Defense Rests In Phelps Case; Jury To Begin Deliberating Thursday

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The former head of the American Indian Institute for Innovation, Stacy Phelps, did his best to explain away the evidence against him. 

As this latest GEAR UP trial continues, Phelps was cross examined by the prosecution Wednesday afternoon.

Phelps and Scott Westerhuis were friends who had worked together for some 15 years.  But Phelps’ says he was conned by Westerhuis along with the rest of the world.  On Wednesday, the prosecution tried to poke holes in Phelps’ story. 

Prosecutors are trying to prove a motive for Phelps to backdate contracts. But Phelps claims he didn’t know about any audits and had no idea that the documents he backdated at Westerhuis’ request would up uploaded for state auditors to see.  

However, in an email that Phelps wrote in August of 2015 the subject matter was “GEAR UP Audit.”  He wrote to Dan Guericke, Director of Mid Central Educational Cooperative, that based on the “poking and probing” by the Government Operations and Audit Committee (GOAC), Guericke should use more “conservative estimates for the numbers” of students’ success rate in GEAR UP. 

The prosecution also outlined a series of texts and phone calls from August 5, 2015 through August 11, 2015 when Phelps backdated the contracts and emailed them back to Westerhuis.  But Phelps says he doesn’t remember talking to Westerhuis about the contracts during most of those conversations.

In the original contracts between AIII and Mid Central, AIII is named an administrator of GEAR UP.  In the second set of contracts backdated by Guericke and Phelps, AIII becomes a service provider. Phelps told jurors he “saw it as the same thing.”  Prosecutors say that simple change in language could mean the difference between facing an audit or not.  

In another message to Westerhuis, Phelps wrote that AIII board member STEM Educator Carlos Rodriguez “still thinks AIII is bare bones, and I think that is good at this point.” 

Phelps told jurors he said that because he was trying to transfer Rodriguez and Astronaut John Herrington as board members of AIII to a new organization he and Westerhuis had formed called the American Indian Institute for Innovation and Excellence to build a STEM boarding school. 

Phelps said Rodriguez and Herrington weren’t going along with the idea. 

Phelps also wrote that if Rodriguez “knows that AIII has 35 staff, he will ask much more questions.” 

Herrington testified earlier this week that he had no idea AIII was doing contract work and thought it was just a grant-based organization.  Phelps testified that both Rodriguez and Herrington knew about AIII’s large staff and had even come to South Dakota to meet them. 

Prosecutors are also trying to poke holes in Phelps’ defense that he didn’t know original contracts were uploaded to a state system by using his own words in an interview by investigators in 2015, following the tragedy in Platte.

In that interview, at first Phelps didn’t seem to remember the contracts. Then he said he didn’t know the difference between them. Then he said he thought they were amending them.  The defense attorney worked to show that DCI Agent John Barnes confused Phelps during the interview on December 22, 2015 and used the word amend or amended more than a dozens times.

“I was very confused,” Phelps said.  He later added, “At this point, I was talking about one thing and he (DCI Agent Barnes) was talking about something else.”

At the conclusion of Phelps’ testimony, the state called Barnes as a rebuttal witness. 

Both sides have now rested, with Phelps being the only one to testify in his defense.  The jury will hear closing arguments Thursday morning at 10 a.m. 

KELOLAND News will bring you the verdict when it comes in. 

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