Joshua Haiar/South Dakota Searchlight
Some state employees who want to go to work for companies doing business with the state will have to wait longer if a new bill becomes law.
Republican Sen. Tim Reed, of Brookings, filed a bill Thursday that would require former state officials or employees to wait for two years before going to work for any entity that was the “beneficiary” of a contract the officials or employees approved, awarded or administered, if the contract value was more than $1 million. Existing state law requires a one-year waiting period for all such officials or employees.
“It’s a better cooling-off period,” Reed said. “And we, as legislators, have to wait two years before we can be hired to lobby.”
Reed’s bill is a response to South Dakota Searchlight reporting about Steve Westra, who was the commissioner of the Governor’s Office of Economic Development during the administration of Republican former Gov. Kristi Noem.
Westra left his state job in 2023 and took a job with CJ Schwan’s a year later. While Westra worked for state government, he signed the first pledge of state aid benefiting the company. That aid now totals $69 million of grants, loans and tax rebates for the company’s $550 million, 650-employee food production plant under construction in northern Sioux Falls.
Westra has not responded to Searchlight messages. CJ Schwan’s said in an email last year that Westra “is currently employed by CJ Schwan’s to advise on business development and government relations matters. He was hired after he left state government. At no time did anyone from the company discuss potential employment with Mr. Westra while he was involved with state government.”
Reed formerly served as CEO of the Brookings Economic Development Corp.
“I’ve been involved with economic development for quite a while, and after finding out about this, it made me ask, ‘Should we be doing something?’” Reed said.
The CJ Schwan’s project will be good for the economy, Reed said, but “the optics” of Westra’s transition were “absolutely terrible.”
Reed’s bill would apply to officials who recommended approval of a contract or supervise someone who makes the recommendation, he said. He has not heard an official response from the governor’s office, but said he’s gathering bipartisan lawmaker support.
Reed’s bill is part of a broader discussion this legislative session about economic development in the state, including uses of the governor’s Future Fund, which is the source of about half of the state aid benefiting CJ Schwan’s. Much of the Future Fund aid was approved during the Noem administration.
The governor has exclusive control of the Future Fund, which state law requires to be used “for purposes related to research and economic development for the state.” Sen. Taffy Howard, R-Rapid City, has introduced a bill to put some restrictions on the fund, including a requirement that the state Board of Economic Development consider applications for funding.
Meanwhile, Gov. Larry Rhoden responded Thursday with an executive order outlining his self-imposed priorities and guidelines for using the fund.
“I think it’s just to put in writing and give the legislators a comfort level that this is what we’re looking at when we’re making these decisions on Future Fund projects,” Rhoden said during a press conference.