North Dakota Attorney General Asks for Law Enforcement Investigation Into Commerce Department Audit Findings

In September, Auditor Josh Gallion’s office released the report of an audit of the North Dakota Commerce Department.

You can read the full report at the link above, but this is a summary of the findings:

In a response included in the audit report, the Commerce Department agreed that funds were not used in the proper biennium but disputed the findings related to inappropriate payments to subcontractors and circumventing procurement policies.

It seems the matter won’t end there, however. According to an October 24 letter I obtained through a records request, Attorney General Wayne Stenehjem has requested the South Dakota Division of Criminal Investigations assist “with an investigation related to the ND State Auditor’s findings in the annual audit of the ND Department of Commerce.”

The letter references a section of the North Dakota Century Code which allows the Attorney General to appoint ad hoc special agents for “a specific law enforcement purpose.”

Here’s the full text, a PDF is embedded below:

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.

North Dakota AG’s office spokeswoman Liz Brocker did not immediately respond to follow-up inquiries about the request. I’m assuming it was made to avoid any conflicts of interest related to one division of North Dakota’s state government investigating another. I’ve also asked if there was any specific finding in the audit being investigated, or if all of the findings would be reviewed.

North Dakota Commerce Department spokeswoman Kim Schmidt also did not immediately respond to a request for comment. UPDATE 10:34am: Commerce Commissioner Michelle Kommer provided this comment:

“Commerce is committed to transparency and a sound financial control environment. In addition, we are committed to making a positive impact for North Dakota, being responsible stewards of taxpayer dollars.”

 “Commerce did not agree with all of the opinions included in the report, but recognize there is always room for improvement and have identified appropriate control enhancements. While we are aware that the State Auditor has referred the audit to the Attorney General for further inquiry, we believe Commerce has adequately addressed the audit concerns by committing to these improvements.”

I spoke with Mike Nowatzki, spokesman for Governor Doug Burgum, about the request and he said he’d be getting back to me with a response.

“We did send the audit down to the Attorney General’s office in accordance with the century code,” Gallion told me when I inquired about the letter. He declined any further comment.

Lawmakers on the Legislative Audit and Fiscal Review Committee (LAFRC) will be reviewing this report later this week.

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