SIOUX FALLS, S.D. (AP) — South Dakota lawmakers will be taking a look at a state agency that has been at the center of questions about whether Gov. Kristi Noem used her influence to aid her daughter's application for a real estate appraiser license.
At first glance, the first item of business for the Legislature's Government Operations and Audit Committee on Thursday appears routine: “Department of Labor and Regulation to discuss the Appraiser Certification Program.”
But it could have a big impact for the Republican governor. She has come under scrutiny after The Associated Press reported that she held a meeting in her office last year that included her daughter, Kassidy Peters, and the director of the Appraiser Certification Program, which had moved days earlier to deny Peters’ application for a license. Peters received her certification four months later.
Here’s what to know about the committee's meeting:
WHO WILL BE SPEAKING?
Lawmakers have carved out a few hours in a packed schedule to hear from four people.
One is the Appraiser Certification Program’s former director, Sherry Bren. She was called into the July 2020 meeting in the governor's office and was pressured to retire shortly after Peters received her license that November.
Another official slated to speak is Secretary of Labor and Regulation Marcia Hultman. She was also in the meeting and later pressured Bren to retire. Hultman has defended her actions by saying there have been positive changes at the agency since Bren left.
Lawmakers have also called the president of the state's professional appraiser association, Sandra Gresh. She has raised concerns about the new direction of the state program.
The director of the state's Office of Risk Management, Craig Ambach, also is expected to appear. His office helped negotiate a $200,000 payment to Bren for her to retire and withdraw an age discrimination complaint. Both Bren and Hultman are bound by a clause in that settlement that bans them from disparaging each other.
WHAT EXACTLY HAPPENED AT THE MEETING IN NOEM'S OFFICE?
It is not entirely clear. The governor hasn't answered detailed questions about the meeting. Bren told the AP it covered the procedures for appraiser certification and that she was presented with a letter from Peters’ supervisor that criticized the agency’s decision to deny the license.
Noem has said she didn't ask for special treatment for her daughter. She has cast the episode as yet another way she has “cut the red tape" to solve a shortage of appraisers and smooth the homebuying process.
In a YouTube video responding to the AP's report, Noem pointed out that Bren had been in her position for decades, and she charged that the system “was designed to benefit those who were already certified and to keep others out.”
IS THERE A SHORTAGE OF APPRAISERS?
Yes. Industry experts have long said that's a problem, especially in rural states. In South Dakota, many experienced appraisers are nearing retirement age.
However, the governor's ability to “streamline” requirements for a license would be limited because they are mostly set at the federal level.
As governor, Noem has worked to ease licensing requirements for an array of professions. She said she had been working on appraiser regulations for years.
Asked for examples of that work prior to last year, her spokesman Ian Fury pointed out that Noem, during her eight years in Congress, twice signed onto GOP-sponsored bills that would have, among other financial reforms, adjusted federal appraiser regulations.
HOW CAN THE SHORTAGE BE SOLVED?
Since Bren's departure, Noem's administration has moved to waive certification requirements that go beyond the federal standards, such as an exam for entry-level appraisers.
But the leadership of the Professional Appraisers Association of South Dakota has raised concerns about those moves. The group says the biggest barrier to becoming an appraiser is a lack of supervisors who can train new appraisers.
Before Bren left her job, she was working to launch a first-of-its-kind program that would allow appraiser trainees to take hands-on courses and avoid the traditional apprenticeship model that has become a bottleneck. Bren helped the state win a $120,000 annual federal grant and later testified in the Legislature in support of a bill to create the training program. Noem signed it into law this year.
WHAT WILL THE COMMITTEE DO?
It's not clear. Republican lawmakers said they will start by asking about the state agency and why there are difficulties to becoming an appraiser. But they also acknowledged that the meeting was an opportunity to question the governor's conduct. Just two Democrats sit on the 10-person committee.
If lawmakers are satisfied, they could move on from the issue.
They also could decide to delve deeper. The committee has the power to subpoena witnesses and records, but that would require approval from the Executive Board, a ranking committee of top legislators.
Kathleen Clark, a law professor who specializes in government ethics at Washington University in St. Louis, said she would not be satisfied with the governor's explanation that she was simply trying to “cut the red tape.”
"It is conceivable that the agency processes needed improvement," she said. “But the presence of the daughter and the timing of the meeting suggest that this was not a meeting aimed at improving processes in general, but instead aimed at pressuring the agency to change its mind.”
Stephen Groves, The Associated Press