling troubles. Two former Revenue Department employees are criminally charged in a fake vehicle-titling scheme, following an investigation into similar allegations against a deceased former employee.
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But Houdyshell refused, even during an hourlong, closed-door executive session, to offer details on the new internal controls. Houdyshell cited the criminal prosecutions and the possibility of future lawsuits, and said rules direct practicing attorneys to avoid making public statements about a case.
When the committee reconvened publicly, Sen. David Wheeler, R-Huron, told his fellow committee members that he disagrees with Houdyshell’s interpretation of that rule.
Wheeler and Houdyshell are both attorneys. Wheeler argued that rules barring public statements about a case can’t logically apply to statements offered behind closed doors.
He also said there is no active case involving the deceased former employee, who can’t be prosecuted but whose actions could land the state in a lawsuit.
The senator said it’s a pattern from the executive branch, and one that prevents lawmakers with oversight authority from doing their jobs.
“We need some sort of resolution to this, because this is the answer we always get. It’s occurred in the past when we’ve had controversial matters before this committee,” Wheeler said. “Officials say ‘there’s pending litigation, there’s a threat of litigation,’ therefore there’s no response.”
The committee voted 7-2 to support subpoenas for Houdyshell and Rosa Yaeger, director of the Revenue Department’s Motor Vehicle Division. A subpoena is a legal order requiring someone to offer testimony or produce evidence.
The subpoenas would need approval from the Legislature’s Executive Board.
Lawmakers tried and failed in 2023 to pass a bill that would have granted subpoena powers to the audit committee without that additional step.
The Executive Board is unlikely to be a hurdle in this situation, said its chairman, Watertown Republican Sen. Lee Schoenbeck. He told South Dakota Searchlight he intends to call a meeting for Oct. 29 to discuss the subpoenas.
“I’m going to honor the will of the audit committee,” Schoenbeck said, adding that he’d expect the board’s membership to agree to the subpoenas.
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Revenue Department concerns
The Revenue Department’s Motor Vehicle Division has been the focus of legislators since this summer, in light of the behavior of now-deceased former employee Sandra O’Day. O’Day worked for the division for decades. After her death, her family found suspicious financial records that ultimately led the state Division of Criminal Investigation to discover that O’Day had created 13 fake vehicle titles. She’d used them to secure loans, and Attorney General Marty Jackley said earlier this month that the banks victimized by her failure to repay those loans could file lawsuits against the state seeking damages.
Jackley’s latest statements came during a press conference Oct. 9, at which he announced criminal complaints against two other former Revenue Department employees. Lynne Hunsley is facing seven counts for allegedly falsifying a vehicle title, in part to avoid excise taxes, and Danielle Degenstein faces a misdemeanor charge for allegedly notarizing the phony title and for her failure to come clean to law enforcement when confronted.
“I do want to start with a little caveat,” Houdyshell said in the opening seconds of his committee appearance Monday. “Due to pending criminal proceedings and the threat of potential civil litigation, and at the advice of the attorney general, we’re going to be limited as to what questions we can answer today.”
A new system for vehicle and driver licensing in South Dakota should help prevent the kind of criminal behavior uncovered over the summer, he said. The department has also implemented a mandatory ethics training for employees, and has signaled its plans to hire an internal control officer.
That last move mirrors one from the state Department of Social Services. That agency also came under scrutiny recently for the alleged behavior of one of its former employees.
Lonna Carroll allegedly embezzled $1.8 million from the state by creating and approving fraudulent financial support orders for children from 2010 through 2023. Carroll’s jury trial is set to begin in December.
After about 10 minutes of public testimony Monday, Houdyshell and the committee members retired to a closed, executive session.
Closed doors, closed mouths
Sen. Wheeler launched into an explanation of his reasons for wanting subpoenas shortly after the committee reconvened for its public meeting.
The audit committee is supposed to get answers to questions on agency operations, Wheeler said, and it can hold sessions outside the public eye if necessary.
It’s not reasonable to expect lawmakers on the committee to sit on their hands for months or longer, he said, before attending to the business of oversight because of potential legal proceedings.
“We have to find a way for us to be able to do our job at the same time the judicial branch does its job,” Wheeler said. “I think that’s what this route allows us to do.”
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Sen. Tim Reed, R-Brookings, wondered what might stop departmental representatives from stonewalling in the face of a subpoena and citing the same rules for public statements from lawyers.
A subpoena could be challenged or modified in court, Wheeler said. If the Legislature’s subpoenas survive a challenge and departmental employees still don’t answer questions, he said, “it’s actually a matter of contempt, which is in itself a class two misdemeanor.”
The two committee members who opposed the subpoenas each expressed doubts prior to the vote. Rep. Drew Peterson, R-Salem, asked Houdyshell if the department intends to wait until every legal matter is finished before explaining new internal controls.
“We cannot delve into the details in this forum until any of the potential litigation has been resolved,” Houdyshell said.
Sen. Dean Wink, R-Howes, suggested the potential to influence the courts is something that justifies waiting for answers.
“I don’t think the Legislature has the authority to supersede the legal process in this situation,” Wink said.
Sen. Jean Hunhoff, R-Yankton, said if all the audit committee can do is nod yes when a department head says “trust us, we’ve got it under control,” committee members may as well stay home.
“It’s not that I don’t trust people, but I don’t trust people anymore,” Hunhoff said. “There’s too many things that have happened in the last couple of months.”
