Minot, ND – The North Dakota Ethics Commission announced Wednesday that it will open a formal inquiry into the North Dakota Development Fund, a state‑run program that provides loans to emerging businesses. The move follows a performance audit covering July 2019 through June 2024 that identified just under $4 million in financing for five entities linked to two members of the fund’s board.
Audit raises questions about oversight
The audit, released earlier this week, found insufficient documentation showing how potential conflicts of interest were identified, evaluated, and managed. It also flagged missing or incomplete records for the financing in question. While the audit did not allege illegal activity, it highlighted weaknesses in record‑keeping and conflict‑of‑interest policies.
Ethics commission’s response
Commission Chair Pam Sharp explained the commission’s decision: “We talked about who else it would be if we weren’t the ones initiating it because the Attorney General can’t. So, what we decided to do was open an inquiry to get some information. It could lead to an investigation, but we need to get some information first.” Sharp added that the inquiry is a preliminary step and does not itself establish any ethics violation.
Fund’s recent activity
Despite the scrutiny, the Development Fund announced Tuesday that it approved more than $6.3 million in loans for four businesses, including a $5 million loan to Packet Digital for a new drone‑battery manufacturing plant in Fargo. The fund’s mission is to help North Dakota companies secure financing that may be unavailable through traditional lenders.
Legislative and legal backdrop
In response to the audit, the state legislature’s audit‑review committee recommended that the fund be eliminated and that its outstanding loans and investments be transferred to the Bank of North Dakota. Implementing that recommendation would require action by state lawmakers. The committee also referred the audit findings and related testimony to Attorney General Drew Wrigley for possible investigation. Wrigley declined, noting that his office represents current and former fund officials in a civil lawsuit.
Fund officials’ corrective steps
Fund representatives say they have already taken steps to improve transparency. They report strengthening disclosure and record‑keeping practices, prohibiting related‑party transactions, and planning additional policy enhancements. Sharp said commissioners will begin by reviewing the audit and the legislative committee’s discussion before deciding whether to request further information.
What’s next?
The ethics commission’s inquiry will focus on the audit’s findings and the fund’s conflict‑of‑interest policies. If the commission determines that further action is warranted, it could recommend a formal investigation or other remedial measures. The Development Fund has pledged to cooperate fully and to keep the public informed as the process unfolds.
We have reached out to a spokesperson for the Development Fund for additional comment on the ethics commission’s probe and will update this story as more information becomes available.
Original reporting: KFYR-TV Bismarck (news) — read the source article.
