Rounds: No link between contracts, contributions
Posted: Tuesday, December 30, 2008
RAPID CITY, S.D. (AP) -- What some critics might try to call "pay-to-play" contracts are simply good business deals that operate separate and apart from political contributions, Gov. Mike Rounds says.
A review by the Rapid City Journal found many South Dakota companies that get contracts, often without competitive bids, also made donations to the governor.
Some of the most prominent contracts are with law firms that provide legal services to state agencies through no-bid contracts.
A Pierre law firm -- May, Adam, Gerdes & Thompson -- has a $350,000 no-bid contract to provide the state with legal services in tort cases. The firm donated $18,500 to Rounds' 2006 re-election campaign.
A former partner in the firm, Neil Fulton, donated an additional $3,000. He was named Rounds' chief of staff last year.
A Sioux Falls advertising agency, Lawrence & Schiller, has received million of dollars in no-bid state contracts during Rounds' terms while donating thousands to his campaign.
"I would hope pay-to-play is not taking place here," said Lee Breard of Pierre, a state government reform activist. "But I will let the taxpayers of South Dakota draw their own conclusions."
No-bid contracts and donations by the people who get them are legal under state law.
And in the case of Lawrence & Schiller, state tourism officials say more than 80 percent of the state contract amount is "pass-through" money that goes to buy media advertisements and promotions.
John Fiksdal, president of the Media One agency in Sioux Falls, didn't mince words.
"I'm professionally and personally offended by the no-bid contract that Lawrence & Schiller holds," Fiksdal said. "The assumption that no one else is suitable to handle this business is absurd."
Rounds, meanwhile, said he has made it clear that contracts have no connection with donations. Most of the people and firms with the state contracts are not politically active, he said.
Even if some are, they still can provide services through state contracts, Rounds said. That, he said, should include executives from Lawrence & Schiller, who have donated $12,000 to the Rounds campaign since 2003, along with $6,000 to Lt. Gov. Dennis Daugaard, who plans to run for governor in 2010.
"They're very active. And I just happen to be one of those candidates they support," Rounds said. "I don't think that means they are excluded from participating in providing service. If we started doing that, there'd be a whole lot of attorneys out there that couldn't make donations."
Scott Lawrence, president of Lawrence & Schiller, said he gladly contributed to Rounds even though he believes "a thousand dollars here and there has zero impact" on whether his firm gets state contracts.
Lawrence & Schiller worked for Sioux Falls Republican Steve Kirby, not Rounds, during the 2002 GOP primary, which Rounds won. The firm did some work for the Rounds campaign at the end of the year and picked up the tourism contract the next year. That's when the agency upped its contributions to the governor.
Lawrence & Schiller has had more than $23 million in state contracts, most with tourism on a no-bid basis since Rounds took office in 2003.
"My comment would simply be the facts," Breard told the Rapid City Journal in an e-mail. "L&S donated less than $500 to Rounds for governor in the 2002 election cycle. After L&S got the tourism contract back, they donated $12,000 plus for the 2006 election cycle and another $6,000 to the lieutenant governor."
Rounds and Rich Benda, South Dakota Tourism and State Development director, reject the pay-to-play inference.
"I've never spoken to the governor about political contributions for these guys, and he's never asked me to do anything with these contracts other than what they're doing," Benda said. "I've been in a lot of chairs where those suggestions could have been made. And I've never had anybody try to guide me that way."
Rounds said Lawrence & Schiller is tourism's ad agency because "they're very, very good at what they do," not because of donations.
"I don't worry about the political accusations like that. They're bogus as far as I'm concerned."
John Pohlman, Lawrence & Schiller vice president, said his company has gotten the contract -- and keeps it -- because of its skills and services.
"The insinuation that this contract was somehow given to us couldn't be further from the truth," Pohlman said. "We pitched and pitched and pitched over six months to be able to get the business. It was anything but a given contract.
"We play by the rules. And if the rules change, we'll play by them."
Robert Sharp, a Rapid City ad executive, said his agency has won some state contracts but that they were done under the bid process. He said he doesn't make political donations.
"There are no favors paid to us. We work hard for everything we've gotten."
Sharp said he'd like a chance at Lawrence & Schiller's no-bid contracts. But he also said he doesn't think such contracts are bought through political contributions.