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Federal government approves 20-year mining ban in part of SD’s Black Hills • North Dakota Monitor
![Federal government approves 20-year mining ban in part of SD’s Black Hills • North Dakota Monitor Federal government approves 20-year mining ban in part of SD’s Black Hills • North Dakota Monitor](https://northdakotamonitor.com/wp-content/uploads/2024/12/Black-Hills-Pactola.jpg)
The federal government approved a 20-year ban Thursday on new mining-related activity in a portion of South Dakota’s Black Hills.
The ban covers 32 square miles of federally owned land located about 20 miles west of Rapid City. The boundaries encompass the Pactola Reservoir and areas upstream that drain into the reservoir via Rapid Creek.
Lilias Jarding, executive director of the Black Hills Clean Water Alliance, hailed the action as “an expression of the will of the people.”
“It definitely shows that when people get active in their communities that we can influence what happens,” Jarding said.
Advocates for the ban rallied against a proposal from Minneapolis-based F3 Gold to conduct exploratory drilling. The project’s location is in the Jenney Gulch area of the Black Hills National Forest, within a mile of Pactola Reservoir. The man-made mountain lake is the largest and deepest reservoir in the Black Hills. It’s also a popular recreation destination and a drinking-water source for Rapid City and Ellsworth Air Force Base.
The boundaries of a ban on new mining-related activity encompassing the Pactola Reservoir and part of the Rapid Creek watershed. (Courtesy of U.S. Forest Service)
F3 won draft approval of its drilling plan from local Forest Service officials in 2022. Then, last year, the national offices of the Forest Service and the Bureau of Land Management announced they were considering a ban on new mining-related activity in the Pactola area.
Federal officials conducted a meeting about the proposed ban last year in Rapid City, where public sentiment was overwhelmingly against the drilling project and in favor of the ban. The Black Hills Clean Water Alliance said more than 1,900 people filed written comments on the ban, with 98% in support of it.
The ban is formally known as a “mineral withdrawal,” because it withdraws the area from eligibility for new mineral exploration and development. A 20-year ban is the maximum allowed by federal law, although the ban could be renewed after that. Only Congress can enact a permanent ban.
Decision comes from Interior Department
Interior Secretary Deb Haaland was the decision-maker on the mineral withdrawal, because the department’s Bureau of Land Management administers mining claims on federal land.
“I’m proud to take action today to withdraw this area for the next 20 years, to help protect clean drinking water and ensure this special place is protected for future generations,” Haaland said in a statement.
She also mentioned the area’s clean air, its recreational and ecological benefits, and the Black Hills’ sacred status in the traditional spiritual beliefs of many Great Plains Native American tribes. Haaland is a member of the Pueblo and Laguna tribes in New Mexico.
Tom Vilsack, secretary of the U.S. Department of Agriculture, which includes the Forest Service, issued a statement praising Haaland’s decision.
“The Pactola Reservoir–Rapid Creek Watershed provides so many benefits to the people and communities we serve, from clean water to world-class recreation, from livestock grazing to the spaces our Tribal communities consider sacred,” Vilsack said.
F3 Gold did not immediately return a message from South Dakota Searchlight. Jarding said F3’s Pactola project is negated by the 20-year ban on new activities.
“The only exception to that is if someone has already proved there is a mineral reserve, and without drilling, there’s no proving there’s a mineral resource,” Jarding said.
The company has another exploratory drilling project near Custer, outside of the Pactola ban area. The Custer project has final approval from the Forest Service.
Interest in Black Hills gold dates to its 1874 discovery by Lt. Col. George Armstrong Custer’s Black Hills Expedition. The discovery set off a gold rush that ultimately led to the development of the Homestake Mine near Lead, which was the largest and deepest gold mine in North America prior to its closure in 2001. Today, the only active, large-scale gold mine in the region is the Wharf Mine, also near Lead. There’s a large abandoned gold mine in the Lead area, the Gilt Edge Mine, that is undergoing a massive cleanup and water-treatment project supported by the Environmental Protection Agency’s Superfund.
Mining industry responds
Larry Mann, a retired South Dakota lobbyist who formerly represented F3, said the company’s project was treated unfairly. He said exploratory drilling would not damage the Pactola watershed, and that if drilling results justified developing a mine, the proposal would go through a rigorous permitting process that would probably take 10 to 15 years.
“F3 was willing to go through a lot of different things to accommodate concerns,” Mann said.
Mann wonders if the incoming administration of President-elect Donald Trump could seek to alter Haaland’s decision. Whether or not the new administration could do that, Mann expects Trump’s pick for secretary of the Interior Department — Republican former North Dakota Gov. Doug Burgum — to be more supportive of mining on federal land.
“I think that there’s a possibility now with a change of leadership that the pendulum could start swinging the other way,” Mann said.
An official working for Burgum’s transition team did not immediately return a message from Searchlight. A spokesperson for the Bureau of Land Management responded by email to Searchlight, saying only that “we’re not going to speculate about decisions of a next Administration.”
F3 Gold is not a member of the South Dakota Mineral Industries Association, but the association issued a statement Thursday in response to Searchlight questions about the Pactola ban. The statement describes the ban as “federal overreach.” The association also alleged that the decision conflicts with federal mineral laws and policies and fails to recognize the significance of critical minerals — such as antimony, used in batteries — that the association said are present in the area covered by the ban.
“The secretary’s rushed decision on the withdrawal of over 20,000 acres proves this administration is desperate to complete executive actions before the new administration takes over on January 20th,” the association’s statement said, in part.
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