CASS COUNTY GOVERNMENT ence State’s Attorney Birch P. Burdick Assistant State's Attorneys: ‘Tray. Peters Leah J Viste Reid A. Brady Kara Schmitz Olson Kimberlee J. Hegvik Ryan J. Younggren Renata J Seer Tanya Johnson Martinez Katherine M, Naumann Joshua J. Triser ‘Tracy E. Hines SheraLynn Ternes Derek K. Steiner Robert C, Valle Victim/ Witness Coordinators: Brenda Olson Wray Debbie Tibiatowski Lori Lawson Check Division/ Restitution: Charlotte Bversviek Casidy Heilman Box 2806 211 Ninth Street South, Fargo, North Dakota 58108 PH: 701-241-5850 Fax: 7012415838 October 29, 2019 RE: NDSCS Performance Audit Report No, NP-017-18 ‘To Whom it May Concern: ‘A referral was made by the North Dakota State Auditor to the Cass County State’s Attorney inguiring whether NDSCS President John Richman and/or Vice Presidents Tony Grindberg and Dennis Gladen committed the erimes of Obstructing or misleading auditor in violation of NDCC § 54-10-23 and/or violated NDCC § 12.1-13-03, Public servant’s interest in public contracts, NDSCS was audited in late 2018 and early 2019. One area of concem was the TrainND marketing contract negotiations between NDSCS and Flint Group, a Fargo marketing company. The Auditor asked NDSCS Vice President of ‘Administrative Affairs, Dennis Gladen, for any emails between NDSCS and Flint Group. Mr, Gladen told the auditor no emails existed and asserted NDSCS President John Richman personally handled the negotiations with Flint Group. Mr. Richman buffered NDSCS Vice President of Workforce Affairs, Tony Grindberg from any actual or perceived conflict of interest with Flint Group as Mr. Grindberg’s wife is Flint Group’s CFO. Both Mr, Richman and Mr. Grindberg were ce’d in this reply to the auditor’s offi NDSCS" emails were obtained from the North Dakota University System showing Mr. Grindberg had in fact corresponded with Flint Group regarding the marketing contract. Mr, Gladen later stated through his lawyer that his misrepresentations to the auditor were unintentional. Mr. Gladen asserted that he didn’t find out that Mr. Grindberg had emailed employees at Flint Group until the audit was released, NDSCS" emails further show President Richman was aware of Mr. Grindberg’s correspondence with Flint Group. North Dakota Bureau of Criminal Investigations (BCI) Special Agent Kelly Wimer investigated this matter. Agent Wimer requested individual interviews with Mr. Richman, Mr. Grindberg and Mr. Gladen regarding the Flint Group negotiations, All parties refused individual interviews. Their attorneys suggested an unconventional group interview, with everyone in the room at the same time, Ultimately however, the parties rescinded this request and refused any interviews.At the close of the investigation, the Cass County State’s Attomey’s Office reviewed the emails, attomeys’ correspondence, public responses and Agent Wimer’s reports. ‘The essential elements are: NDCC § 54-10-23 Obstructing or misleading auditor 1, Willfully, 2. Obstructs or misleads the auditor or 3. Hinders a thorough examination by the auditor. NDCC § 12.1-13-03 Public servant's interest in public contracts 1 ‘A public servant, 2. Who is officially authorized to contract, 3. Voluntarily becomes individually interested, 4, Directly or indirectly in a contract. The State’s Attorney applies the criminal standard of beyond a reasonable doubt to the weight of the evidence. Others reviewing this matter such as the Auditor, the legislature and civil courts use different standards or policies and weight them with lesser burdens of proof. The State’s Attomey expresses no opinion as to those reviews. In 2018, NDSCS paid Flint Group $39,500 in consulting fees. ‘The fees paid to Flint were not a direct benefit to Mr. Grindberg, Mr, Gladen nor Mr. Richman, One could argue that Mr. Grindberg was interested in seeing his wife's company succeed and her interest is indirectly his. But, to the State’s knowledge, the discussions with Flint weren’t conditioned on a commission or bonus to his wife. Flint Group is a company NDSCS has done business with in the past. It is common in a community such as Fargo to cross paths with entities that have some connection, however tenuous, to people we know. In the case of public entities, the important consideration is disclosure of such relationships. The parties have expressed publicly and through their attorneys that they were aware Mr. Grindberg’s wife was Flint Group’s CFO, This relationship in and of itself doesn’t bar NDSCS from doing business with Flint. While NDSCS disclosure policies and/or those of the State Board of Higher Education may have required a written notice, NDCC 12.1-13-03 was not violated, The North Dakota University System Chancellor Dr. Mark Hagerott and President Richman acknowledged the audit’s value in highlighting the need for clear disclosure. An important function of an audit is to bring needed improvements to the attention of decision makers and leaders. In this instance, however, Mr. Grindberg did not personally benefit from NDSCS" business relationship with Flint Group. Any appearance of indirect interest to him via the contract’s unsubstantiated benefit to his wife is not a violation of criminal law.‘We next turn to obstructing or misleading the auditor. Here we examined the responses to the auditor's request for emails between NDSCS and Flint Group. First, Mr. Gladen claims his mistepresentations were not intentional. His attomey stated that Mr, Gladen did not become aware of the existence of any email correspondence until after the audit, Mr, Richman and Mr. Grindberg were both co’d in Mr. Gladen’s original response to the auditor. Assuming Mr. Grindberg and Mr. Richman read their emails, they should’ve seen Mr. Gladen’s inaccurate response. One can imagine that conversations might have occurred between Gladen, Grindberg and Richman to ensure the accuracy or, in the alternative, to issue a correction, ‘The emails show there were communications between Mr. Grindberg and Flint Group and Mr, Richman had direct knowledge of these conversations. Mr. Gladen’s statement that he did not inform himself about the existence the emails before he responded to the auditor may be of concem. But in and of itself, it does not prove willful obstruction or willful misleading of the auditor beyond a reasonable doubt. ‘As to Mr. Richman and Mr. Grindberg, we review their inaction in regards to the misinformation distributed to the auditor. The emails show communications between Mr. Grindberg and Flint Group with Mr. Richman acknowledging these discussions. To the auditor's simple inquiry if any emails existed between NDSCS and Flint Group, Mr. Gladen responded in the negative and ce’d both Mr. Richman and Mr. Grindberg. Neither Mr. Richman nor Mr. Grindberg took any steps to correct this error before the audit was finalized. To prove a crime, however, one must show a willful act, Inaction under these circumstances does not violate the criminal statute. Therefore, the State cannot prove beyond a reasonable doubt that Mr. Richman or Mr. Grindberg willfully obstructed or mislead the auditor. Furthermore, even if one can read into the statute an affirmative duty to act, neither Mr. Richman nor Mr. Grindberg directly or indirectly benefitted from the marketing services provided by Flint Group. Any appearance of an indirect interest to Mr. Grindberg via his wife, Flint Group's CFO, is not proof of a crime beyond a reasonable doubt. No criminal charges will be filed. Sincerely, Bireh P. Burtiick State's Attorney BPB/alk