While Pat Powers continues his 'Move-along-folks-nothing-to-see-here' routine, plenty of other bloggers and mainstream journalists are finding lots to see and talk about related to the potentially corrupt EB-5 visa program in this state. They're also talking about the program's connection to various ventures in the state (most notably the failed Northern Beef Packers plant) and to state political and business leaders (most notably former Governor Marion Michael Rounds).
And today, for the first time I've heard on the record, that talk turned directly to how this scandal might affect Smilin' Mike's campaign for a new job representing South Dakota in the U.S. Senate. South Dakota Public Broadcasting's Dakota Midday talked to two of its "Dakota Political Junkies" today, and host Karl Gehrke devoted more than three-quarters of the 20-minute set to the complexities of this story. He asked if there would be political fallout for Rounds, and here's what his panelists said (after clarifying that any fallout depends a lot on the outcome of the ongoing investigation):
If you are somebody running against Mike Rounds, you are going to do everything you can to sort of use this to cast doubt on his tenure as Governor. This is a political liability for him, no doubt about it; it's a question of how big it's going to be [Jonathan Ellis, as interviewed by Karl Gehrke, Dakota Midday, 2013/11/06 timestamp 10:01].
No doubt about it, says Ellis. Jon Hunter says how big the liability is might depend on how long all of us keep talking about it:
The longer the story goes on, the longer it will be associated with former Governor Rounds [Jon Hunter, Dakota Midday, 2013/11/06 timestamp 10:38].
Since one thing almost everyone seems ready to agree on is that we haven't heard everything the investigations will yield, I'd bet that the story has longevity that will keep the words "Rounds" and "economic development scandal" in the same vicinity for quite awhile.
*Bonus alternate storyline: If you're someone who'd like to make the EB-5 mess less of a liability for Rounds, Hunter gives you your talking points:
I think this story really is about the eagerness of doing [the Northern Beef Packers] project. All along, the eagerness overwhelmed, maybe, the financials of it or the logical business plan of it. ... Eagerness and desperation then led to some other practices that are now under investigation [Jon Hunter, Dakota Midday, 2013/11/06 timestamp 01:22].
Don't you just hate it when eager do-good-ery turns into a state and federal investigation?
The most likely reason this scandal probably hasn't caught fire locally or nationally, is that SEX has not yet been included in the mix.
Toby, you had me thinking with the first Hunter quote that even Jon Hunter was seeing things clearly. The second Hunter quote restores my faith in the Madison Daily Leader to miss the point. Eagerness and bad planning don't draw a federal investigation.
Roger, it doesn't take sex, either, to draw the feds. Let's hope we don't add that to the mix; I'm running out of fingers and toes to count the threads!
Cory, I want to let you know that I emailed MN public radio about the NBP scandal. I'll let you know what I hear.
Not to pour cold water on your meme here, but Gov. Walker survived a recall vote in Wisconsin in spite of a state "John Doe" investigation into his County office's illegal activities when Walker was County Executive in Milwaukee County. Unless Rounds is directly tied to the scandal/investigation, what these other clowns did is likely not enough to turn the tide against Rounds, especially since Rounds will have lots of money to dump into media buys to distract voters from that issue.
Unfortunately, we've gotten to a point in our politics where leaders can be guilty of gross mismanagement and allowing the ripping off the taxpayer, but they won't be held accountable. It would be nice if things were different in South Dakota.
The bigger issue is that GOED was a mistake from the time it was set up, and it should be totally eliminated. It was set up to create less accountability, and it worked exactly the way Republicans knew it would. This is really is about a culture of corruption in Republican circles. The only difference with this particular scandal is the amounts of money is far in excess of the usual petty South Dakota corruption.
Excellent points, Donald. Great comparison to the Walker fiasco, which I keep up on like a hawk. You are correct. It is crucial that this dialogue continues, that the questions are asked, and that the media has no choice but to hear these points and our voices. I fully believe that Rounds is directly connected to all of this. We can't get bored with the story or tired of keeping up with it. Culture of corruption indeed. From sea to shining sea, and SD is in the thick of it.
