Gov. Kristi Noem's reelection campaign has returned $980 to a Florida millionaire that was originally reported as coming from a nonprofit — which is not allowed to make political contributions.
The campaign updated the source when the donor said it was actually her, not her charity, that made the donation. The campaign then returned the contribution since the correction pushed the woman's total contributions over the state's legal limit.
All of those actions followed SDPB News inquiries about the matter.
The contributions involve Jackie and David Siegel, a millionaire couple from Florida who gained fame after a 2012 documentary, "The Queen of Versailles," chronicled their quest to build one of the largest mansions in the U.S. during the Great Recession.
The donations also involve the Victoria's Voice Foundation, a 501(c)(3) organization founded by the couple. The nonprofit is dedicated to drug prevention and named after their daughter, who died of a drug overdose in 2015.
The state of South Dakota plans to use curriculum from the foundation. The curriculum is free, but public records show the state has a $10,500 contract with a Vermillion company to customize the materials for South Dakota teens.
InternalRevenueServicerules say 501(c)(3)s, which are exempt from paying taxes, are not allowed to make political contributions.
But South Dakota law allows Noem's campaign to accept such donations, according to the campaign, an attorney and the Secretary of State's Office.
"It's perfectly permissible for them to have accepted it," said Sara Frankenstein, a Rapid City-based attorney who specializes in state and federal election laws.
Frankenstein, the campaign and the Secretary of State's Office all pointed to state laws that say "entities" can contribute to candidates, and nonprofits are included in the definition of "entities."
However, a professor who specializes in election law says state campaigns should reject such donations on an ethical basis.
"Their legal counsel should know better and say this is money coming from an organization that may not make these contributions under federal law," said David Schultz, who teaches at Hamline University and the University of Minnesota.
The donations
SDPB News contacted the campaign and foundation after noticing that Victoria's Voice Foundation donated $980 worth of travel to Kristi for Governor — Noem's reelection committee.
The donation was reported in the committee's 2021 year-end report, which was released last week.
The report shows that Jackie and David Siegel donated $4,000 and $3,605 worth of catering, respectively.
The foundation and committee declined to share the date of the donations or other details about the travel and catering.
But the donation from the foundation would have been made sometime between Dec. 31, 2020 — when the previous campaign finance form was due — and November 2021.
Joe Desilets, Noem's campaign manager, said the donation arrived before he joined the team in November 2021.
David Siegel, the founder and CEO of Westgate Resorts, had a $940 million net worth in 2016, according to Forbes. Jackie, who has a degree in computer engineering, is involved with the company, philanthropy and beauty pageants.
The couple and their company are Republican donors.
David Siegel's contributions include $35,000 to former President Donald Trump and $29,400 to the Republican National Committee in 2019.
Recent campaign finance reports do not show any contributions from the couple to Noem's federal political action committees.
Victoria's Voice offers a drug prevention program for teens, educates students and the media about addiction, works on drug policy reform, and ensures that first responders are stocked with Narcan — a drug that treats opioid overdoses — according to the foundation's website.
Its partners have included the U.S. Drug Enforcement Administration, Sinclair Broadcast Group, Wells Fargo and PepsiCo.
Victoria's Voice had $1.7 million in revenue as of December 2019, according to its latestpublictaxfiling.
What happened
Victoria's Voice Foundation said it never made a donation to Noem's committee.
"David & Jacqueline Siegel are friends and proud contributors to Governor Kristi Noem and her tireless advocacy for keeping kids away from drugs and eliminating the national opioid epidemic," a spokesperson said in an email. "The Victoria’s Voice Foundation has not made a political campaign contribution to Governor Kristi Noem and any information showing otherwise is an error not made by any staff member of the Foundation."
But the Noem campaign said the foundation did donate — by accident.
Desilets said the committee received and accepted the in-kind contribution from the foundation since it's legal to do so under state law.
But he said the campaign received a corrected form on Wednesday stating that the contribution was meant to be from Jackie Siegel, not the foundation.
The campaign said it will amend its report to update the source of the donation.
It's also returning the donation since it puts Jackie Siegel over the contribution limit. South Dakota law says individuals and entities can only contribute $4,000 per candidate each calendar year.
Desilets said the campaign will also update the report to note the refund.
SDPB asked the foundation and committee to share documents related to the donation.
Victoria's Voice Foundation did not respond and Desilets said the campaign's policy is to only share donation materials that must be disclosed under state law.
Schultz, the election-law professor, said the foundation and committee should provide the documents to be transparent.
"You've got the campaign who records it as a foundation thing. Now they are saying, 'Oh, we made a mistake on it. Now, we're going to retract it.' And now there's a problem with it being too large of a contribution," he said. "I don't know, if I'm the average reader, I'm looking at it from the outside saying something looks incredibly fishy on this in terms of well, who's telling the truth or who's not telling the truth, and the campaign doesn't correct it until a reporter talks to him."
Frankenstein said there's no legal or ethical problem, and the Noem campaign responded appropriately.
"The campaign doesn't have to look out for the best interests of the various entities that donate them money. It's not the campaign's job to make sure all the various organizations in the world follow their own laws to their best interests," she said. "But here you can see that Governor Noem's campaign is obviously being helpful to this tax exempt organization and allowing them to change the donation or the contribution from coming from that 501(c)(3) to coming from an individual person."
Desilets said the campaign won't accept such donations in the future.
"I would be shocked if we were put in this situation again," he said. "It's something that I'm going to keep an eye out for and make sure it doesn't happen again."
State using materials from foundation
The governor and members of the Siegel family have attended multiple events together.
The couple and governor were at a Nov. 26, 2021, event in Las Vegas where former Trump and Noem adviser Corey Lewandowski allegedly sexually harassed a Trump donor.
Media reports say the incident happened during a fundraising dinner for Victoria's Voice at a Benihana restaurant inside one of the Siegels' Westgate hotels.
Jackie Siegel also visited Noem in December 2020.
Siegel posted an Instagram photo with Noem inside Siegel's private jet and said the pair met to discuss how Victoria's Voice Foundation could help in South Dakota.
A December 2021 contract shows that the state Department of Education is paying a Vermillion company, Sage Project Consulting, up to $10,500 to customize a video series from Victoria's Voice Foundation.
The department told SDPB that it's partnering with the Department of Social Services on the project.
"Students, like others, have faced struggles throughout the pandemic, and our work with Sage Project Consulting will ultimately lead to a series of videos related to addiction prevention and designed specifically for South Dakota youth," the DOE said in an email. "Sage is helping us to assess and modify resources that are available from Victoria’s Voice, a nonprofit organization that works to prevent addiction and save lives from overdose."
Schultz said ethical questions arise from the mixing of personal relationships, campaign contributions and the new curriculum.
"At the very least we can now raise the question and say, 'OK, why did they give the contribution and why do we have these materials being distributed across the state?" he said. "Even if it's not real conflict of interest or real impropriety, it raises the appearance of it and that raises the ethical issue."
Desilets rejected that characterization.
"I mean I think that's the most absurd thing in the world," Desilets said. "The governor also drives a vehicle and we accept money from auto dealers."
Desilets said Victoria's Voice Foundation is not benefiting directly from the state's use of its curriculum since it's a nonprofit that provides its materials for free.
