Auditor explains decision to release credit card records

Yahoo

18-05-2025

PIERRE, S.D. (KELO) — The man who's been elected four times as South Dakota auditor and twice as state treasurer has decided to share some of his thoughts about spending of tax dollars, public records and transparency.
Rich Sattgast has, at times, been in the news in recent months for his decision to release information about the use of official credit cards by former and current governors of South Dakota.
On Friday, Sattgast sat for an interview with KELOLAND News. He spoke about his decision to provide the records to several news organizations, as well as changes in the makeup of the Legislature that suggest lawmakers have become more interested in openness for state government finances. He also talked in greater depth about possible steps that lawmakers could take to hold governors and other state elected officials more accountable for their travel spending.
Kristi Noem resigned as governor on January 25, after the U.S. Senate confirmed her as the new federal Homeland Security secretary. Her decision to step aside made her running mate, Lt. Gov. Larry Rhoden, South Dakota's new governor.
Records released by Sattgast's office in February showed that Noem and her staff, during the six years she was governor, charged approximately $750,000 of purchases, including large amounts for out-of-state travel, on the governor office's two official credit card accounts.
The political fall-out from the credit-card controversy was on display May 8, during a meeting at the Capitol of the Legislature's Government Operations and Audit Committee. Sattgast was in the room, as were various other state officials involved in the procurement process, including the governor's budget director, state Finance and Management Commissioner Jim Terwilliger.
After Commissioner Terwilliger finished his prepared testimony, the panel's vice-chair, Republican Rep. Marty Overweg, raised a series of questions. One was about the process of submitting a governor's credit-card expenses to the state auditor as a necessary step to get them paid.
'So when you get done with the bill and you send it over to the auditor's office, does the auditor know which individual spent the money for each transaction?' Overweg asked.
'Not necessarily,' Terwilliger answered. 'Likely not.'
There was a long pause. Overweg shook his head.
Then Terwilliger added, 'But I would clarify that. It all has to be related to travel related to the governor's office, and so there's very few folks that have these cards, and that's reviewed very closely, not only when the purchase is made, right — there's got to be a determination, we're spending taxpayer dollars here, and with the finance officer, they have to review that and verify that these charges are related to conducting state business.'
Overweg replied, 'I get that commissioner, but what I'm saying is you're using taxpayer money to travel, your oversight is not you, your oversight is the auditor's office. So if you work for me and you turn your credit card bill into me to pay for it, I know who's turning the bill in, and I know who I'm paying back for a transaction. So I'm saying there should be, the auditor should know which individual working for the state is making each individual purchase. That makes good business.'
'Maybe the auditor can speak specifically to that,' Terwilliger responded. 'But there's a card assigned to a specific person. I would assume that there is a trail to who made that purchase.'
Republican Sen. Taffy Howard is the new chair of GOAC. She had tangled with then-Gov. Noem in 2021, when Howard brought legislation that sought to make a governor's or any other state or public official's security expenses public record, including 'including costs of meals, lodging, travel, and compensation.'
A House committee killed Howard's bill, after then-Public Safety Secretary Craig Price, who had been appointed by Noem, and retired South Dakota Supreme Court Chief Justice David Gilbertson testified against the proposed changes. A similar measure in the Senate later failed after its first committee hearing, again after Price and Gilbertson spoke against it.
Howard was candid at the May 8 meeting about why GOAC was now looking at how governors use their office's credit cards. 'One of the reasons we wanted to have this on the agenda is, and I'll be honest — the elephant in the room — the previous governor did a lot, a lot, of traveling,' Howard said.
Noting that the expenses have to be determined as allowable, Howard pointed out there were purchases made on the cards during Noem's time in office such as several $500 charges for Sirius XM radio. 'The taxpayers have an issue with that. I have an issue with that,' Howard said. 'So where can we find in statute what are these allowable expenses?'
Commissioner Terwilliger, who had been appointed by Noem, didn't refer to a specific state law. He indicated instead there is an inherent understanding between South Dakota voters and the candidates they choose for state office.
'The governor is elected by the people. They're accountable to the people,' he said. 'So at this level, I think there's certainly another level of accountability that when it comes to travel expenses, the governor is really accountable at that level, too because he or she is elected by the people.'
Howard asked why The Dakota Scout had to sue to get the records. Terwilliger answered that the payment amounts had been publicly available at open.sd.gov for 'a number' of years. 'I think there is a significant amount of transparency as it relates to this,' Terwilliger said.
KELOLAND News checked and found Terwilliger's statement to be accurate, at least as far as monthly lump amounts paid to the credit card operations of Citibank and First Premier Bank. But the next sentence from Terwilliger to the legislators that afternoon reflected what can't be found on open.sd.gov.
