Slandering the Red States, Part IV: The Lieutenant Governor

I have been investigating National Public Radio’s three-part series on child welfare in South Dakota. Briefly, NPR claimed that South Dakota’s Department of Social Services sends social workers onto Indian reservations to “kidnap” Indian children, who are then placed more or less exclusively in white foster care–a transaction which NPR alleged that the state carries out for profit. I refuted these bizarre claims here, here, and here. I have also sent two emails to Laura Sullivan, the NPR reporter responsible for the series, asking her a number of questions about her allegations. She has not responded.

Now on to Part IV. It was only a matter of time before NPR’s series turned explicitly partisan–after all, NPR doesn’t exist to attack social workers. Part 2 of NPR’s series tried to link the “scandal” of kidnapped Indian children to South Dakota’s newly-elected Republican Governor, Dennis Daugaard:

With multiple campuses and emergency centers, Children’s Home provides services for up to 2,000 children a year. It’s now one of the largest nonprofits in the state. But it wasn’t always.

Ten years ago, this group was in financial trouble. For several years, tax records show, it was losing money. Then in 2002, a former banker named Dennis Daugaard joined the team. He became the group’s chief operating officer. A year later, he was promoted to executive director. And things began to change.

The money the group was getting from the state doubled under his leadership. Children’s Home grew financially to seven times its size. It added two new facilities.

So Daugaard did a great job. In most circles, this is considered commendable.

The group paid Daugaard $115,000 a year. But that wasn’t his only job. He was also the state’s lieutenant governor — and a rising star in state politics.

The seven years Daugaard spent at Children’s Home — and his ability to turn the place around — were prominent features of his successful 2010 bid for governor.

NPR claims that being Lieutenant Governor at the same time when he ran Children’s Home represented a conflict of interest:

It could be that Children’s Home was the best organization for the job, at the best price for all those contracts it got.

But it would be difficult for tax payers to know. In just about every case, the group did not compete for the contracts or bid against any other organization. For almost seven years, until this year, Daugaard’s colleagues in state government just chose the organization and sent it money — more than $50 million in all.

“It’s a massive conflict of interest,” says Melanie Sloan, executive director of the Washington, D.C.-based Citizens for Responsibility and Ethics in Washington, adding that any organization run by a state’s top elected official would have undue power in that state.

“When you’re lieutenant governor, people are anxious to curry favor with you,” she says.

Three points about this charge. First, NPR fails to note a basic fact–a wonderful fact, really–about South Dakota: being lieutenant governor is a part-time job. As of 2010, the state’s lieutenant governor earned a modest $17,699. This is, in part, because the lieutenant governor has no duties except during the two months each year when the legislature is in session. Thus, all lieutenant governors have outside, full-time jobs, as Daugaard did.

Second, the fact that Children’s Home got contracts to care for South Dakota children without having to bid against other organizations means nothing. States and other governmental units constantly enter into contracts with providers of goods and services. Whether a competitive bidding process is required as to a particular contract is a matter of state law; usually, it is not. Whether no-bid contracts are somehow scandalous depends entirely on the political affiliation of the administration currently in power and the political biases of a particular reporter, like Laura Sullivan.

Third, NPR’s statement that “Daugaard’s colleagues in state government just chose the organization and sent it money” is misleading at best. As a part-time, two months out of the year lieutenant governor, Daugaard did not supervise any state personnel, and had no authority over decisions made by Department of Social Services employees. The Governor’s office released a statement before NPR’s series aired. It stated in part:

DSS has had contracts with Children’s Home Society going back to 1978, when it was first licensed as a specialized group treatment home. Currently, Children’s Home Society is licensed as a psychiatric residential treatment facility (PRTF) for children aged 4 to 13. …

There are 11 PRTF’s in South Dakota that contract with DSS, and three of these are operated by Children’s Home Society. Any program that meets state and federal licensure criteria as a PRTF can provide services to DSS and receive a state contract that provides for uniform reimbursement methods based on the number of children served for DSS. This is not a case where contractors “compete” against each other for contracts and is consistent with laws reviewed and passed as recently as 2010.
Although Governor Daugaard cares deeply about Children’s Home Society, his plan to balance the state budget actually cut reimbursement rates to all PRTF contractors, including Children’s Home Society, by 4.5 percent.

In her report, Sullivan acknowledged and referred to the governor’s statement, but failed to note the fact that his budget cut reimbursement to Children’s Home.

Apart from her facile charges of conflict of interest, Sullivan’s main complaint is that some Indian children are placed in Children’s Home rather than with relatives:

Children’s Home has won many state accolades for its work with children. But that doesn’t mean much to Suzanne Crow or her granddaughter Brianna, who spent three years there. …

She didn’t want Brianna to grow up like she did, not knowing who she was, not knowing that someone in the world loved her. It took a court order for the state to send Brianna home to her stepfather.

“I didn’t care what it took,” Crow says. “I battled with them.”

State records show South Dakota paid Children’s Home almost $50,000 over three years to care for Brianna.

But across the state, grandmothers, aunts and uncles, family and tribal members would have cared for Brianna — and hundreds of other Native American children like her. They would have done so for free, keeping them close to their tribes and culture like federal law intended.

Perhaps so. But Children’s Home isn’t just foster care, it is a licensed psychiatric residential treatment facility. State employees are barred by privacy laws from commenting on particular cases, but it seems obvious that Brianna Crow needed more than a room in a relative’s house. But that question, NPR never addressed.

There is a painful but important story to be told about South Dakota’s Indian children. But that story isn’t a “scandal” about the Department of Social Services, or about an excellent treatment facility like Children’s Home. It is a much more difficult story, one that NPR won’t touch with a stick. That will be the subject of my next post in this series.