Governor’s daughter had appraisal plan in place prior to meeting, Hultman tells S.D. legislators

Capitol News Bureau

PIERRE, S.D. (KELO) — The oldest daughter of Governor Kristi Noem was treated the same way as at least three other persons in the past year who, like her, also fell short of certification for advancement as South Dakota real-estate appraisers, according to a state official.

Labor and Regulation Secretary Marcia Hultman testified Thursday at a hearing before the Legislature’s Government Operations and Audit Committee. She spoke about the training plan that some of the department’s staff put together for Kassidy Peters that ultimately led to Peters’ certification. The appraiser program is part of the state Department of Labor and Regulation.

The plan, which included an education course out of state, was already in place, according to Hultman, prior to a July 27, 2020, meeting at the governor’s mansion about what could be done to get more people certified as appraisers in South Dakota.

That was the same date as a letter Peters received saying she had been turned down in her attempt to become a certified residential appraiser.

At that meeting were Governor Noem, chief of staff Tony Venhuizen, governor’s legal counsel Tom Hart, Hultman, two DLR lawyers, Peters, and Sherry Bren, who at the time was executive director for the appraiser program.

Hultman said there was a brief discussion at the end about Peters’ situation. Hultman emphasized that the governor didn’t intervene on behalf of her daughter.

Peters went on to receive her certification in November 2020. On December 1, 2020, Hultman reportedly contacted Bren and asked that Bren retire.

Bren, 70, filed an age-discrimination complaint against the department. Bren stepped down in March 2021 after state government paid her $200,000 to withdraw the complaint.

Bren was scheduled to testify to the legislative committee, too. But her lawyer, Tim Rensch of Rapid City, sent an email Wednesday afternoon saying that she wouldn’t appear. Rensch said the committee should contact him if Bren was to be subpoenaed for a later date.

Peters, who now lives at Watertown, wasn’t on the committee’s schedule and didn’t appear. She began in 2016 as a state registered appraiser, where the pay can be as low as $10 per hour. She applied in 2019 to be a certified residential appraiser. She was turned down in July 2020 because her appraisals didn’t meet standards.

Hultman read from a lengthy statement before answering legislators’ questions.

“I don’t believe the licensing process is the time for punishment or punitive actions. If someone fails a class or classes in high school, we don’t say you’re denied your diploma, but rather, we give additional opportunities for success, or failure,” the former teacher said. ‘We should never grant a license if competence has not been demonstrated by the legally prescribed method, nor should we say never to an applicant willing to take extra steps to learn the trade.”

Senator Reynold Nesiba asked Hultman whether she was aware of the governor at any other time intervening in an appraisal application “in the way that she did in the one involving her family member.”

Answered Hultman, “I believe that question has a presumption that the governor did intervene in the process. I have no answer as to whether or not it happened any other time.”

Hultman brought statistics showing 40 certifications issued in 2018, 28 in 2019, 33 in 2020 and 36 in 2021 and no denials in any of those years. She said the program tries to find a path forward to success. “Is there additional education? Is there additional mentoring? Are there other opportunities for them to come back and resubmit or retake at the appropriate time?”

She said the office contracts with independent appraisers from South Dakota and elsewhere to review candidates’ work anonymously.

Senator David Wheeler summarized his understanding. “After the meeting at the residence, would Sherry Bren have had any discretion to approve or deny Kassidy Peters’ application?” he asked Hultman. She replied, “The process was in place, and so the ultimate decision on approval or denial rested on the review done by the contracted appraiser.”

“And that’s what I’m trying to get at,” Wheeler continued, “is that, if we’re all trying to make a deal out of this meeting, but after that point there wasn’t an opportunity for Sherry Bren to approve or deny the application, then whether any pressure was brought to bear or not is pointless, because there was no opportunity after that point. And that’s what I wanted to make sure I understand the process correctly, that there wasn’t some discretionary period after that point, where pressure could have in any way affected Kassidy Peters’ application.”

Hultman said, “The approval or denial really rests on the findings from the independent review of the appraisals submitted.”

Also testifying Thursday was Sandra Gresh of Britton, president for the Professional Appraisers Association of South Dakota. She had sent to the committee a letter and survey results regarding the current rule-changes proposal.

Gresh said the organization never received notice about them from the state office and happened to learn about the proposal from another group.

Daryl Washechek from Nemo serves on an advisory council for the state office. He told lawmakers there hasn’t been a meeting since February.

Representative Linda Duba asked if there was a possibility the committee could see the plan that was prepared for Peters. Said Hultman, “We would have to review the open records (laws) as relevant to that. I’m not sure how that would all work.”

Another witness called by the committee was Craig Ambach, director for the state Office of Risk Management. One of his duties is overseeing the state Public Entity Pool for Liability, sometimes known as the PEPL fund. Ambach said he made the decision to pay the age-discrimination claim brought by Bren. State expenses such as for an outside attorney brought the total amount to $219,151.72.

Four legislators took turns at the end harshly criticizing or partially defending the Republican governor.

“The first thing that I see is just a disregard for the appraisers in the state of South Dakota,” Duba said. “Not sure why — might want to understand and depose the new (director) and find out why that’s happening.”

Duba went on, “We invited an individual to that meeting who had, who was having difficulty getting certified. And clearly the secretary said that is not a normal process, that it hadn’t happened. We need to understand why that happened… Now we don’t know the contents of that meeting, and we don’t have Sherry Bren here to talk to us about her situation. And she’s also had to sign an agreement that said she will not disparage the department. I respect her for that.”

Senator Jean Hunhoff focused first on the advisory council’s recent inactivity since Scott Amundson took over as executive director. “It hasn’t met since February, so I think that’s an opportunity to maybe send a memo or send an ask to the department to say, are you going to? We’ve heard that’s important, and we’d like a status update if that advisory council is going to continue, because I think that’s a very important piece of information.”

Hunhoff added, “What we did here is a plan was prior made, that there was an agreement, alright, so that was in place. Again, we don’t know all the details, but we do know that a plan was put into place. So, I think that says, you know, that was, and that’s open to anyone, we did hear that other people can have mentoring… I think that unfortunately there maybe was an action or behavior that was done, and we all in management in our own businesses or whatever, sometimes we do faux pas, and we learn from that. So, I’m just hoping that is. But I don’t believe it was out of context in the sense that the plan was in place for this individual to move on.”

Said Wheeler, “Regarding the application for Kassidy Peters, is that the conversations that she had to get her license with Sherry Bren occurred before the meeting at the residence. And that after that point, her license was no longer in Sherry Bren’s hands. It was in the hands of her, Kassidy herself, to complete her education, and in the hands of the independent reviewers who were then going to review her work product as part of her examination.

“And to me that is important to point out as something I learned new today. There’s two ways of looking in that. One is that the governor had a family member who was going through the process and maybe there’s an insight there you can have easy access to learn about. On the other hand, she had a pending application for a licensure, and it does create the appearance of conflict that generated all the controversy that brought us here today… But when we get down to the facts of what actually happened, the evidence that we have today indicates that there was at no point pressure brought on Sherry Bren to have any effect on Kassidy Peters’ license.”

Nesiba said things could have been clearer if Bren had testified. “It would be really helpful if we could waive that anti-disparagement clause to find out what happened, fully, in that meeting at the governor’s residence. We’re not able to hear the voice of Sherry Bren and how she interpreted what happened at that meeting. As the good senator from Huron suggested, it continues to look bad, but we can’t either clear the air because we can’t ask the rest of the questions because of the anti-disparagement clause.”

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