South Dakota report: Noem's daughter got special treatment

FILE - South Dakota Gov. Kristi Noem speaks during the Family Leadership Summit, Friday, July 16, 2021, in Des Moines, Iowa. A board that investigates complaints against South Dakota officials is scheduled to take up a pair of ethics complaints against Gov. Kristi Noem in May 2022, including that she improperly interfered with a state agency that was evaluating her daughter’s application for a real estate appraiser license. (AP Photo/Charlie Neibergall, File) (ASSOCIATED PRESS)

SIOUX FALLS, S.D. (AP) — South Dakota lawmakers on Wednesday unanimously approved a report finding that Republican Gov. Kristi Noem's daughter got preferential treatment while she was applying for a real estate appraiser's license in 2020.

The findings of last year's legislative probe, which was conducted by a Republican-controlled Government Operations and Audit Committee, repudiate Noem's insistence that her daughter, Kassidy Peters, didn't receive special treatment with her application. An Associated Press report on Noem's actions surrounding her daughter's licensure sparked the investigation.

State lawmakers on Wednesday approved the committee’s findings by a voice vote and without discussion.

Noem, who is running for reelection and is positioned for a 2024 White House bid, has repeatedly denied wrongdoing, despite holding a meeting that included Peters and key decision-makers from the agency that was evaluating her license application just days after the agency moved to deny her the license. After the meeting, Peters received another opportunity to demonstrate she could meet federal standards and was ultimately awarded the license.

The Republican governor on Wednesday stuck to her defense, saying in a statement that “Kassidy followed the same process as other applicants did to obtain her license. She did not receive preferential treatment.”

But the report says Peters received three opportunities to demonstrate to state regulators that she could meet federal standards with her appraisals, which deviated from the standard certification process that gives applicants two opportunities before their application is denied.

Even before the meeting at the governor's mansion where the third opportunity for Peters was discussed, Noem's labor secretary, Marcia Hultman, took an unusual, hands-on role that spring, the report states. After Peters failed to meet federal standards on her first try, the state's appraiser certification program entered a disposition agreement with her that allowed her to take additional training, fix errors and resubmit her work.

“Secretary Hultman changed the disposition agreement and removed the requirement for additional course training,” the report says. “This was the first time the (Department of Labor and Regulation) Secretary inserted herself into any disposition agreement.”

Peters failed to pass a work review for a second time, and lawmakers found that in July of 2020, she was sent a notice of a pending denial to her application. The report states that at that point, Peters should “have waited the required six months and reapplied.”

Instead, lawmakers found that a meeting was held at the governor's mansion a week later and the agency's director at the time, Sherry Bren, was asked to come prepared to discuss the next steps so that Peters could pass her certification.

Four months later, Peters received her license. And in the weeks after that, Bren was repeatedly pressured to retire by Noem's labor secretary. She eventually filed an age discrimination complaint and left her job in March of 2021 after receiving a $200,000 settlement agreement with the state.

Bren told the committee last year that she had been forced to retire.

The governor has implied that Bren, who directed the appraiser certification program since its inception in the 1990s, was getting in the way of new appraisers getting their certification. But the Legislature's report found that Bren did just the opposite, stating that she worked to “encourage efficiency and support changes that would ease entry into the appraisal industry.”

Amid scrutiny of her licensure, Peters has surrendered her license and quit her appraisal work. Last year, she wrote in a letter to Hultman that she was angry that her professional reputation was damaged.

The five-page report doesn't say whether Noem’s actions were appropriate, and Noem claimed that lawmakers found no wrongdoing. However, government ethics experts have said Noem inappropriately interfered to help her daughter. Also, three of the five House members on the Government Operations and Audit Committee earlier this year voted in favor of a failed House resolution that sought to label her actions “unacceptable." One Republican on the committee, Rep. Sue Peterson, was excused from the House vote and another voted against it.

The governor also argued anew that she was trying to “fix the broken appraiser program in South Dakota,” claiming a decade of action as a congresswoman and governor. During her eight years in Congress, Noem twice joined over 100 other Republicans in signing on to bills that would have, among other financial reforms, adjusted federal appraiser regulations.

While lawmakers have no plans to pursue their probe further, the state's Government Accountability Board is considering whether to investigate Noem's actions.