SDWC Top Ten Political stories of 2023 (Part 2)

Reaching back to my post of 2 days ago, I’m continuing the countdown on the top 10 SDWC Political stories of 2023 with numbers 5-3…

 

5. The fall and resurrection of the South Dakota Democrat Party

This has not been a good year for the South Dakota Democrat Party. In April, as Democrats were coming off of another unsuccessful election and lackluster legislative session, Chairman Randy Seiler, a man who was generally liked and respected by Democrats and Republicans alike, suddenly passed away after going into cardiac arrest while jogging.

Seiler was within days of finishing his term, and with his passing, Vice Chair Jennifer Slaight-Hansen immediate took over. Slaight-Hansen had been named as the new chair at the end of February with 93% of the vote. Where Seiler was universally liked as it turned out, his successor ended up being universally loathed.

The chair’s downfall began after the Democrat party hired former Legislator Dan Ahlers, someone with actual election experience as their new executive director. Within 3 months, Ahlers resigned in a brouhaha which brought national attention to the SDDP as Ahlers leveled accusations of a hostile work environment, potential FEC violations, “demeaning and foul language” from the chair when dealing with party staff, and hiring people without board approval.

In other words, Slaight-Hansen was the antithesis of her predecessor. And for a party in a super-minority, this was not publicity or problems that Democrats needed.

This triggered Democrat Legislators and leaders of the largest county organizations to call for Slaight-Hansen’s head, with Slaight-Hansen trying to chalk it up to saying she and Ahlers never developed a good working relationship.  Literally, the only Democrat defending Slaight-Hansen was former state Sen. Susan Wismer, but the handwriting was on the wall as Democrats off-loaded their Slaight-Hansen baggage. Dems voted 57-0, with two abstentions, to remove Slaight-Hansen from office.

Slaight-Hansen vowed to appear the party’s decision, but ultimately with those numbers, she found herself not being very appealing, with the decision being upheld in September. Shane Merrill from Parker, the current vice-chair, was elected to serve as Chair of the Democrat Party, as they attempted to right their overturned life raft.

Merrill quickly rehired Ahlers to return to the Democrat Party in October, where he now runs Democrat party operations in the state, as they attempt to pick up legislative seats, and rebuild the crumbled foundations of the state’s minority party.

 

4. Pipeline Wars erupt as populists attack ethanol industry’s plan to sustain saleability

In South Dakota, apparently, there’s no battle like a pipeline battle, as 2023 has been dominated by fights over carbon dioxide pipelines to enhance ethanol’s use as a green fuel alternative, and sustain the $2.4 billion in area household incomes and more than $4.4 billion in corn production it provides in South Dakota as well as the 30,000 jobs in-state.

The year started off with battles during the 2023 legislative session, with legislative attempts to halt CO2 transmission lines in the state, trying to re-define what constituted a commodity (excluding CO2, of course), and generally creating roadblocks for pipeline permitting. Those attempts fell flat and were killed, but the temperature of the pipeline wars were increasing.

For a state that had previously attempted to criminalize riot-boosting with regards to pipeline protests for the Keystone XL pipeline, you now had some of the same people who fought to jail protesters from the Keystone XL oil pipeline now fighting to stop a pipeline for the transmission of Carbon Dioxide, which is currently being released into the atmosphere.

Predictably, the populists of the legislature, having been stymied during the normal legislative process found themselves calling for a special session. Governor Noem noted in social media that “If the legislature wants to call themselves into special session to change the law, I look forward to reviewing what they send to my desk.”  Of course, with the Senate lacking any interest in revisiting an issue which could not get past the committee process in that chamber, there was no way that a special session was going to happen.

Pipeline opponents fared better in their push against the ethanol industry with the Public Utilities Commission. In September, the Navigator CO2 pipeline’s application for a permit to construct the Heartland Greenway carbon capture pipeline in South Dakota was denied by the PUC, on the basis of that they failed to “adequately disclose carbon dioxide plume modeling, and a failure to provide timely notices to some of the landowners along the proposed route.” This effectively killed the Navigator Project.

The Summit Carbon Solutions (SCS) pipeline found itself similarly at odds with the Public Utilities Commission, as in September the PUC denied Summit’s pipeline application “because the project would violate county ordinances related to setbacks and other aspects of the pipeline route.”  However, while Navigator lacked visible public support, at the time of the denial, Summit had 73% of landowners along the proposed South Dakota route who have signed voluntary agreements.”  And with that, the pipeline company took a step back to plan and regroup.

