A KELOLAND News investigation has revealed a close-knit group of educators and administrators who have profitable consulting businesses on the side.
One of them is former South Dakota Secretary of Education Rick Melmer. Melmer is a partner in Dakota Educational Consulting with another former State Secretary of Education, Tom Oster.
Oster is also the Superintendent of the Sioux Valley School District, located in Volga. Now, Sioux Valley's school board has hired Dakota Educational Consulting to find Oster's replacement as he prepares to retire.
But some people in Volga have a problem with Oster's own consulting firm getting the job.
The Sioux Valley School District is paying Oster's firm $6,000 to find his replacement, and a retired teacher and her husband say that's clearly a conflict of interest.
"It's an obvious conflict of interest, when they hire a consulting firm made up of Dr. Melmer and the current superintendent to find his own replacement and pay him to do that," Lyle Anderson said.
Lyle and Pat Anderson felt so strongly about it, they wrote a letter to the editor in the Volga Tribune voicing their concerns.
"But I also wonder if the board had any other options. Did they look at any other options or did they just take the first, easy opportunity that was there?" Pat Anderson said.
"We looked at other firms, but it was clear with Mr. Melmer's experience as Secretary of Education under Governor Round’s cabinet, there was no one who had his connectivity, network and reach in the state in terms of knowing about highly qualified candidates to serve our students," Doug Wermedal, Chairman of Sioux Valley School Board, said.
Doug Wermedal is president of the Sioux Valley School board. He wrote the town paper a letter in response to the Andersons', defending the board's decision and denying any conflict of interest.
"There are no surprises here. There is no conflict of interest. It's our desire to take the best firm in the state and repeat the work that was done six years ago," Wermedal said.
That's right; six years ago Melmer identified Oster, who succeeded him as the state secretary of education, as the best candidate for super of Sioux Valley. Oster later joined Melmer's consulting firm and also serves on Leadership South Dakota with him.
I asked Tom Oster for an interview and he declined, but not before telling me that the Sioux Valley Board of Education didn't hire him, and he wouldn't be finding his own replacement. However, KELOLAND News has obtained a letter that Oster sent to his staff that outlines his position a little further.
In it, Oster takes issues with the Anderson's accusations and gives his staff the definition of slander -- writing that it is an "action or crime of making a false spoken statement damaging to a person reputation." While he says he has "absolutely no interest in being involved in the selection of your new superintendent," he will be helping identify a pool of candidates for the job.
"So if he had a friend who perhaps needed a job or was looking to change, he could easily manipulate the search to someone's favor, in my opinion," Pat Anderson said.
"He's obviously going to get paid part of this fee. He's obviously going to have input into this, even though he says the board is going to make the final decision. Mr. Oster is obviously involved. If he's any kind of consultant, he's obviously deeply involved in the search process," Lyle Anderson aid.
Angela Kennecke: "Will he profit from this, because he is a partner?"
Wermedal: "Our check and our business are with Dr. Melmer. What Dr. Melmer does with the revenue accruing from the search will be his choice,"
Kennecke: "So you don't really know if Oster will get any of that money or not?"
Wermedal: "That again is Dr. Melmer's choice."
The Andersons say they also hope a superintendent is hired who will commit all his time to his job with the district.
Wermedal tells KELOLAND News that Oster has an allowance for his consulting job in his contract. We have asked the Sioux Valley Schools for a copy of that contract and have yet to receive it.