PIERRE, S.D. — Legislation introduced by the Attorney General’s Office intended to prevent future scandals involving government employees sailed through the Senate State Affairs Committee.
One of the key pieces of Jackley’s legislative package entering the 100th legislative session, Senate Bill 60 would empower the State Auditor’s Office to look into the financials of other state agencies, just like the two other financial oversight entities in Pierre — the Bureau of Finance and Management (BFM) and Legislative Audit — can do.
“There are three opportunities for protection of taxpayer dollars,” Jackley said of the state’s accounting system. “Within the executive branch we have the Bureau of Finance and Management, on the legislative side we have the Auditor General, and then the people’s Auditor. The State Auditor that is elected on the ballot.”
Last year, at least five different state employees were accused, and in many cases charged with, financial crimes involving the theft of taxpayer money. As the state’s top law enforcement officer, the responsibility of investigating the crimes fell to Jackley.
But as the Attorney General said when he held several different press conferences in Sioux Falls announcing new charges against accused fraudsters, he was tasked by law with crimes after they occurred, not preventing them.
Jackley believes the State Auditor, or “people’s Auditor” as he calls it, should be empowered to help prevent such fraud.
“As I began these investigations, I was surprised to learn that the State Auditor does not have access to the state’s books and records of accounting,” Jackley continued. “This simply says that the State Auditor is entitled to access all of this as necessary for purposes of conducting an audit or investigating improper conduct.”
Though Jackley’s proposal was endorsed by fellow statewide elected official Treasurer Josh Haeder and current Auditor Rich Sattgast, BFM head Jim Terwilliger opposed the bill on the grounds that it would upset the apple cart of accountability.
He argued, in part, that the Auditor’s place in state government was well-established, and that expanding the powers without growing the staff was unworkable. The longtime bureaucrat also suggested that the office already had access to the state accounting system.
“This bill greatly expands the State Auditor’s role in terms of conducting audits,” Terwilliger said. “(And) There aren’t minimum education requirements to work in the Auditor’s office. In order to build the capacity to do detailed, fraud detecting audits, that capacity doesn’t exist today.”
Further opposition came from some of the state’s most entrenched business interests groups, who raised concerns about the influence of a more powerful State Auditor’s office.
“Our problem with the bill is it goes to the business records that go to state government,” said South Dakota Retailers Association Bill Van Camp, raising a concern that proprietary or personal information could be revealed by the bill.
South Dakota Bankers Association President Karl Adam said that office, which is intended to be a non-partisan one, could become political.
“It may lead to unnecessary government overreach and additional conflicts of interest,” Adam testified.
The arguments didn’t appear to move Jackley or the committee, who passed SB 60 on a unanimous vote. The longtime West River law man, whose tenure in the Attorney General’s office stretches across three separate decades, rattled off several instances of government corruption he’s lived through as he rebutted opposition testimony.
“EB 5, GEAR Up, six criminal cases two convictions and two open investigations, what is it going to take?” Jackley posed to the committee. “This is preventative in nature, it’s not asking for more prosecution powers… You have an elected state auditor… state government doesn’t give the auditor access to the information. Why wouldn’t you let the state auditor see the state financial books unless you are trying to hide something?”
Sattgast echoed Jackley’s concerns.
“A number of times we will get requests from the general public on certain issues for information, and we don’t have access,” said Sattgast. “As far as the cooperation goes, we get a response back like ‘why do you need this information?’… Think about that as the elected auditor.”