'I think where they're coming from,' Terwilliger said, 'is they want specific, more detail, the actual statement itself.'
That is what Dakota Scout and KELOLAND News eventually got. Those records, known as vouchers, are what the governor's office and other state government offices submits as requests to the state auditor for payment.
Open.sd.gov was created in 2009 at the same time that the Legislature established South Dakota's new public-records laws. Those laws include a statement saying they 'shall be liberally construed whenever any state, county, or political subdivision fiscal records, audit, warrant, voucher, invoice, purchase order, requisition, payroll, check, receipt, or other record of receipt, cash, or expenditure involving public funds is involved in order that the citizens of this state shall have the full right to know of and have full access to information on the public finances of the government and the public bodies and entities created to serve them.'
That 'liberally construed' portion was part of the argument Dakota Scout made in seeking the governor's credit-card vouchers from Auditor Sattgast. On Friday, during the interview, Sattgast acknowledged that he initially resisted that request.
Sattgast said his decision to at first say no was based on a ruling from the state Office of Hearing Examiners that all of the governor's credit-card vouchers should be withheld, because they included some information about the governor's security, and state law says that information is exempt from public disclosure.
Dakota Scout then sued for the vouchers. In a settlement, Sattgast turned them over, because Noem no longer held office. The next week, KELOLAND News requested and received the vouchers, too.
In the interview, Sattgast said that open.sd.gov doesn't provide the more detailed financial information which was being sought about the credit-card charges.
'I would say that open.sd just gives you a broad oversight, a very broad oversight, of the spending, the level of spending that's going on,' Sattgast said. 'It may categorize it but doesn't break it down into individual expenditures or anything like that.
'I think it in its original conception when open.sd was being put together, I think the Legislature when they were funding that project, I think they thought it would be a little more transparent than it currently is,' Sattgast explained. 'From the standpoint of being a state auditor, I would like to see more transparency come about through open.sd, in some ways much like what has occurred in other states.'
During the GOAC meeting, Republican Rep. Julie Auch was next to speak. Addressing Commissioner Terwilliger, Auch said, 'Even though the governor did make these charges, she too has to answer to the people. And you are in charge of those cards. So where's the accountability for the $500 charges for Sirius XM radio and all those charges. You keep referring to the auditor, but actually it comes through your office first.'
Terwilliger responded by discussing some of the review process that he said was conducted after then-Lt. Gov. Rhoden became governor in January, following Noem's resignation to accept an appointment as the federal Homeland Security secretary in U.S. President Donald Trump's second administration.
'We've looked at a lot of this,' Terwilliger said. 'We've looked at the different policies that are in place. We've looked at the decision-making tree, if you will. We've developed internal policies to clarify that, so it's more clear. I'd also tell you that we've also canceled subscriptions as it relates to Sirius XM radio and what have you.
'The other thing that has been done to really what I say improve transparency or make it a little bit better — I want to be clear, this has been reported, it's talked about these have all been charges from one individual, that's not the case,' Terwilliger continued. 'A lot of these, actually the vast majority of these costs, travel costs, are related to the security and the security detail to making sure that our governor is safe and secure when he or she travels.'
Next, Terwilliger explained the changes that Gov. Rhoden has made. 'We've separated and created, instead of having just one account, there's actually now two accounts. One where the governor will have all of his or her personal travel expense and another that has the security detail. That will be expensed in two separate accounts so we can track that better, as well as be more transparent with some of those things in the future,' Terwilliger said.
Auch asked how many credit cards 'exactly' of this type are in state government. Terwilliger declined to be specific. 'One of the reasons that this has been an issue, if you will, is, we've had a position as a state that all the details as it relates to travel expenses related to the governor, which includes a significant amount related to security detail. If that falls into the wrong hands, there's a security risk there for our governor.'
Terwilliger said that the first week Gov. Rhoden was in office someone was arrested for threatening him.
Responded Auch, 'By all means I am not belittling that at all, but I do, as an elected official of the people of South Dakota, we need to be accountable. And no we can't be accountable for every penny, but this is serious money.'
She added, 'I just think we need to be a little bit more accountable to the taxpayers' money. This is their money. So that is why I'm asking these specific questions. By all means I'm not trying to be disrespectful.'
Howard followed up. 'I think we all, we all want to make sure our governor is safe. There's no question about that. But i think part of the issue is at what point do taxpayers have to pay when we're paying for security details for travel that is not state related. Is there a requirement that travel be state related? Is there anything in state regarding campaign versus state related?'
Terwilliger said he's not an expert on campaign finance law but said to his knowledge there's no expense that was campaign related, aside from providing security. Howard then asked why a campaign such as Trump's wouldn't pay for the security.