"I don't believe that, and I'd hate to think that I'd have to pay to play. I just won't do it," Sharp said. "I would hate to think that's the way it is. In Illinois, maybe, but not here in South Dakota. I don't think it's true."
A review by the Rapid City Journal found many South Dakota companies that get contracts, often without competitive bids, also made donations to the governor.
Some of the most prominent contracts are with law firms that provide legal services to state agencies through no-bid contracts.
A Pierre law firm -- May, Adam, Gerdes & Thompson -- has a $350,000 no-bid contract to provide the state with legal services in tort cases. The firm donated $18,500 to Rounds' 2006 re-election campaign.
A former partner in the firm, Neil Fulton, donated an additional $3,000. He was named Rounds' chief of staff last year.
A Sioux Falls advertising agency, Lawrence & Schiller, has received million of dollars in no-bid state contracts during Rounds' terms while donating thousands to his campaign.
"I would hope pay-to-play is not taking place here," said Lee Breard of Pierre, a state government reform activist. "But I will let the taxpayers of South Dakota draw their own conclusions."
No-bid contracts and donations by the people who get them are legal under state law.
And in the case of Lawrence & Schiller, state tourism officials say more than 80 percent of the state contract amount is "pass-through" money that goes to buy media advertisements and promotions.
John Fiksdal, president of the Media One agency in Sioux Falls, didn't mince words.
"I'm professionally and personally offended by the no-bid contract that Lawrence & Schiller holds," Fiksdal said. "The assumption that no one else is suitable to handle this business is absurd."
Rounds, meanwhile, said he has made it clear that contracts have no connection with donations. Most of the people and firms with the state contracts are not politically active, he said.
Even if some are, they still can provide services through state contracts, Rounds said. That, he said, should include executives from Lawrence & Schiller, who have donated $12,000 to the Rounds campaign since 2003, along with $6,000 to Lt. Gov. Dennis Daugaard, who plans to run for governor in 2010.
"They're very active. And I just happen to be one of those candidates they support," Rounds said. "I don't think that means they are excluded from participating in providing service. If we started doing that, there'd be a whole lot of attorneys out there that couldn't make donations."
Scott Lawrence, president of Lawrence & Schiller, said he gladly contributed to Rounds even though he believes "a thousand dollars here and there has zero impact" on whether his firm gets state contracts.
Lawrence & Schiller worked for Sioux Falls Republican Steve Kirby, not Rounds, during the 2002 GOP primary, which Rounds won. The firm did some work for the Rounds campaign at the end of the year and picked up the tourism contract the next year. That's when the agency upped its contributions to the governor.
Lawrence & Schiller has had more than $23 million in state contracts, most with tourism on a no-bid basis since Rounds took office in 2003.
"My comment would simply be the facts," Breard told the Rapid City Journal in an e-mail. "L&S donated less than $500 to Rounds for governor in the 2002 election cycle. After L&S got the tourism contract back, they donated $12,000 plus for the 2006 election cycle and another $6,000 to the lieutenant governor."
Rounds and Rich Benda, South Dakota Tourism and State Development director, reject the pay-to-play inference.
"I've never spoken to the governor about political contributions for these guys, and he's never asked me to do anything with these contracts other than what they're doing," Benda said. "I've been in a lot of chairs where those suggestions could have been made. And I've never had anybody try to guide me that way."
Rounds said Lawrence & Schiller is tourism's ad agency because "they're very, very good at what they do," not because of donations.
"I don't worry about the political accusations like that. They're bogus as far as I'm concerned."
John Pohlman, Lawrence & Schiller vice president, said his company has gotten the contract -- and keeps it -- because of its skills and services.
"The insinuation that this contract was somehow given to us couldn't be further from the truth," Pohlman said. "We pitched and pitched and pitched over six months to be able to get the business. It was anything but a given contract.
"We play by the rules. And if the rules change, we'll play by them."
Robert Sharp, a Rapid City ad executive, said his agency has won some state contracts but that they were done under the bid process. He said he doesn't make political donations.
"There are no favors paid to us. We work hard for everything we've gotten."
Sharp said he'd like a chance at Lawrence & Schiller's no-bid contracts. But he also said he doesn't think such contracts are bought through political contributions.
"I don't believe that, and I'd hate to think that I'd have to pay to play. I just won't do it," Sharp said. "I would hate to think that's the way it is. In Illinois, maybe, but not here in South Dakota. I don't think it's true."
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