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SD Lawmakers Begin Misconduct Inquiry

March 7, 2014, 4:52 PM by Ben Dunsmoor

SD Lawmakers Begin Misconduct Inquiry

South Dakota lawmakers are asking questions about the financial misconduct uncovered in the State Economic Development Office.

The Legislature's audit committee held its first meeting Friday to review the reports ordered after allegations that former Secretary Richard Benda inappropriately transferred money.

Pat Costello, the Commissioner of the Governor's Office of Economic Development, answered questions from legislators for more than four hours Friday about the alleged misconduct that happened under the previous administration. He was also asked what the current administration is doing to fix it.

"The reality is the events of the last year have extracted an enormous toll on my coworkers at the Governor's Office of Economic Development," Costello said.

The questions started about a year ago when Costello said the FBI asked officials for documents and information about Benda. Benda committed suicide last fall a month before the Attorney General discovered he inappropriately redirected a half million dollars of a state grant for the bankrupt Aberdeen beef plant after he left office.

"Any alleged wrongdoing in our office is isolated to a former employee who is no longer with us," Costello said.

The Legislature's Government Operations and Audit Committee wants to make sure it won't happen again.  Policies have been recently revised but lawmakers like Democratic Senator Larry Lucas of Mission wonder if enough is being done to prevent future misconduct.

"You've got conflict of interest and ethics policy but if you violate it you can still walk off with a big check in your back pocket and there are no consequences to get it back," Lucas said.

Costello told legislators that he believes the state has recouped much of the $3.2 million given to the Northern Beef Packers plant Aberdeen through the sales tax and contractors excise tax that has been paid by the project but he welcomes the Legislature’s review and suggestions as the process moves forward.

"This is a serious matter and it deserves serious attention from state officials," Costello said.

The Government Operations and Audit Committee will hold meetings throughout the year and will issue its final report by December 1.

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