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October 30, 2017 10:32 PM

Schopp: DOE Talked About Pulling GEAR UP Contract With Mid Central Long Before 2015

By Angela Kennecke

Pierre, SD

KELOLAND Investigates recently brought you an update on the GEAR UP criminal cases.

KELOLAND News has obtained the deposition of outgoing Secretary of Education, Melody Schopp in one of the civil cases over GEAR UP.  

You'll remember that Alyssa Black Bear and Kelsey Walking Eagle filed a lawsuitagainst Mid Central Educational Cooperative for breach of contract, claiming that they and other Native American students did not get the services promised by the GEAR UP program. 

Their lawsuit expanded to include Mid Central Board members and the American Indian Institute for Innovation, which took GEAR UP grant money to run the programs. Mid Central then turned around and sued its auditor Schoenfish and Company for malpractice.  

Last week, Melody Schopp's deposition was taken by attorneys representing all parties in the civil case. 

Here's what we learned from her sworn testimony:

In Secretary Schopp's deposition, she said Mid Central prepared the annual performance reviews of the GEAR UP program.  

John Hinrichs, the attorney representing the two students in the case, asked: 

"So do I understand you correctly then that there was no independent verification of that data by the Department of Education?"

Schopp responded: "That's correct."  

As KELOLAND Investigates originally reported, South Dakota got a waiver from the feds for the scholarship portion of the grant.  Other states are required to give half of GEAR UP funds in scholarships to students for college.  South Dakota didn't have to give any.  

When asked whose idea this was Schopp said: 

"So there was a discussion and I know that I want to be -- I believe it was with Stacy Phelps."

Phelps is now facing criminal charges in the GEAR UP case. 
Schopp defended her department's financial oversight of the GEAR UP program, but said ongoing problems with documentation by Mid Central had her department discuss terminating their contract long before 2015.

Schopp said, " there had been discussion--yes, I'm just going to say yes."  

Schopp has repeatedly said that not a single dime of GEAR UP money was missing because Mid Central supplied documentation for all the money it received from the state. 

However, we know that the American Indian Institute for Innovation, which was supposed to be running the GEAR UP programs, was just awarded nearly half a million dollars from the Westerhuis estate for money spent out of its accounts inappropriately by Scott Westerhuis.  AIII provided documentation for nearly $1 million in spending by Westerhuis on its accounts.  

Attorneys for the two students in the civil lawsuit tell KELOLAND Investigates that just because the state got receipts, it doesn't mean students' benefited as intended.  

The women who filed the civil case are waiting for the judge to decide whether it can be a class action lawsuit

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