Terwilliger again said he doesn't know all those rules. 'All I know is that South Dakota Highway Patrol, their mission is to provide adequate security for our governor all the time. And so, wherever the governor travels, it's their mission to provide that security, and what comes along with that is some travels costs related to that security.'
A state law specifically includes a provision that 'no state officer or employee shall be paid travel for attendance at any political meeting.'
In the interview, Sattgast said Terwilliger's description of Gov. Rhoden's different approach of separating security expenses from his own travel expenses was accurate. 'We've seen that come through. From the standpoint of being able to determine what the governor has performed as far as travel and everything, makes it a little more clear for our office and a little more detailed,' Sattgast said.
Sattgast was asked in the interview why security costs would be charged to the governor's credit card, rather than submitted through the state Department of Public Safety, the agency that oversees the budget for the Highway Patrol. 'I think because in the past there typically had been only one credit card. That was probably the reason why. But that's an internal function. We don't set the rules on how the credit cards are handled. We just audit them for accuracy,' Sattgast said.
The governor's office is the only one in state government that has its own credit card accounts. Other offices use state government's procurement-card system. Sattgast said the Noem administration was the first during his two decades in state elected office to have credit card accounts with more than one company.
'They had the regular credit card that previous governors have had and they had taken out a second one which was with First Premier. And I don't know the internal reasoning for that,' Sattgast said.
KELOLAND News searched on open.sd.gov for the payments made to Citibank and First Premier, the two credit card accounts for the governor's office. Those can be found under the subheading 'Vendor Checkbook.' For First Premier, the state payments began on Feb. 15, 2019, roughly five weeks after Noem took office as governor. The largest to First Premier was $29,708.60 on April 9, 2024.
For 2025, through May 15, state payments to First Premier totaled $116,738.85. For 2024, payments to First Premier were $174,616.40. And for 2023, they were $184,947.12. For comparison, the Citibank account shows no payments for 2025; $6,983.31 for 2024; and $8,390.17 for 2023.
During the GOAC meeting, Rep. Overweg, referring to Gov. Rhoden, told Terwilliger, 'I don't think there's anybody up here that worries about this governor. That's not the case. We look back, because we have to move forward. Who's going to be the next governor and the next governor? And it's our job as legislators to set up parameters, just like we talked about this morning for everything.
'So your answer cannot always, when the legislative process asks for an explanation, the answer cannot just be hiding behind security all the time,' Overweg continued. 'We have to figure out a way how we can ask questions and get them answered on charges without someone just saying, 'That's security. You can't know.' That doesn't work for me. There has to be a way.'
Terwilliger said Rhoden's approach of separating travel from security into two accounts will be more transparent.
'It makes perfect sense,' Overweg replied. 'I'm just saying, moving ahead, what if the next governor says, 'No, I'm not doing it that way.' You know we have to set the rules. There has to be somebody in the state whether it's the auditor who can be trusted with security issues and go through everything.'
The word 'security' doesn't appear under any recent First Premier invoices shown on open.sd.gov, although the governor was traveling frequently accompanied by a security team. The phrase 'Lodging-out of state' does, repeatedly, and carries some big dollar amounts.
A $22,386.69 payment made Feb. 6, 2025, on the governor's First Premier account shows $16,035.02 for lodging out of state. A $16,212.14 payment on Jan. 16, 2025, to First Premier shows $10,151.88 for lodging out of state. A $11,794.24 on Dec. 20, 2024, to First Premier shows $3,485.89 for lodging out of state.
A state rule says state constitutional officers and public utilities commissioners shall be paid actual expenses for out of state travel. The same rule caps the amount a state government employee can spend for one night of out of state lodging at $175 plus tax, unless the employee has permission to spend up to an additional $100.
Terwilliger told GOAC's legislators that the payment invoices on open.sd.gov for First Premier show 'every transaction.' KELOLAND News looked but didn't find that level of detail. The invoices instead list lump amounts for broad categories of purchases. The May 5, 2025, invoice for example shows $1,247.02 for 'NON-TAXABLE MEALS/IN-ST' and $122.67 for 'LODGING/IN-STATE' but doesn't list where the meals or lodging were charged, nor who charged them.
An official voucher number is listed with each payment. Seeing a voucher requires contacting the auditor office. In the interview, Sattgast said his office doesn't have the staff to post on open.sd.gov all of the approximately 280,000 vouchers received each year. The office has seven people on auditing staff including 'four to four and a half' who handle the individual vouchers, according to Sattgast. He said that breaks down to 250 vouchers per day for each.
'Being able to post all of these, we would have to be selective in it I think, because these are not digitized documents, these are all paper because we need actual receipts when we're auditing these vouchers. From that standpoint I think it would be quite laborious for us to do that, and with the level of staff we'd have to increase our staff to perform those functions,' Sattgast said.
