The first-term governor has positioned herself as a conservative hero ahead of a possible presidential run, but her record paints a more complicated picture.
The first-term governor has positioned herself as a conservative hero ahead of a possible presidential run, but her record paints a more complicated picture.
G overnor Kristi Noem has cultivated a certain image — that of defiant red-state outlaw bucking the diktats of nanny-state Fauci-ism.
Her profile, in this mold, rose considerably last year when her state of South Dakota emerged as the only one never to enter coronavirus lockdowns, defying the public-health bureaucracy’s warnings of catastrophe with the lowest unemployment rate in the nation alongside fewer deaths per capita than lockdown-happy New Jersey and New York. The governor quickly began to look like a real contender in the nascent battle for the next Republican presidential nod: In February, the Associated Press reported that she raised nearly $1 million in the last quarter of 2020, only around 20 percent of which came from within South Dakota. In March, she headlined CPAC, where she placed second to Ron DeSantis in the event’s 2024 straw poll that did not include Donald Trump. In May, she officially formed a federal political action committee, dubbed the Noem Victory Fund.
But even as she began to position herself as a national contender in the first months of 2021, Noem’s status as a rising Republican star has been dampened by a number of controversies back home. Most notably, her surprise “style-and-form” veto of House Bill 1217 — a law that would have banned biological males from competing in women’s sports — did serious damage to the young governor’s star power. The move effectively gutted the legislation and hurt her self-styled image as a staunch conservative fighter; Noem was accused of caving to the demands of the NCAA, Amazon, and the number of other powerful left-leaning corporations that had opposed the legislation. For many of those on the right who had viewed her as an island of sanity and courage, the decision was a betrayal.
But some critics in South Dakota now say this was part of an extended pattern for Noem, who has repeatedly sided with big business against social conservatives in the state legislature.
While Noem has gone to great lengths to market herself as an uncompromising champion of conservative values, Republican lawmakers, activists, and others working in the state tell National Review that they have grown increasingly concerned about the governor’s close relationship to business interests with a long record of advocacy for far-left social policy. These concerns go beyond the controversy over HB 1217.
“I think one of the most common words that I have heard in recent years in relation to the governor is ‘disappointment,’” says John Mills, a Republican lawmaker representing South Dakota’s House District 4. “And you know, many of us who had high hopes for her have felt that disappointment.”
Noem’s office declined to give an interview but pushed back firmly in an emailed statement on any suggestion that the governor is being improperly influenced.
“Nobody is making decisions for her,” a spokesman tells National Review.
‘As Close as an Adviser Can Be’
To one degree or another, individual liberty, limited government, and fidelity to the Constitution have been the principles that Noem has invoked to defend herself against criticisms from the right. But there are reasons to be skeptical that her adherence to them explains everything about her controversial legislative decisions in recent months.
Although Noem has been governor only since 2019, her office has already been the subject of ethical scrutiny on multiple occasions. One of the first four employees she hired for her transition team in 2018 was her daughter, Kennedy Noem, still a student at South Dakota State University at the time of her hiring. Over the course of the two years she worked for her mother, Kennedy enjoyed more than $17,000 in raises — from $40,700 to $57,912 — at the taxpayers’ expense, including a 12 percent wage boost in the midst of a wage freeze that Noem had imposed on all other state employees in December 2020. That, paired with the fact that Kyle Peters, the husband of Noem’s older daughter, took a $60,000 salary in the Governor’s Office of Economic Development from the beginning of Noem’s term through June of this year, prompted a Republican state senator to introduce an anti-nepotism bill aiming to bar state officials from hiring relatives.
To be fair, nepotism is not new in South Dakota politics: Dennis Daugaard, whom Noem succeeded as governor, tapped his son-in-law Tony Venhuizen to serve as his chief of staff for the last four years of his governorship. In a state of well under a million full-time residents, some argue that a certain amount of this style of politics is inevitable.
But in March, when Noem’s reversal on HB 1217 blindsided many who had come to see her as a reliable conservative, she was criticized for more serious conflicts of interest in her office.
In the midst of the uproar over transgender athletes and women’s sports in South Dakota, a few articles and blog posts surfaced here and there about a man named Matt McCaulley. McCaulley, a policy adviser and close confidant of Noem’s who headed up her transition team in 2018, is a registered lobbyist with one of the “deepest client lists in . . . South Dakota,” in the description of the Capital Journal. In the context of HB 1217, one of his major clients was the subject of particular interest: Sanford Health.
