PIERRE, S.D. (KELO) — A panel of lawmakers whose responsibilities include looking into state government corruption wants to issue a new set of subpoenas ordering top officials at the South Dakota Department of Revenue to meet with them.

The 2024 version of the Legislature’s Government Operations and Audit Committee decided during a Thursday teleconference to subpoena for a second time Revenue Secretary Michael Houdyshell and the department’s division director of motor vehicles, Rosa Yaeger.

GOAC members had issued subpoenas to Houdyshell and Yaeger to appear at a December 11 meeting of the committee. But a lawyer from the state Attorney General’s staff filed a motion on behalf of the two officials in circuit court to quash, or block, the subpoenas. The committee then canceled the December 11 meeting.

The lawmakers on Thursday voted 9-1 to adopt a recommendation from Republican Sen. David Wheeler that Houdyshell and Yaeger be required to appear before the 2025 version of the committee on April 1, after the conclusion of the 2025 legislative session.

Only two of the 10 lawmakers currently on the 2024 version of the committee will be returning as members of the 2025 version. One of them is Republican Rep. Ernie Otten, who chairs the 2024 panel. He won election to the Senate in November.

“I have no intentions of letting this slide,” Otten said on Thursday.

The 2025 version of the committee will have House members Marty Overweg, Scott Moore, Julie Auch, Eric Emery and Karla Lems and Senate members Taffy Howard, Red Dawn Foster, Chris Karr, Otten and Wheeler. Howard and Overweg have been assigned as

Wheeler, a private attorney, said the new subpoenas would contain more detail as part of an attempt to counter any future attempt to quash them. Wheeler said he conferred with another lawyer from the state Attorney General’s office, Grant Flynn, who is now representing the Legislature in the matter.

The Legislature’s current Executive Board is scheduled to meet on Friday and decide whether to ratify that the new subpoenas can be issued. The board had ratified the original subpoenas to Houdyshell and Yaeger.

One of the former Revenue employee accused of criminal acts, Lynne Hunsley of Pierre, pleaded guilty in circuit court on Monday to one count of forgery and one count of grand theft by deception. Her sentences of three years and one year in prison were suspended and she was instead ordered to serve three years of probation. She also was ordered to pay a combined fine of $1,000, plus $233 in court costs and $1,200 in restitution.

Another former Revenue employee, Danielle Degenstein of Pierre, remains charged with misprision of a felony because she allegedly knew a felony crime was being committed but didn’t report it. It’s a class one misdemeanor punishable by up to one year in jail and a $2,000 fine.

Republican Sen. Jean Hunhoff asked Wheeler on Thursday how the new subpoenas might be affected by the changing courtroom circumstances.

Wheeler said South Dakota case law is scant regarding legislative subpoena authority. “There’s not a lot of guidance we have,” he said, adding that the matters involving Revenue might not be ripe until after April 1.

Wheeler said the Legislature should continue to move forward on its investigation and do its proper role of oversight. That led Hunhoff to ask what happens if the criminal investigations involving Revenue are resolved by April 1. “That would all come down to the Department of Revenue and how willing officials there are to voluntarily meet with the committee,” Wheeler replied.

Wheeler said there might still be a threat of civil litigation against Revenue. That’s possible because of the alleged actions by a third former employee, Sandy O’Day, who allegedly was forging titles for fictitious vehicles that were in turn used as collateral for loans she obtained. She is now deceased.

“It’s really up to them if they want to testify before us,” Wheeler said.

The Legislature established the state Board of Internal Control in 2016 at the request of South Dakota’s previous governor, Dennis Daugaard. The board has been gradually working with various state offices and departments on assessing current controls and establishing stronger ones but hasn’t yet made it through all of them for the first time.

Republican Governor Kristi Noem recently hired a deputy state internal control officer and has requested two additional positions in her December budget proposal to the Legislature. She’s also ordered more training for state government employees. Attorney General Marty Jackley, a Republican, meanwhile has said he plans to ask the Legislature for more laws to enhance accountability, improve transparency, and better protect South Dakota taxpayers.

All this comes at a time when Noem is expected to step down as governor in the coming weeks, after her confirmation as the federal homeland security secretary for the incoming administration of U.S. President Donald Trump. The current lieutenant governor, Republican Larry Rhoden, a long-time former legislator, would then become governor.

Hunhoff and Democratic Rep. Linda Duba pressed the new GOAC panel to keep looking into how motor-vehicle titles were fraudulently issued, as well as the steps being taken to deter future instances of corruption throughout state government, and for ways that the Legislature can strengthen its subpoena authority. Neither Hunhoff nor Duba will return to the Legislature when the 2025 session starts January 14.

“I would only hope that this rises to a level that there’s greater interest among the Legislature as to what those statutes need to be, so that if there are future occurrences that have occurred, that there’s timeliness and access the Legislature has full authority over that process and gets the information,” Hunhoff said.

Duba said she would hate to see the incoming committee not go forward and needs to focus on the processes that were not in place or didn’t work. “I want this next committee to understand how the failures occurred and we’re doing that with this new subpoena,” she said.

The issue of process controls, according to Duba, also needs be considered regarding allegations of theft by a former Department of Social Services employee accused of stealing more than $1.7 million from the child protection services account and a former Department of Public Safety employee accused of falsifying inspection reports for the state Department of Health.

”Just because they’re settling out of court, we should not back away from process investigations. They should occur,” Duba said.



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