By Todd Epp, SDBA
PIERRE, S.D. (SDBA) — South Dakota’s struggle with financial oversight spans generations, from territorial-era embezzlement to modern credit card controversies.
It has prompted new legislation strengthening accountability in the $7.3 billion state government.
The pattern began with the 1870s “Indian Ring” scandal when contractors and officials embezzled funds meant for Native Americans. State Treasurer W.W. Taylor continued the tradition in 1895, fleeing to Mexico with $367,020 — nearly 20% of the state’s budget.
In the early 20th century, Governor Peter Norbeck’s farm loan program collapsed amid poor management and the 1920s agricultural depression, ultimately costing taxpayers $57 million.
Recent decades brought fresh controversies. Governor Mike Rounds’ administration faced questions about the EB-5 foreign investment program after program administrator Richard Benda’s 2013 suicide amid a state investigation. Rounds consistently denied involvement, emphasizing EB-5 was a federal program that brought “$600 million in investment” to South Dakota.
Rounds also faced scrutiny over state airplane usage, which he defended as official business. South Dakota voters later approved ballot measures increasing transparency requirements for state aircraft.
Five former state employees have been charged since July 2024. Most prominent is Lonna Carroll, 68, who is facing trial in April for allegedly stealing $1.8 million from Child Protection Services between 2010 and 2023.
Former Governor Kristi Noem’s administration also drew attention when records showed approximately $650,000 in credit card charges. Noem’s legal team disputes this characterization, claiming that Noem spent only $2,000 personally, with the remainder being spent on staff expenditures for state business.
In response, lawmakers passed Attorney General Marty Jackley’s four-bill package in March 2025. The legislation expands the state auditor’s authority, enhances internal controls, establishes mandatory reporting requirements, and protects whistleblowers.
“Protecting taxpayer dollars and restoring public trust in government should be given high priority,” Jackley said when introducing the legislation.
As these measures take effect, the question remains whether South Dakota can finally break a financial oversight cycle that has persisted since its territorial days or if the state’s motto — “Under God the People Rule” — will remain unfulfilled in matters of public finance.
