Auditor: Department of Commerce Skirted State Law in Creating Governor Burgum’s Pet Project State Logo

Last week state Auditor Josh Gallion announced his re-election campaign.

A number of the state’s prominent Republicans helped in that announcement, including Senator Kevin Cramer, Insurance Commissioner Jon Godfread, and others. But buried at the end of my colleague Jeremy Turley’s article about Gallion’s announcement was this sentence: “A spokesman for Republican Gov. Doug Burgum, who signed the bill into law, declined to comment on Gallion’s bid for reelection.”

A sitting Republican governor declines to offer even a rote statement of congratulations and encouragement to another statewide Republican officeholder announcing re-election?

The bill Turley is referring to was the one passed by state lawmakers earlier this year gutting Gallion’s authority to conduct performance audits, and it’s just one example of the tension between Burgum and Gallion. Another was Gallion’s office looking into the Governor’s office travel records last year.

I think we can add a third to the list. Gallion’s office just dropped a new audit accusing the Department of Commerce of skirting state law in procuring work on a new state logo and “brand refresh.”

You can read the full audit below. This is from the press release just sent out by Gallion’s office:

The audit found two temporary employment contracts were used to stay under the purchasing thresholds that required contractor competition and continue the work from the original contract. These contracts should have been treated as one contract for services and bid appropriately following OMB procurement requirements. The total cost of both contracts was $87,162.50 which would require the Department to follow Level 3 procurement requirements.

The Department also violated their appropriation authorized by the Legislature by improperly charging $853,908 to the wrong biennium. The Department made a $310,931 payment for work completed after the appropriation period had ended and they made a $458,801 advance payment which was unsupported and prohibited in the contract for the Enhanced Use Lease Grant program.

The audit also found that the Department of Commerce did not monitor contract deliverables of an entrepreneurial contract with a total cost of $253,921. As a result, contract payments totaling $123,750 were made to unapproved subcontractors.

“Circumventing procurement laws and authorizing unsupported payments does not promote transparency and accountability but instead, undermines the public’s trust in its government institutions,” Auditor Gallion said.

The logo and “brand refresh” were something of a pet project for Burgum, and it’s been controversial since the beginning. Many find the new logo to be something less than inspiring, and the process through which it was developed and implemented wanting. Last year some 700 people signed an open letter to Governor Burgum asking him to restore the state’s old logo.

Also, earlier this year lawmakers sought to restore the old logo through legislation, arguing that the new logo was developed absent a competitive bidding process for the work.

The logo was created by a Minnesota woman who is a business associate of Burgum’s from his time working in the software industry.

Per the audit report below, the Commerce Department disputes breaking any laws:

The department also disagrees with the audit finding relating to the tracking of contract deliverables, though they agreed that some charges were put in the wrong biennium.

What does this all mean?

For one thing, it doesn’t look great for Burgum, though I’m not sure it hurts him much. North Dakotans don’t have a lot of patience for bureaucracy, generally, and a big part of Burgum’s appeal to the electorate is that he’s a private sector, let’s-get-stuff-done executive. Even if they agree that the auditor is correct, they’re likely going to see it as the governor running afoul of arcane and picayune rules. Though, of course, the involvement of a past business associate of Burgum’s doesn’t help matters much.

For another, this illustrates just how interesting the politics around Gallion’s re-election campaign will get. There have always been fractures within the NDGOP, but they’re typically not this visible to the public. Right now a big faction of the Legislature doesn’t particularly like Governor Burgum, and neither Burgum or that faction of the Legislature like Gallion.

If these folks don’t learn to start playing nice, the Democrats may have some opportunities ahead.

Here’s the full audit report:

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