Nebraska State Auditor found the Department of Economic Development's $2.5 million no-bid bioeconomy contract lacked the required emergency justification, January 2026; Gov. Pillen said his office recommended the contractor and has defended the award

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In a January 6, 2026 letter, State Auditor Mike Foley reported that the Nebraska Department of Economic Development signed a 14-month, $2.5 million contract with Global Sustainability Developers, LLC on May 1-2, 2024, one month after LB 1412 took effect, on an emergency (no-bid) basis. State contracts over $50,000 must be competitively bid unless an exception applies. The Auditor wrote that the emergency form was signed May 7, 2024, after the contract, and that its second page, which asks for the reasons for the emergency, was left blank, so no justification was provided as the law requires. He wrote that the Department had ample time to bid the work and that the approach resulted in the apparent exercise of favoritism. The contract was shortened on February 28, 2025, reducing total payment from $2,500,000 to $2,083,333.34. The letter quoted an April 29, 2024 email from the Department's then-director saying the contract language was "already vetted thru Julie and the Governor" (Julie Bushell is GSD's CEO), and the Auditor wrote that on December 17, 2025 Gov. Jim Pillen told him by phone that his office "recommended" the contract go to the company, calling it a "joint decision" with the former Department director. In a separate January 28, 2026 letter, the Auditor said he saw apparent attempts by the Department's former deputy director to backdate documents tied to the contract and referred the matter to the Nebraska State Patrol, the Attorney General and the Office of the Counsel for Discipline; no finding about the Governor's own conduct is made in that letter. The State Patrol passed the case to the Lincoln Police Department because of a potential conflict of interest, and Nebraska Public Media reported in March 2026 that the Lincoln police investigation was ongoing and would likely take months; the Attorney General's office declined to say whether it is investigating. As of a September 18, 2026 report by KOLN (WOWT) drawing on Flatwater Free Press, the Lincoln police investigation was ongoing, and no charges were found in the sources reviewed. The Auditor's January 6 findings are directed at the Department's handling of the contract; the Auditor did not make a separate finding about the Governor. Pillen has publicly defended the award. He said an emergency sole-source award was needed to move quickly on federal funding, and in February 2026 he said his team "followed the letter to the 'T.'"

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