Sanford, where public records show McCaulley is currently registered as a lobbyist, is the largest employer in South Dakota by a degree of nearly sevenfold. The Sioux Falls–based health-care conglomerate also happens to own Sanford Sports Complex, a sprawling set of sports arenas and conference buildings boasting upwards of one million visitors a year that has been responsible for bringing some of the first major NCAA games to South Dakota since it was built in 2013. On March 19, Sanford announced a $50 million expansion of the arena in the hopes of luring in big tournaments — the same day that Noem issued her style-and-form veto of HB 1217.
There was real money at stake if NCAA pulled games and tournaments from South Dakota, as it had in response to North Carolina’s 2016 bill restricting bathroom use to biological sex. The Sanford Sports Complex expansion was banking heavily on its ability to bring in new NCAA tournaments. That’s why both the statewide and Sioux Falls–based Chambers of Commerce, which McCaulley and Sanford are closely tied to, vigorously opposed HB 1217. David Owen, the president of the South Dakota Chamber, called the law “the worst bill that passed this session.”
It was no secret that the prospect of the NCAA pulling games from South Dakota’s stadiums had featured heavily in Noem’s decision to gut HB 1217. She cited the threat regularly herself, explaining that “we have had to fight hard to get any tournaments to come to South Dakota” in a heated exchange about the legislation with Tucker Carlson. But just how much did McCaulley, who has lobbied for Sanford since at least 2016, influence this decision? Noem has repeatedly maintained that her style-and-form veto was made at the urging of numerous “legal experts,” which her office has refused to identify by name. Redstone Law Firm, where McCaulley is managing partner, takes in hundreds of thousands of taxpayer dollars in “legal consulting” contracts with the governor’s office. And McCaulley is not the firm’s only Sanford connection: Grace Beck and T. J. Nelson, who both work for McCaulley at Redstone, are also registered as active lobbyists for the health-care company, according to the South Dakota secretary of state’s website.
Multiple sources also tell National Review that McCaulley and Noem are closer than they publicly let on. The Sanford lobbyist is “the most consistent and probably the only one that stayed with [Noem] other than her husband, as far as an adviser, throughout her career,” according to a South Dakota state legislator who spoke on condition of anonymity. “So he’s as close as an adviser can be, and I think he’s probably in on every major policy decision that she makes.” McCaulley was on stage at Noem’s victory speech during her first election to the U.S. House of Representatives all the way back in 2010 and was a Noem donor as early as 2009. Kennedy Noem interned for McCaulley at Redstone. And McCaulley employed Venhuizen, who served as Noem’s chief of staff from March 2020 to April 2021, before Venhuizen moved to his role in the governor’s office.
McCaulley and Sanford did not respond to National Review requests for interviews.
Noem’s ties to Sanford don’t end at McCaulley. Kassidy Noem, the governor’s elder daughter — and the wife of Noem employee Kyle Peters — worked for the company in 2017. Venhuizen, a current Noem appointee to the South Dakota Board of Regents, serves with Paul Hanson, the president and CEO of Sanford Sioux Falls, on the board of the Sioux Falls Chamber of Commerce (an organization that listed the fairness-in-women’s-sports bill as “of the highest importance” for Noem’s veto). Tim Rave, another Noem appointee to the Board of Regents, was Sanford’s vice president of public policy — a job he accepted after resigning from his position as majority leader in the South Dakota Senate in 2015 — and is currently the president and CEO of the South Dakota Association of Healthcare Organizations, whose Board of Trustees is also chaired by Hanson. Public records show that the state’s Board of Regents, at least half of which is now staffed by Noem appointees, sent its general counsel to lobby against HB 1217 in the South Dakota House of Representatives.
Sanford Health is also Noem’s top career campaign funder, donating upwards of $105,000 — almost $40,000 more than her second-largest donor — when Noem served in Congress from 2011 to 2019.
Some of this could be chalked up to the fact that Sanford is a powerful business interest in a small rural state. But by all accounts, Noem’s relationship with Sanford is chummier than is normal in South Dakota politics. As the money-in-politics investigative reporting website Sludge wrote in April 2020, “neither Noem’s successor in the House (Rep. Dusty Johnson) or predecessor (Stephanie Herseth Sandlin) count Sanford Health among their top career donors, and Noem received more money from Sanford Health in her eight years in Congress than Sen John Thune (R-S.D.) has received from the company since first running for a seat in Congress in 1995.”
In the face of Sanford’s influence in Noem’s office, then, some suspected that her decision on HB 1217 had more to do with powerful donors than it did prudential judgment. “I, like so many other South Dakotans, was appalled at her stance with the women’s sports bill and seeing how she handled herself on a national level was eye opening,” Sara Lynn, a popular South Dakota-based blogger and small-business owner, lamented in a written statement to National Review. “She knows what her voters want, yet she chooses to put big-donor interests like Sanford first.”
