Lawmakers attempt to clear up unanswered questions over attorney general building lease

BISMARCK, N.D. (North Dakota Monitor) — Financial discrepancies related to an Attorney General’s Office building project have been resolved, staff with the office said Thursday, but some lawmakers questioned why the agency hasn’t provided documentation backing that up.

A committee of lawmakers since 2022 has ordered several investigations to settle lingering questions about the project — and whether any taxpayer money is still unaccounted for.

The building was selected by former Attorney General Wayne Stenehjem’s administration around 2019 to become new office space for several agency divisions. The agency ordered extensive renovations to the property on Burlington Drive in Bismarck.

The project raised eyebrows for exceeding projected costs by at least $1.7 million, and because a state lawmaker and partial owner of the property — Rep. Jason Dockter, a Bismarck Republican — was convicted of a conflict of interest misdemeanor related to the deal.

Financial questions about the project resurfaced in a recent investigation report by the North Dakota Ethics Commission that found Dockter had violated ethics laws by voting on budget bills that included funds for the building lease.

Despite inquiries by the commission and other investigators, it remains unclear whether the Attorney General’s Office reconciled project finances with Stealth Properties, the building owner. The state initially paid Stealth too much money for the renovation, but both parties arrived at different calculations for how much the state had overpaid. The Attorney General’s Office has recovered about $525,000, but a report by a Montana investigator indicates the Attorney General’s Office is owed an additional $14,600.

Laura Balliet, an attorney for the Attorney General’s Office, told lawmakers on Thursday that the agency ultimately decided not to pursue the additional money.

“We determined internally that it wasn’t worth the time and effort and resources to continue to try to recover $14,000 when we have recovered $525,000,” she told the Legislative Audit and Fiscal Review Committee.

Stealth’s attorney, Monte Rogneby, told Rep. Emily O’Brien, R-Grand Forks, on Thursday morning that he and his clients were unaware that the Attorney General’s Office considered the project settled, according to an email O’Brien provided to the North Dakota Monitor.

Rogneby said in a statement to the Monitor that Stealth has provided documentation to the Attorney General’s Office of construction costs and its financial reconciliation. He said Stealth  “has not received any communication from the attorney general raising any concerns with the lease or the reconciliation of construction costs.”

Sen. Brad Bekkedahl, R-Williston, asked agency staff why they didn’t take the time to put together an agreement with Stealth that shows the finances were reconciled.

“I still would have wanted some type of documentation signed by both parties saying that there’s no longer a dispute,” he said. “It just seems really messy to me, and not very open or transparent.”

Balliet said she couldn’t speak to why the agency had not opted to do so, but that the Attorney General’s Office staff can provide documentation to lawmakers at the committee’s next meeting, scheduled for December.

Attorney General Drew Wrigley, who assumed office in 2022 after Stenehjem died in office, first brought the cost overrun to lawmakers’ attention.

That led to a review by State Auditor Josh Gallion and later an outside investigation by the Montana Division of Criminal Investigation. A Montana investigator, however, said the probe was limited by a lack of subpoena power. Mountrail County State’s Attorney Wade Enget reviewed the Montana report, but said questions about the building project were beyond the scope of his review.

The Ethics Commission’s report focused on Dockter’s conflict of interest. However, it also reiterated concerns previously discussed by lawmakers, including that all project expenditures may not have been authorized by the Legislature or the Emergency Commission.

Laura Balliet, an attorney for the North Dakota Attorney General’s Office, answers questions from lawmakers about a south Bismarck building lease that spurred years of investigations. (Mary Steurer/North Dakota Monitor)

Mary Kae Kelsch, a division director in the Attorney General’s Office, said the office’s finance team wouldn’t have made illegal expenditures. The office has appropriation authority for leases, she added.

“Was it illegal? No, but it wasn’t managed well,” Kelsch told lawmakers.

According to both Attorney General’s Office staff and Stealth representatives, there was no “cost overrun” related to the project. While the project went roughly $1.7 million over initial projections, the lease permitted the parties to go beyond that figure.

“It wasn’t really an overage,” said Kelsch. “It’s just there was no cap put on, and so the till was running, the meter was running, and no one was paying attention to the meter.”

Wrigley in a Wednesday letter to the committee said his agency has tied up all financial loose ends related to the building deal, and that the Ethics Commission’s concerns have no merit. Wrigley said in the letter he could not attend the meeting because he was out of the country Thursday.

Pat Monson, who was hired to conduct the investigation of Dockter on behalf of the Ethics Commission, said the Attorney General’s Office did not provide the commission information about the reconciliation during her probe. She said she’s not sure how the Attorney General’s Office could have reconciled the finances.

“There were so many discrepancies within the invoices and the bills and costs that were submitted by Stealth to the AG’s office,” Monson, who was a trial attorney for nearly 50 years, said. “How and when those discrepancies were overcome and agreed upon is really unclear.”

Lawmakers on Thursday considered requesting an additional review from the state auditor, but opted instead to first request the written documentation from the Attorney General’s Office.

Bekkedahl also asked the Attorney General’s Office to report to the Legislature’s Budget Section about the more than $500,000 that was returned to the state.

(Story written by Mary Steurer – North Dakota Monitor)