Sattgast was asked during the interview about governors using security when they travel. Bill Janklow for example didn't have security during his two terms as governor from 1995 through 2002. Nor did the governor who lost to Janklow in the 1994 Republican primary.
'To kind of put a little historical premise on this, I remember a story of Governor Walter Dale Miller attending a conference in Washington, D.C. and he just pulled up in a taxi. And the other governors looked at him and said, where's your security detail?' Sattgast said. 'And he said, Security detail? He said, I drive my pickup to work by myself and I don't have a security detail.'
Sattgast didn't recall that U.S. Sen. Mike Rounds, who had followed Janklow as governor, having a security detail either. Dennis Daugaard followed Rounds as governor. That's when Sattgast said he started noticing security at some events. Noem, who was South Dakota's first woman to serve as governor, took security to a new height. She had an iron fence installed around the Governor's Mansion and had security personnel almost constantly travel with her.
Sattgast won his first term as auditor in 2002. That gave him an inside seat to see spending patterns by the Rounds, Daugaard and Noem administrations. In the interview, Sattgast said those patterns changed.
'I think we're taking a look at a little bit of apples and oranges in that respect,' Sattgast said. 'In my first term as state auditor the state of South Dakota was not quite as financially flush as it has been in the last six years due to COVID influx money coming through. And so I think there was a little bit more of the idea that we need to conserve on how we're performing our travel.
'And then during the Gov. Daugaard years, the state was looking at ten percent cuts and so everything was really being scrutinized,' Sattgast continued. 'In 2020 when all of a sudden we started having a large influx of federal dollars and the state became very flush with funds, I think overall in state government and not just in the governor's office but in agencies across the board you saw more expenditures going on and a little less scrutiny going on at agency levels. There's the difference we've seen, the level of scrutiny.'
Sattgast noted another difference in how some leaders of some of the state agencies approached spending.
'Also I think in the past in those previous administrations you'd had people in the executive branch that had been in state government for a number of years and had not come from the private sector. And so when you see private sector individuals coming into state government they have a little different mentality on the spending allotment of what goes in state government,' he said.
'I would say on the corporate level they're used to having expense accounts and things like that. And so the switching in the idea that these are taxpayer dollars that we're trying to conserve and use in the best way that the taxpayers would feel comfortable in, is a little bit different than corporate leaders that are probably a little used to have a little bit finer or luxury way of spending in their accounts,' he said.
When Sattgast's turn came to testify at the GOAC meeting, he suggested that legislators could hold governors and all elected officials more accountable. In the interview, he was more specific.
'This body in the Legislature is taking a look at this a little more seriously,' Sattgast said. He referred back to 2021 when lawmakers killed the two measures that sought to make security expenses public records. 'They were working at probably bringing greater transparency to the travel of the governor. Both of those were rejected by the Legislature. But from the sound of the GOAC meeting that we attended last week, it sounds like the Legislature is a little more in favor of possible either putting greater restrictions or a little more openness.'
What would those be?
'One of them could be a little bit greater oversight by the Legislature itself, maybe actually reviewing those governor's transactions or maybe every elected official's transactions, because currently the way the rules are written, all the elected officials get actuals, at least those that are within the executive branch,' Sattgast said.
The Legislature sets its own rules for reimbursing lawmakers' expenses, and the South Dakota Supreme Court chief justice sets rules for the state court system, according to Sattgast.
His ideas for steps lawmakers could take?
'What they could do is, number one, is have greater scrutiny, maybe request those records so they could see what elected officials are spending their resources on. The other thing they could do is maybe require a report or something like that from each elected official,' he said.
Those reports could be annual or quarterly. 'Just giving the Legislature an update,' Sattgast said. 'I think that would be something that would be fairly simple to do.'
Regarding the Dakota Scout's request for the vouchers, Sattgast said the initial denial was based on a hearing examiner's finding that the records shouldn't be disclosed for safety reasons. 'Then my office was sued for those records. I thought that was the right thing to do. And we were moving forward with the court case, but all of a sudden that became moot, when that governor was no longer the governor.
'I would have liked to have seen it gone, go to court, because then we would have had a definitive answer. Either that, or the Legislature really needs to define in this area what should be released or not released,' he said.
Sattgast served in the U.S. Army and was a military bodyguard for Lt. Gen. William Pagonis during Operation Desert Storm, the air and ground operation conducted by a US-led coalition against Iraq in the Persian Gulf War in 1991. He said that experience showed the value of not revealing security information.
'When you're dealing with personal safety, that's something we take very seriously,' Sattgast said. 'So that's why we sided with the Office of Hearing Examiners, because they had the legal responsibility to make those determinations. And then beyond that, going to a judge would have helped push toward a final decision on that.'
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