Background checks botched in Walz’s Minnesota cannabis director hiring, audit says

The governor’s office missed some standard background check steps before its botched appointment of Erin DuPree as Minnesota’s first cannabis director last fall, the state’s legislative auditor concluded Thursday.

DuPree, who owned an Apple Valley retail store selling hemp-derived cannabis products, stepped down a day after Gov. Tim Walz appointed her amid reports she sold illegal products and had federal tax liens and judgments against her. State Legislative Auditor Judy Randall’s preliminary assessment of the matter outlined missteps, recommended improvements that the governor’s office said it has since made, and declared the case closed.

Randall’s main takeaway was a missed review from the state Department of Revenue that could have uncovered the liens and judgments against DuPree.

DuPree and another finalist signed consent forms authorizing background checks by the state Department of Public Safety (DPS) and Department of Revenue.

The report states that the governor’s office assumed the Minnesota Bureau of Criminal Apprehension within DPS would work with the Revenue Department on its background checks of the finalists. When the BCA sent a summary background report stating DuPree “did not have any noteworthy financial obligations or debts,” the governor’s office thought she was in the clear.

But the BCA didn’t coordinate with the Department of Revenue and instead used a separate financial background check system that missed some key information.

“Among other things, BCA’s background check included a review of criminal history, driving records, civil judgments, and employment history. It also included a review of credit reports and net worth. It did not include a review of all information maintained by the Department of Revenue. As a result, the BCA background check did not identify any unpaid tax liens,” Randall wrote.

Randall noted that the governor’s office deviated from its standard procedure by sending DuPree’s consent forms to the BCA only and not the Revenue Department.

Staff from the governor’s office told Randall that the BCA “had never performed a background study for the Governor’s Office. As a result, it is possible that some assumptions the Governor’s Office made about the background checks—such as assuming that BCA was reviewing Department of Revenue information—were incorrect.”

Walz’s office appointed more than 750 people to state agencies, boards, commissions and other positions last year, Randall noted.

Going forward, Randall recommended the governor’s office independently confirm that background checks of high-level appointees include a review of the individuals’ business and tax information and any outstanding court judgments, among other things.

In a letter to Randall on Monday, governor’s office General Counsel Mary Fee wrote that the office has implemented the suggested changes, among others.

“We’ve also increased Governor’s Office capacity for research about potential appointments,” Fee wrote. “The Governor’s Office strives to go above and beyond to ensure quality appointments and we will continue that work. We appreciate the OLA’s collaboration to identify opportunities to improve.”

The governor’s office announced Thursday it has opened an expanded application process as it searches for a permanent director for Minnesota’s new Office of Cannabis Management, which is overseeing the creation and regulation of the recreational marijuana market. A dedicated recruiter from Minnesota’s Management and Budget agency will help conduct a national search. Applications will be accepted through Feb. 26.

State government veteran Charlene Briner has been leading the Office of Cannabis Management on an interim basis since June. Walz formally appointed Briner as the agency’s interim director on Thursday.

“For the last eight months, Charlene has worked tirelessly across state agencies to build the new Office of Cannabis Management from the ground up,” Walz said in a statement. “I’m grateful for the work being done to not only revamp our vetting process but also expand our recruiting process.”

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