The PUC’s rejection of the Summit Carbon pipeline has also generated other controversies, with those in favor of ethanol and the sequestration project not holding their tongue on the PUC’s decision, as it generated other headlines, as Senate President Pro Tempore Lee Schoenbeck called out State Treasurer Josh Haeder, questioning his intelligence and labeling him as “anti-ethanol” for his decision while sitting on the PUC board opposing the SCS pipeline.

Even more forcefully, the CEO of GEVO, who was set to put a 1 billion dollar bio-jet fuel plant into east-central South Dakota, adjacent to Lake Preston, pointed out that unless the landscape changes for CO2 sequestration in the state, that they may be forced to take their project elsewhere, noting “CO2 pipelines and sequestration have met resistance in South Dakota, but it’s part of the future of carbon abatement and renewable and sustainable fuel.”

The CO2 pipeline wars show no sign of abating in South Dakota, as ethanol and bio-fuel producers fight for survival against “NIMBY” activists and some of the same environmentalism interests who fought oil pipelines.  Whether anyone likes it or not, ethanol is fighting for survival in an environment where purchasers are passing over product that doesn’t have a reduced carbon footprint. And if they are not allowed a way to do that in South Dakota, a multi-billion dollar industry faces collapse.

 

3. Conflicts of Interest

There was a little rumble over legislative conflicts of interest early on this year, when in January, I wrote about several contracts out there with State Representative Kevin Jensen’s name on it as the fiscal officer for contracts/grants written between his wife’s business while he has been serving as a state legislator.  But, it was only the first crack in a wall of questions over what constitutes a conflict of interest with the work a legislator does. No one really knew the dam was soon to break.

The conflict of interest issue exploded with the announcement that the Governor requested and Attorney General initiated an investigation in July of State Senator Jessica Castleberry after it was discovered that her business had received $603,000 of COVID-relief funds.  Apparently, the investigation was triggered after a Social Services employee noted the Senator’s name on a $4000 grant application.

A hard deadline for Sen. Jessica Castleberry to either pay back the $603,219 in funds she collected for her daycare business, Little Nest Preschool, or to come to an agreement with the state on how to move forward under threat of legal action, was asserted by the Attorney General. Ultimately, Castleberry and the Attorney General struck an agreement for the state to be repaid $2400 a month over 20-30 years, and the Senator resigned from the legislature.

Senator Castleberry, in her defense, had relied on legal advice which had informed her that she could accept the funds because they were federal dollars. Unfortunately, South Dakota law did not agree.

This episode started a flurry of reviews and reports that other lawmakers may also have received state funds through their business, and/or have an indirect relationship to receiving their salaries through funds which originated with the state.

Around September, State Senator Lee Schoenbeck began working with the LRC to outline policies for legislature’s executive board to review what constituted an unallowable indirect conflict, yet that process was fraught with questions over what actually was disallowed.  At one point, State Auditor Rich Sattgast noted to the exec board that competing legislative factions were engaging in finger-pointing conflict allegations noting “We have these factions that are trying to take one another out, and they’re trying to use this office as their way of going about that.”

As the executive board found themselves slogging through the questions, Governor Noem was yet to name a successor to Jessica Castleberry.  Governor Noem reportedly was intentionally not quick to fill Castleberry’s position because of the conflict-of-interest concerns of potential appointees.  At this point, with the support of the House and Senate, the Governor asked the Supreme Court for guidance about conflict-of-interest rules for lawmakers. This request became more important as another kink in the works occurred with District 34 State Representative Jess Olson resigning for ongoing health reasons, leaving the Governor now 2 legislative seats to fill.

The Legislature hired former US Attorney Ron Parsons to assist in the conflict of interest case in writing an amicus brief on it’s behalf, while Governor Noem used her in-house counsel, and the Attorney General also submitted a brief.

At the end of the year, the South Dakota Supreme Court finally agreed to hear oral arguments on the day before session as to the question of conflicts-of-interest, and possible guidance as to what constitutes a conflict of interest for legislators, and how far indirect conflicts might stretch before the courts will snap them back.

Conflicts have been a big issue that have dogged State Government since statehood. And maybe we’ll see some light at the end of the tunnel in coming months. Maybe.

 

Stay tuned for the final top 2 SDWC Political issues of the year!