Worst Corruption Scandal in Each State
41. South Dakota
> Scandal: GEAR-UP program scandal
> Year: 2015
A scandal in South Dakota apparently led to the deaths of six people in one family, including the leading figure in the scandal. The episode centered around GEAR-UP, a federally funded program intended to inform lower-income students about higher education choices. Scott Westerhuis and his wife were business managers at Mid-Central Educational Cooperative, which had financial control of the GEAR-UP program. Westerhuis, who used third-party organizations to access GEAR-UP’s bank account to pay Mid-Central employees, eventually looted $1.4 million from the organization. The state Department of Education canceled Mid-Central’s contract with GEAR-UP. Apparently facing financial pressure, Westerhuis shot and killed his family, burned his house down, and then committed suicide.
> Scandal: Operation Tennessee Waltz
> Year: 2005
The FBI launched an investigation into claims of corruption in Tennessee in 2002. Operation Tennessee Waltz led to the arrest of five former lawmakers who collected money in exchange for backing legislation that would benefit a recycling company called E-Cycle Management. E-Cycle, though, was a bogus company set up by the FBI that recorded hours of video of lawmakers getting plied with liquor and receiving cash from undercover agents. The operation led to stricter reporting requirements for lobbyists and stringent disclosure standards for lawmakers about their sources of income.
> Scandal: Enron scandal leads to its dissolution
> Year: 2001
Enron, once the sixth-largest energy company in the world, collapsed in late 2001 because of years of accounting fraud that aimed to conceal debts and losses and inflated the company’s revenue. The debacle made Enron a synonym for corporate malfeasance and corruption. Most of the company’s executives were tried for fraud after it was revealed that Enron’s earnings had been overstated by almost $600 million. What was galling to the public was that Enron executives, apparently sensing the company’s demise, cashed out of Enron stock before the company’s collapse. Lower-level employees at Enron could not do so because of 401(k) restrictions, and many lost their savings. The scandal also claimed in 2002 long-practicing accounting firm Arthur Andersen, which had been convicted of shredding documents related to former client Enron.
> Scandal: Attorney General in bribery scheme
> Year: 2017
Former Attorney General John Swallow was charged with eight felony counts in addition to a misdemeanor. The charges ranged from accepting and requesting bribes to obstructing justice in the courtroom. At the time the charges shook the state, as another former AG, Mark Shurtleff, was charged with similar crimes. Charges against Shurtleff were dropped in 2016. As for Swallow, after four years, he was acquitted of all charges. While the case may have officially closed last year, Swallow is actively seeking reimbursement. As of Feb. 28, Swallow has sued the state in attempt to receive $1.6 million worth of legal fees he used in his defense, most of which he had to borrow from other attorneys.
> Scandal: EB-5 investment for visa program scandal
> Year: 2017
The EB-5 regional center in Vermont is no longer in existence. Last year, the federal government shut down the program — created to stimulate the economy through investment by immigrant entrepreneurs who could eventually get green cards — after two developers in the state were accused of committing fraud. Ariel Quiros and Bill Stenger misused $200 million of the $350 million raised from immigrant investors for several projects through the visa program. This mass amount of money was supposed to fund three different projects. By 2016, the 400 investors in the various unfinished projects had yet to receive their respective green cards.