Multiple sources in South Dakota politics — including Republican state legislators and a staffer with firsthand experience working in Noem’s office — tell National Review that Sanford has a long history of killing conservative legislation behind the scenes, beyond its recent efforts surrounding transgender athletes in women’s sports.
“Just from what I’ve learned about Sanford during my time in the legislature, I avoid them as a medical institution,” says John Mills, who was a co-sponsor of HB 1217. “I think their morality and their policies don’t line up at all with me or with conservative views in general.”
Furthermore, one source who worked for Noem’s office and attended policy meetings says that McCaulley was a regular attendee and a vocal presence in those closed-door sessions and often advocated forcefully against a wide range of conservative legislation. Well beyond HB 1217, that legislation included conscience rights for medical practitioners who objected to performing abortions and gender-transition surgeries, a law banning puberty blockers and sex-reassignment surgery for children under 16, and a number of other bills that conflicted with Sanford’s business interests. McCaulley would also meet separately to privately discuss legislation with Noem and Venhuizen “at least once a week,” according to this individual.
“He definitely had the governor’s ear,” says the source, who asked for anonymity for fear of retaliation. “I was really disappointed to see a lot of good conservative bills die because of the fact that Matt McCaulley has such a huge anchor in those policy meetings.”
Big Business Lurches Left
While Sanford’s direct line of influence in Noem’s office has raised concerns, even more significant is the content of what Sanford lobbies for, both through McCaulley and on the floor of the South Dakota state legislature. Sanford’s far-left record on cultural issues raises troubling questions about its intimate relationship with Noem’s office, particularly in light of the recent controversies surrounding the governor’s positions on legislation such as HB 1217.
Sanford has a history of pressuring state lawmakers to kill socially conservative bills that come up for a vote in the legislature. HB 1217 defied the odds when it made it out of a Senate committee — where more business-friendly establishment Republicans significantly outnumber social conservatives — via “a procedural maneuver known as a smoke-out,” which supporters used to “force it out of a Senate committee where it had been stopped, and then [get] it on the Senate debate calendar with no votes to spare,” according to Kelo, a Sioux Falls–based local news group. The bill had been unanimously killed in committee, but its backers were able to force it out by rallying just enough senators to overpower the committee’s decision and vote 18-16 to bring it to the floor. That took Noem’s team by surprise, say multiple state legislators familiar with the situation.
Sanford lobbyists, who maintain a ubiquitous presence in the state Capitol, are usually able to squash similar bills before they make it to the governor’s desk. Public records show lobbyists from both Sanford and the South Dakota Association of Healthcare Organizations were sent to oppose HB 1247, a bill that would have expanded conscience rights for medical practitioners and allow them to not be compelled to perform abortions, transgender surgeries, or other practices they found immoral. They were successful: The legislation died before even making it out of the House. In the same session, multiple lobbyists from the health-care company — and one from the South Dakota Medical Association, whose PAC is chaired by a Sanford doctor — showed up to kill HB 1057, which would have barred the chemical castration and surgical sterilization of children under the age of 16. That bill died in committee in the Senate.
“The bill to prevent doctors from giving hormone-blocking drugs to kids — when it failed, that was all Sanford,” Mills tells National Review. “They pushed like crazy on that. I mean, that’s a money-making business for them. They can sell kids who are confused about their gender very expensive treatments for the rest of their life. And I just find that unconscionable. When they showed up in the Capitol with a bunch of people in white lab coats to lobby against that bill, I was like, ‘I’m done with you guys.’”
That might be explained at least in part by the fact that Sanford sells puberty blockers and performs gender-reassignment surgery. “You want to believe it’s not about the profit, but you also witness the reality of what’s happening on the ground and can’t help but wonder,” says Mills.
Whether motivated by business interests or deeper ideological principles, the company’s commitment to cultural liberalism is striking, given its influence within the governor’s office in such a deep-red state as South Dakota. Sanford clearly has Noem’s ear: While it was not widely reported at the time, Noem herself voiced “concerns” about the proposed ban on puberty blockers for children early last year, citing the principle of limited government. “When you take public policy and try to fill parenting gaps with more government, you have to be very careful about the precedent you’re setting,” she told reporters.
This seems to reflect a trend in South Dakota. The state, rated as R+16 by the Cook Political Report, is home to a deeply conservative voter base. But in recent years, its powerful business interests — mirroring the leftward movement of big business nationwide — have become committed to increasingly radical left-wing cultural policies, even as they continue to support a conventional “business Republican” economic agenda.
