North Dakota lawmakers call for independent investigation of AG cost overrun after 'troublesome' report
A report found that former Attorney General Wayne Stenehjem's office inked a lease in 2020 with a company owned by Bismarck GOP Rep. Jason Dockter.
BISMARCK — The North Dakota attorney general's office agreed in 2020 to lease a poorly equipped office building from a company owned by a state lawmaker, according to a report released by state Auditor Josh Gallion on Tuesday, Sept. 27.
After making expensive renovations to the south Bismarck building, the state's top law enforcement agency under the direction of then-Attorney General Wayne Stenehjem racked up a $1.7 million budget overrun, according to the report.
A legislative audit committee on Tuesday referred the matter for further investigation to current Attorney General Drew Wrigley, who said he will hire an outside agency to look into any possible wrongdoing.
The anatomy of a deal
Wrigley, who was appointed after Stenehjem died earlier this year, made public in June that the attorney general's office under his predecessor accrued significant unexpected costs tied to a leased building that houses the Bureau of Criminal Investigation, the State Lottery and other branches of the agency.
Former leaders in the office, including Deputy Attorney General Troy Seibel, had concealed information about the overrun from legislators and improperly tried to absorb the additional costs into the agency's budget, Wrigley alleged. Seibel, who left the office in March, has previously denied he withheld information.
Lawmakers directed Gallion to compile a report on the deal after learning of the overrun.
The auditor's 45-page report found that Bismarck GOP Rep. Jason Dockter approached state Director of Facility Management John Boyle in summer 2019 about leasing a Bismarck building to the state. (The report says Dockter incorrectly stated the attorney general's office approached him. Dockter said representatives from the office informed him of their interest in finding a new office.)
In spring 2020, Stenehjem's office and Boyle agreed on a 10-year lease for a south Bismarck building that Dockter's company, Stealth Properties, did not yet own. Dockter said his company wanted to have a lease in place so it could secure bank loans to buy the building. Several lawmakers remarked Tuesday that this is not typical of the state's leasing agreements.
Dockter, a nine-year veteran of the House of Representatives, served as the treasurer of Stenehjem's reelection campaign in 2018, according to state records.
The legislator said his company's lease with the attorney general's office was not tied to his personal relationship with Stenehjem or his stature as a public official. Dockter noted that he's "a taxpayer first" and he wouldn't have inked the deal if it were bad for the state financially.
“It looks like a conflict, but we (legislators) are private citizens," Dockter said. "The lease is market value. It's one thing if (the auditor) found that (the state) paid $3 more per square foot... But that's not the case."
Prior to the deal, division directors within the attorney general's office had raised multiple concerns about the new building, which lacked bathrooms, conference rooms, offices and file storage. The building has 2,600 fewer square feet than the agency previously occupied, per the report.
Several other companies co-owned by Dockter performed renovations as part of the lease, but outfitting the building for the agency quickly proved more costly than the original estimates, the report said.
In the end, the remodeling project cost more than $5.5 million — about $1.7 million more than Dockter's firms would cover, leaving the state on the hook for the difference.
Gallion's report also alleged that Dockter's firms generally kept poor records of invoices and may have double-billed the state for some expenses.
Dockter said he does not handle day-to-day operations at his companies, so he cannot comment on alleged accounting errors.
The report alleged that one firm co-owned by Dockter, Frontier Contracting, performed contracting work without a license. Dockter said a different company he co-owns, Parkway Property Management, was licensed to do the work, and the auditor misinterpreted the records provided by the companies.
Dockter said his companies did nothing wrong in their dealings with the state, adding that they will fully cooperate with any further investigations.
After Gallion presented the report Tuesday, several lawmakers voiced their frustrations with the state officials who inked the lease.
Rep. Keith Kempenich, R-Bowman, said the ordeal has caused him to lose trust in the agencies responsible for the ordeal.
Senate Minority Leader Joan Heckaman, D-New Rockford, said the report's findings are "troublesome on so many levels."
Boyle said he signed off on the lease when it was still a good deal for the state, adding that it was the change orders that drove up the price. Boyle said he's working with Wrigley's office on legislation to ensure that "this doesn’t happen again."