A legislative leadership committee is green-lighting two subpoenas for Department of Revenue leaders related to recent vehicle titling scandals.
The move comes after lawmakers say they got inadequate answers from Department of Revenue Secretary Michael Houdyshell last week.
Legislative audit committee members say they felt Houdyshell refused to answer their questions behind closed doors. The questions centered around former state employees charged in a fake vehicle-titling scheme to secure loans.
The group is tasked with reviewing fiscal affairs of state departments.
Attorney General Marty Jackley announced the charges earlier this month. He also advised Houdyshell, who is a lawyer, about ethics rules that restrict attorneys from providing “extrajudicial comment,” which might affect a defendant’s right to a fair trial.
Enter the subpoenas, which GOAC approved issuing last week.
State Senator David Wheeler, R-Huron, said they’re taking the extra step to compel Houdyshell and the director of Motor Vehicle Division to testify about new internal controls to detect fraud.
“In my belief, Sec. Houdyshell was trying to respond in the sense that they thought they could. They’re acting on the advice of their attorneys at this point,” Wheeler said. “I agree that… to some degree we’re all on the same team, here, but they feel that they’re unable to answer our questions and that why we have to pursue this process.”
Wheeler said the state has received a notice a bank may pursue litigation against the state because of the title issues and money the bank lost.
The executive board committee approved the subpoenas unanimously on Tuesday morning. Representative Will Mortenson, R-Fort Pierre, said he fails to see how the ethics rules apply behind closed doors.
“It certainly constrains the Attorney General. It seems not to have prevented him from doing a number of press conferences on this topic,” Mortenson said. “It strains me to understand how it would constrain the Department of Revenue from providing information in a confidential executive session setting. That advice has led us here to this pretty extreme measure of having to issue this subpoena. I think it’s warranted, given that they were acting on that advice.”
Shortly after, Attorney General Jackley released a statement, saying the ethical rules allow him to make statements necessary to inform the public. Jackley says he will assign separate attorneys general to assist the legislature and revenue department during the closed hearings.
"It is further my opinion that the Legislature can seek general process information that will assist it in its oversight functions. It is an important oversight, and I trust that the lawyers involved can formulate questions on the process that will not affect any of the defendants’ right to a fair trial,” said Jackley in an emailed statement.
