Divisions of the state Attorney General's Office are located in a leased building on Burlington Drive in Bismarck. The renovation of the building has been under scrutiny by state lawmakers. (Photo by Michael Achterling/North Dakota Monitor)
By: Mary Steurer
BISMARCK, N.D. (North Dakota Monitor) – The owner of a south Bismarck property leased to the Attorney General’s Office will pay the state over $14,000 to settle financial discrepancies related to a building project spearheaded by Attorney General Wayne Stenehjem’s administration.
The payment came up Tuesday during a meeting of the Legislative Audit and Fiscal Review Committee, which asked for additional information about the building project during its August meeting.
The Attorney General’s Office selected the Burlington Drive building around 2019 to become office space for several agency divisions. The building became controversial in part because of Rep. Jason Dockter’s role as a co-owner. The Bismarck Republican was later convicted of a conflict of interest misdemeanor and found to have committed three ethics violations.
After Stenehjem’s death in 2022, incoming Attorney General Drew Wrigley alerted state officials to concerns about the project’s finances. Despite a limited review by the state auditor and an outside investigation, the Ethics Commission in a June report said there are still unanswered questions about the building deal.
The Attorney General’s Office disputes the Ethics Commission’s report and told lawmakers in an August meeting the agency has long considered the project settled. However, an attorney for building owner Stealth Properties LLC at the time said he wasn’t aware the office considered the project reconciled.
Due to discrepancies between the Attorney General’s Office and Stealth Properties’ records, the state concluded it had overpaid Stealth an estimated $14,600 related to lease payments. Stealth calculated it had already fully paid the state, however.
While Chief Deputy Attorney General Claire Ness in a Nov. 4 memo said the Attorney General’s Office was willing to give up pursuing the $14,600 to avoid litigation, an attorney representing Stealth Properties on Tuesday said the agency and Stealth had since met to work the issue out.
Stealth agreed to pay the money so that the parties could move on, the attorney, Monte Rogneby, said.
“Stealth was uncomfortable with the public record being that there’s some disagreement between the Attorney General’s Office and Stealth,” Rogneby told lawmakers.
The Attorney General’s Office years ago ordered extensive renovations to the Burlington Drive property, which it initially decided to pay during the 2019-2021 biennium based on cost estimates, Rogneby said.
“Everybody understood that it was an estimate, and when the building was done, there would have to be a reconciliation,” he said.
The remodeling cost $1.7 million more than the parties had initially anticipated. The Attorney General’s Office dipped into several funding sources from within its budget to cover about $1.3 million of those additional costs, according to Ness’s Nov. 4 memo. It paid the other $400,000 by agreeing to pay a larger monthly rent to Stealth.
After learning that the building project exceeded its initial cost estimate, Wrigley informed the Legislative Audit and Fiscal Review Committee.
That led to a review by State Auditor Josh Gallion and a third-party investigation by the Montana Division of Criminal Investigation. The Montana investigator said his probe was limited by a lack of subpoena power. Mountrail County State’s Attorney Wade Enget then reviewed the Montana report, but said questions about the building project were beyond the scope of his inquiry and suggested additional investigation.
Rogneby said that the State Auditor’s Office’s report was based on incomplete financial records. He said he later provided additional records to the Attorney General’s Office and Legislative Audit and Fiscal Review Committee, including invoices, that ultimately allowed the parties to settle the construction costs.
The parties discovered the Attorney General’s Office had overpaid. Ness’s Nov. 4 memo says the Attorney General’s Office recovered more than $530,000 from Stealth.
Sen. Kathy Hogan, D-Fargo, asked during the committee meeting if the North Dakota Ethics Commission’s investigation had access to the additional records Rogneby referred to. She said maybe those records could answer the remaining financial questions the Ethics Commission raised in its June report.
But Pat Monson, a retired attorney who was hired by the North Dakota Ethics Commission to investigate Dockter, said the commission did have access to the records at the time of its investigation.
“We had all the documents,” Monson, who was a trial attorney for nearly 50 years, said. “It was just that the documents didn’t necessarily support the numbers.”
She said the lack of documentation raises doubts about how taxpayer money was spent.
Ness said during the meeting the Attorney General’s Office did not pay Stealth any money that was not backed up by an invoice.
Lawmakers during the August meeting asked the Attorney General’s Office for a written agreement between the agency and Stealth showing both parties consider the project reconciled.
Ness said the agency has email correspondence with Stealth showing the matter is settled and a legal memorandum on the reconciliation signed by both parties is not necessary.
“A reconciliation is not a settlement agreement, so that’s just not going to exist,” Ness said.
The committee on Tuesday did not take further action. Several lawmakers said the matter had been thoroughly investigated and urged the committee to move on.
“There’s no ‘there’ there anymore,” said Rep. Mike Nathe, R-Bismarck. “There was in the beginning, but there’s not now.”
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