South Dakota governor asks state Supreme Court about conflict of interest after lawmaker resigns

NOVEMBER 4, 2023:

PIERRE, S.D. (AP) — South Dakota Republican Gov. Kristi Noem has requested guidance from the state’s Supreme Court about conflict-of-interest rules for lawmakers, several weeks after a South Dakota state lawmaker resigned and agreed to repay $500,000 in federal COVID-19 relief that she received for her day care business.

Jessica Castleberry was a state senator when she received the COVID-19 stimulus funding. Doing so violated a state Supreme Court advisory warning state lawmakers that it is unconstitutional for them to accept federal pandemic funding.

Noem, Attorney General Marty Jackley and two Republican lawmakers have sent letters to the court seeking clarity on what else is illegal, the Sioux Falls Argus Leader reported Thursday (Nov. 2, 2023).

According to the state Constitution, lawmakers are banned from entering into state contracts “directly or indirectly” during their term and for a year after they finish serving in office.

In her letter, Noem raised specific questions about indirect contracts: Can lawmakers or their spouses be employed by school districts or counties? Can their businesses subcontract with the state for goods and services? And can they receive foster care reimbursements?

Majority Leader Sen. Lee Schoenbeck, a Republican of Watertown, said in his letter that “a literal reading of the ‘indirectly’ language … would exclude a very large portion of South Dakota’s population,” according to the Argus Leader.

The letters also said lawmakers continuously vote on spending packages that fund schools and counties where the lawmakers or their spouses work.

Noem wrote that she is seeking guidance as soon as possible because she still needs to appoint someone to Castleberry’s open seat before the Legislature convenes in January.

Schoenbeck added that, depending on the court’s ruling, a number of lawmakers may need to resign or pay the state back for services received.

AUGUST 17, 2023:

A state lawmaker in South Dakota has agreed to repay a large chunk of the federal COVID money she received to run her preschool in Rapid City.

Attorney General Marty Jackley says Sen. Jessica Castleberry received over $600,000 that she used for her business.

Jackley says they will not ask the families to reimburse them for the other portion of the COVID funds Castleberry received.

Because she’s a state legislator, Castleberry wasn’t eligible to receive the COVID funds. But, Jackley says, she did spend the dollars appropriately.

Jackley says Castleberry has agreed to a payment plan.

In 2020, the South Dakota Supreme Court issued an advisory warning state lawmakers that it was unconstitutional for them to accept federal pandemic funding.

Castleberry was appointed to a vacant state Senate seat in 2019 and continues to serve.

JULY 28, 2023:

UNDATED (AP)- South Dakota’s attorney general called on a state lawmaker Thursday (July 27, 2023) to repay more than $600,000 in federal COVID-19 relief funding she received for her preschool business.

Attorney General Marty Jackley gave fellow Republican state Sen. Jessica Castleberry, of Rapid City, 10 days to return the money she accepted for Little Nest Preschool, which she owns.

In a letter dated Wednesday, Jackley cited a 2020 South Dakota Supreme Court advisory warning state lawmakers that it is unconstitutional for them to accept federal pandemic funding.

“The Supreme Court has expressly forbidden such payments to legislators,” Jackley wrote to Castleberry.

Gov. Kristi Noem has said Castleberry violated the state constitution by accepting the pandemic aid.

“The Supreme Court, could not have spoken more clearly, or on point to this issue. The Senator has a personal and ethical obligation to avoid conflict of interests,” Noem had written in an earlier letter to the attorney general.

Castleberry said she believed her company was eligible for funding after speaking with a lawyer. She said she “communicated directly and transparently” with Social Services staff regarding her grant applications.

“I am committed to resolving the issue with the State and will work with them to ensure I acted in compliance with the State Constitution,” Castleberry said in a statement.

Noem had asked the attorney general to investigate Castleberry after a state Social Services Department staffer recognized Castleberry’s name on a recent $4,000 grant request, which was denied. A review by the agency turned up more than a dozen other payments to Castleberry’s preschool.

Castleberry was appointed to a vacant state Senate seat in 2019 and continues to serve.

JULY 27, 2023:

South Dakota Governor Kristi Noem and Attorney General Marty Jackley are looking into the possible inappropriate use of COVID relief dollars by state Senator Jessica Castleberry of Rapid City.

Noem sent a letter to Jackley Tuesday (July 25, 2023) asking that his office investigate possible Constitutional and statutory violations committed by Castleberry because she and her business accepted more than $603,000 in COVID relief dollars, while Castleberry served in the Legislature. The State Supreme Court ruled in 2020 that such payments to elected officials were illegal.

Jackley responded to Noem via letter yesterday (July 26) and also sent a letter to Castleberry requesting she repay the full amount. He told Castleberry in the letter that the state will pursue court action if the full amount is not repaid.

Castleberry has 10 days to respond.

You can find Governor Noem’s letter to Attorney General Jackley here.

You can find Attorney General Jackley’s letter to Governor Noem here.

You can find Attorney General Jackley’s letter to Senator Castleberry here.

South Dakota governor asks state Supreme Court about conflict of interest after lawmaker resigns

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