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No criminal charges for North Dakota commerce department officials after critical audit

State Auditor Josh Gallion published an audit of the department last fall that asserted it charged more than $850,000 to the wrong two-year budget cycle and improperly classified workers on the state's re-branding effort and new "Be Legendary" logo as independent contractors instead of temporary employees.

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Michelle Kommer is the commissioner of the North Dakota Department of Commerce. File photo
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BISMARCK — Officials from the North Dakota Department of Commerce will not face criminal charges related to an audit that accused the department of mismanaging public money.

State Auditor Josh Gallion published an audit of the department last fall that asserted it charged more than $850,000 to the wrong two-year budget cycle and improperly classified workers on the state's re-branding effort and new "Be Legendary" logo as independent contractors instead of temporary employees.

As required by state law, the possible violations became the subject of an investigation by Attorney General Wayne Stenehjem, however Stenehjem asked a third-party investigator from the South Dakota Bureau of Investigation to take on the task.

After reviewing South Dakota's investigation, Burleigh County State's Attorney Julie Lawyer wrote in a letter to Attorney General Wayne Stenehjem on Monday, April 21, that no criminal charges should be filed against department officials.

Commerce Commissioner Michelle Kommer said at a November meeting of the Legislative Audit and Fiscal Review Committee that the audit's findings and ensuing investigation had put undue stress on her and other employees of the department. She said the department made "an honest mistake" in charging funds to the wrong biennium but that it should not rise to the level of criminality. Kommer said then she had hired a personal lawyer in case charges were filed.

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Several lawmakers on the committee, including Bismarck Republican Rep. Mike Nathe, criticized Gallion, saying he had made too much out of the supposed violations and acted outside of his role in determining that they were potential criminal acts.

Gallion re-election announcement
State Auditor Josh Gallion. Jeremy Turley / Forum News Service

Gallion, also a Republican, said at the time his office does not levy criminal accusations and it was his legal obligation to refer any possible violations to the attorney general.

Gov. Doug Burgum, who appointed Kommer to the cabinet position in 2018, said Tuesday "hyped-up allegations" have "created an environment of fear" for state employees. Burgum added that he hoped the state Legislature would clarify laws in 2021 so that the committee, rather than the attorney general, could decide if violations found in audits should become the sources of criminal investigations.

Jeremy Turley is a Bismarck-based reporter for Forum News Service, which provides news coverage to publications owned by Forum Communications Company.
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