Open the speculation floodgates....

Governor Dennis Daugaard announced today that Attorney General Marty Jackley and federal law enforcement have been investigating the Governor's Office of Economic Development for financial misconduct. Not his Office of Economic Development, Daugaard emphasizes, but someone else's:

Earlier this year, I became aware of alleged misconduct, prior to my administration, at the economic development office.... I asked the state Attorney General to investigate and provided all relevant materials to him. There has also been a federal investigation. I refer any further questions regarding the investigations to the Attorney General and the U.S. Attorney.

I take very seriously my responsibility as Governor to protect taxpayer dollars and to ensure the integrity of state economic development programs. I am confident in the integrity of those in my administration who work at GOED, and at my direction, GOED has initiated an independent review to verify that any alleged misconduct was an isolated incident [Governor Dennis Daugaard, quoted in "Governor: 'Misconduct in State Office under Investigation," Mitchell Daily Republic, 2013.10.30].

Governor Daugaard says he learned of the issue under investigation last spring. Attorney General Jackley confirms the state investigation continues. U.S. Attorney Brendan Johnson declines to confirm or deny the existence of the investigation that South Dakota's governor and attorney general say exists.

Daugaard and Jackley offer no dates or names, but they do say the misconduct took place prior to January 2011. Unless the alleged misconduct was really well hidden for over a decade, we are thus talking about possible misconduct under Governor Marion Michael Rounds.

You know, the guy running for U.S. Senate... and under whom Daugaard was Lieutenant.

And if we're talking misconduct under Rounds's GOED, there's a fair chance it could be connected to the cabinet sceretary who oversaw that GOED from 2006 to 2010, Richard L. Benda.

You know, the guy who was found shot dead in a grove of trees last week, whose cause of death remains under investigation, and whose funeral was yesterday, nine days after he died... and one day before Governor Daugaard chose to announce a problem he's known about for months.

And if the state and feds are investigating, we're not talking about someone walking home with a stapler. We're talking about someone in state government doing something wrong with money (probably a lot of money) connected to the federal government. What GOED program could that be?

How about the EB-5 visa program, the program where wealthy foreigners essentially buy their green cards by investing $500,000 in new American business ventures? The feds have looked into abuse of the EB-5 visa program in Texas. South Dakota, operating through the privately incorporated South Dakota Regional Center, has used EB-5 money to fund numerous projects: the Dakota Provisions turkey plant in Huron, the Deadwood Mountain Grand Casino, the Veblen megadairies, and Northern Beef Packers.

The last two were the biggest projects the SDRC funded during the Rounds Administration. And without the advocacy of Mike Rounds and the financial wizardry of Richard Benda, Northern Beef Packers in particular never would have happened. The Veblen megadairies and Northern Beef Packers both made millions of dollars of EB-5 money disappear in apparent mismanagement and bankruptcy.

If there was any place for anything to go wrong with big money, the EB-5 visa program and the bankrupt projects it funded seem like the first place to look.

That said, here are two quotes from David Montgomery's report that may echo in the coming weeks. First from the campaign trail:

Daugaard’s precessor as governor, Mike Rounds, acknowledged he “recently became aware” of the investigation but declined further comment via a spokesman for his U.S. Senate campaign.

“I believe it is appropriate that any further questions be directed to Attorney General Marty Jackley,” Rounds said in a statement.

Rounds’ spokesman, Mitch Krebs, declined to say whether Rounds had been interviewed by law enforcement [David Montgomery, "SD under Investigation Week after Official's Death," Political Smokeout, 2013.10.30].

Stace Nelson, Larry Rhoden, Annette Bosworth, turn on your radars.

And over at U.S. Attorney Johnson's office, Montgomery has one heck of a hypothetical conversation:

If Benda was related to the investigation, his death wouldn’t necessarily halt it. Speaking in general terms, Johnson said in some cases investigations continue even if the central figure dies during the process [Montgomery, 2013.10.30].

Remember how Brendan Johnson decided last spring not to run for Senate against Mike Rounds? Remember how he wanted to focus on his work at the U.S. Attorney's office? Perhaps we're about to see another big chunk of what that work has been.

There are a lot of dots here. Watch for connections.