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Gear Up, Westerhuis and Phelps Role in New Government Report

GEAR Up Scandal

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A new report from the Us Department of Justice indicates over 1.3 million dollars in federal grant money was used in unallowable costs on the Lower Brule Reservation.

In our exclusive interview with Arvind Ganesan from the Washington DC Watchdog organization Human Rights Watch, a major concern is also tied to a Wall street firm, Westrock, which went defunct in about a year of start up, leaving a cold trail of 20 million dollars that was intended for reservation programs.

Ganesan says although many of the questionable practices are direct from federal money to the reservation, two familiar names from the State of South Dakota are also a part of the flow of money: Scott Westerhuis and Stacey Phelps and their subsidiary of Mid Central Educational Cooperative, The American Institute of Indian Innovation (AIII):

There have been several million dollars diverted out of school funding at Lower Brule and as a result they had to go into restructuring which is a federal requirement when you have really low school performance.  And so they hired AIII Stacey Phelps, which at the time was the head of AIII, and Scott Westerhuis was the COO.  So they (Lower Brule) brought in AIII to manage Lower Brule schools and that had been going on for about two years.

According to Ganesan, the chairman of the Tribal Council, Michael Jandreau, and his ruling majority have held power for more than 30 years. Ganesan says the financial dealings were undisclosed while education, safe water and other programs that were to be financed through grant money clearly suffered.

Jandreau was also a founding member of Mid Central Educational Cooperative.  He died in April 2015 amid allegations of misconduct.

Three new council members were elected on a platform of transparency.  The council abruptly stopped all meetings following the election of the new members.  Additional investigations are believed to be underway with the Inspector General and IRS.






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