This is evident in the South Dakota Chamber of Commerce, which has strongly opposed most of South Dakota’s socially conservative legislative pushes in recent years, at the statewide and local levels. Both the statewide and Sioux Falls–based Chambers opposed a bill that would have barred changing the gender displayed on one’s birth certificate, sending lobbyists to oppose it in hearings and listing it as “Tier 1,” i.e. of highest priority, on its legislative-session scorecard. Also opposed by the South Dakota Chamber were medical conscience rights, the ban on transition surgeries for minors, and a ban on biological males using women’s bathrooms and locker rooms in public schools (HB 1008). All of those bills were opposed by the chamber’s lobbyists in the state House; none of them passed.
Until recently, Noem has largely escaped conservative scrutiny for her closeness to these interests due to what was perceived to be her principled stance on coronavirus lockdowns. In an emailed statement to National Review, a spokesman from Noem’s office writes:
Anyone who knows or has worked with Governor Noem knows that the buck stops with her. Nobody is making decisions for her. As an example, I promise you that Sanford Health has not always loved the Governor’s freedom-first approach to the COVID pandemic. Remember, she is the only governor in America who never ordered a single business or church to close. She never mandated masks or shut her state down. And she often butted heads with Sanford leadership as a result of that.
That would certainly be a powerful counterpoint to conflict-of-interest concerns. Indeed, multiple high-ranking Sanford officials had called on Noem to implement measures such as a mask mandate, which never appeared in South Dakota. As Noem tells it, that absence of lockdowns or mandates was the result of her conservative leadership — in fact, South Dakota’s pandemic response is the primary source of Noem’s claim to the national spotlight.
But here, too, a closer look at Noem’s record reveals a more complicated story than the one her office tells.
A Limited-Government Conservative?
Were Noem to run for the White House, South Dakota’s refusal to lock down would likely be the basis of her campaign. It’s already a talking point she has used in an attempt to distinguish herself from other potential 2024 contenders. “South Dakota was the only state to never close a single business — the only state,” she boasted in her speech at CPAC. “We didn’t mandate. We trusted our people and told them that personal responsibility was the best answer.”
It’s true that South Dakota never issued mask mandates or stay-at-home orders. But whether that conservative victory is creditable to Noem is more complicated than her rhetoric suggests. Some conservatives have raised doubts. Among their ranks is Jon Schweppe, director of policy and government affairs for American Principles Project (APP). (Noem had publicly signaled agreement with APP’s support of HB 1217 before her abrupt about-face, drawing the organization’s ire.) In a Substack post back in July, Schweppe reported that Noem tried to lock down South Dakota: “On March 30, 2020, at the request of Gov. Noem, South Dakota Rep. Lee Qualm introduced House Bill 1297, a bill that would declare a state of emergency in South Dakota and give the Secretary of Health unprecedented powers to impose mandates and lockdowns, allowing for the placement of ‘reasonable restrictions’ on any public or private location, including a ‘business, park, school, or other location that promotes public gathering.’”
That bill was decisively rejected by a 50-17 margin in the staunchly conservative South Dakota House of Representatives. But if Noem had gotten her way, it would have expanded her power to unilaterally mandate the very coronavirus restrictions that she built her reputation on opposing.
Two long-forgotten gubernatorial executive orders from the early months of the pandemic — both issued from the governor’s desk on April 6 of last year — also directed all public and private institutions in two of the three largest counties in the state to follow CDC guidelines. Noem’s diktats, which applied to more than a quarter of the state’s population, restricted public gatherings to ten people or fewer, suspended “all non-essential elective surgeries,” and imposed a stay-at-home order for all residents who had “serious underlying medical conditions” or were over the age of 65.
These efforts at the beginning of the pandemic have been widely overlooked, but they call Noem’s national image into further question. In a statement to National Review, a spokesman from the governor’s office says the orders were “not mandatory.” That’s technically true. But that was a result of South Dakota’s conservative legislature bucking Noem’s wishes. Noem had no way to enforce her executive orders without the power consolidation proposed in HB 1297, which the legislature had rejected.
Noem herself admitted as much at a press conference on April 7, 2020. When asked by a local reporter about the enforcement mechanisms for the new executive orders, Noem said: “We did have a bill that came before the legislature last week that talked about some enforcement mechanisms we wanted to give to the Secretary of the Department of Health, but the legislature did not support that bill — therefore that is not a tool that we have available to us today.” To her credit, Noem rescinded 2020-12 at the end of April, and 2020-13 expired the same week.
It is indeed true that “South Dakota never closed down,” as Noem likes to claim. But that was in spite of her, not because of her.
As Schweppe writes, “Noem was for the lockdowns before she was against them.”