BY STU WHITNEY
South Dakota News Watch
The leader of South Dakota’s primary refugee resettlement program has condemned online attacks by tech billionaire Elon Musk regarding the legality of the organization’s federal funding.
Rebecca Kiesow-Knudsen, president and CEO of Lutheran Social Services of South Dakota, said her group became aware of social media messages from Musk and former U.S. national security adviser Michael Flynn this past weekend “falsely claiming that Lutheran organizations, including ours, have illegally received federal payments and engaged in money laundering.”
Kiesow-Knudsen added in her statement to News Watch that the messages “indicated an intention to defund our organization as a result. These accusations are completely baseless and inaccurate.”
“Our work is carried out through legally awarded contracts and grants with local, state, and federal agencies that have entrusted us with these essential services,” she wrote. “We are deeply concerned by any effort to misrepresent our work and jeopardize the funding that enables us to fulfill our mission.”
LSS helps resettle immigrants and refugees through its Center for New Americans. It’s an affiliate of Global Refuge, a nonprofit organization formerly known as Lutheran Immigration and Refugee Service.
The organization said it helped resettle 206 refugees in South Dakota in fiscal year 2023, many from war-torn countries such as the Congo, Ethiopia and Sudan.
LSS became a DOGE target
LSS was among many South Dakota nonprofits on the defensive last week when Trump’s administration unveiled a plan to halt federal grants and loans and issued a temporary freeze on payments.
That executive action is currently being litigated in federal court, with a judge Monday extending a temporary block on the funding freeze.
Musk, meanwhile, has kept organizations on edge with his stated intent to cut billions of dollars in federal spending through his Department of Government Efficiency (DOGE).
Musk and his team gained access to sensitive Department of Treasury data payment systems on Saturday. On Sunday, Flynn posted a screenshot on the X social media site listing payments to Lutheran-based nonprofits involved in immigrant and refugee resettlement, characterizing the process without evidence as “money laundering.”
The screenshot showed LSS of South Dakota receiving payments of $934,073 on Dec. 26 and $487,769 on Jan. 16 from the Department of Health and Human Services.
Flynn resigned from the first Trump administration in 2017 and later pleaded guilty to lying to the FBI about his contacts with the Russian ambassador to the United States. He received a pardon from Trump in 2020.
Musk, who owns X, reposted Flynn’s message to his 216 million followers and added that “the DOGE team is rapidly shutting down these illegal payments.”
Kiesow-Knudsen told News Watch that Congress appropriated the money. She added that “defunding legal, government-awarded grants and contracts will have significant consequences, limiting our ability to provide vital services to those in need.”
LSS of South Dakota’s most recent financial reports show it with net assets of $21 million following fiscal year 2023, of which $14.9 million was listed as property and equipment. The organization spent $26.1 million on program expenses in fiscal year 2023 and received $19.3 million in fees and public grants that year.
Krish O’Mara Vignarajah, president and CEO of Global Refuge, the Baltimore-based organization that oversees Lutheran-based refugee resettlement programs, condemned “the false accusations lodged against our humanitarian work.”
LSS of South Dakota assumed oversight of state refugee resettlement in 2000 and has offices in Sioux Falls, Huron, Rapid City and Yankton. It also provides services such as behavioral health care, financial counseling, mentoring, psychiatric residential treatment for youth, shelter care and disaster response.
Also shown on the Flynn/Musk screenshot was Lutheran Family Services of Nebraska, an Omaha-based organization that provided News Watch with a statement that read in part:
“To allegations that we are somehow ‘money laundering,’ please know that we are highly audited, accredited, and endorsed by the Better Business Bureau and Charity Navigator. Our financial reports are available on our website. We were founded by Lutheran pastors, but we are not an evangelical organization. We are not a church. We do not proselytize. We simply serve.”
Small but growing foreign-born population
According to previous News Watch reporting, South Dakota’s increase of foreign-born population over the past 12 years exceeded the national average by 3 times, based on U.S. Census Bureau data.
The state’s population of people born overseas grew by 45.5% between 2010 and 2022, or 10,000 people, compared to 15.6% across the entire United States.
Despite those increases, South Dakota still has the fifth-lowest share of foreign-born residents in the country. Out of South Dakota’s estimated 910,000 residents, nearly 32,000, or 3.5%, are from outside of the United States.
Before 2000, the largest number of people came to South Dakota from Latin America, which was closely followed by Asia and then Europe. Since 2000, more people have been moving to South Dakota from Asia and Africa, moving Latin America to third place.
In 2018, according to an American Immigration Council, most foreign-born residents in South Dakota were from Guatemala, the Philippines, Mexico, Sudan and Ethiopia.
Households led by foreign-born residents paid $137.7 million in federal, state and local taxes in 2018, the same report said.
This story was produced by South Dakota News Watch, an independent, nonprofit organization. Read more stories and donate at sdnewswatch.org and sign up for an email every few days to get stories as soon as they’re published. Contact Stu Whitney at [email protected].