I think it inportant to know that Dennis Hellwig only wanted to build a 500 per day slaughter plant. It was the Rounds and associates group that eventually pushed him into the larger plant with the promise of more srate support from the EB-5 funds to complete the larger project. The first round of EB-5 money the plant received along with the other funds Dennis had arranged would have built and started the plant Dennis wanted. Then when Dennis was to receive the additioal funds he was promised, it was funneled to the Turkey Plant in Huron and Dennis was left out in the cold. This was complements of Mr. Benda and his side kicks which was surely approved by Rounds. I am also sure that everyone noticed that Rounds visited Aberdeen, SD over 10 times during the time Dennis was building Northern Beef and never once did he come to the plant. What a way to support what would be one of the largest new employers in the state. Mark my words, the feds are shaking the EB-5 tree and if they shake hard enough a pile of rats are going to fall out which include a large number of Aberdeen lawyers, state personnel, some bankers and this will eventually be the demise of Rounds. As they all fall out of this tree they will have the cash falling out of their pockets as they scramble their seperate ways. Who knows who will be found in the next tree belt, whoever threatens to tell all trying to save their own ass?????
Given the history of scandals in this country, there is rarely a resulting conviction for what the public deems as a crime.
If there are to be any charges, you can bet they will be for lying to a grand jury, lying to federal investigators or obstruction of justice.
Even if they follow the money, as they should, the likely hood is that the money made a clear get away and little if any will ever be recovered.
Cory, I know that a sex scandal wouldn't draw a federal investigation, except if you're Bill Clinton, they do draw the interest of the public.
What is everyone's opinion of the lack of political attacks over this? Steve Jarding's facebook page has been silent. Weiland hasn't mentioned it, nor has any of the Republican candidates running against Rounds.
Now my guess is there is 3 options
1. Someone in the know is saying its not that bad and don't make accusations. I'd say this is the least likely. If I was running the campaign and this is what I was being told I'd be pumping this story right now with attacks before the truth came out.
2. Exact opposite. people in the know are saying its much worse and Rounds is not going to look good when this comes to fruition. This makes more sense as you would want the criminal investigation and the story to handle itself. Political managers generally prefer to let certain stories spin themselves. And this is the type of case in which you would let it spin themselves
3. Most likely no one knows. I know some about the EB-5 program, I was in Pierre in 06 when a different beef plant was being discussed and was with a group and we went in to the Sec of AG's office to ask about it and I was so confused in the end I didn't know what to think.
I think the beef plant had done damage to Rounds before this, it was a complete disaster and it was something Rounds had his hands all over, this just makes it worse, how worse? Who knows. I think he is handling it well, but every day there is a new piece to the puzzle, and none of it is making any sense. If the story starts to make sense and it doesn't look great it could be bad, if the criminal investigation concludes and it makes the Rounds administration look bad it could hurt as well.
Joe, I agree with you. I'd be all over this... tho may be easier to say from our vantage points than political candidates. My opinion on this is that everyone senses this is a bigger and uglier tale than they are comfortable talking about. Because it is. It's difficult to put yourself out there unless there are major points you can stand on that you are confident to be factual. At this point, there is little that exists in that way --- yet.
Oh, and then there is the high profile gentleman who was found dead aspect of things. That's scary to people.
Joe, I lean to #3 right now. We don't know. If I'm running a campaign, I read up on the subject and be ready to fire when the information comes out. But I also run this calculus:
#1: If my candidate opens fire right now, and the investigations don't link to Rounds, my candidate looks bad.
#2: If my candidate opens fire right now, and Brendan Johnson puts Mike Rounds through a perp walk on December 1, my fire will have been unnecessary.
Conclusion: save my ammo. Stockpile my ammo. Whichever way the investigation goes, be ready to run hard as the candidate who will fight against either the incompetence (that's Rounds getting off easy) or the corruption (that's Rounds tied tightly to EB-5) that my opponent represents.
Donald, don't rain on our parade with empirical examples!
Indeed, we have to see how closely Rounds will be tied to the financial misconduct, and how grave that misconduct is. But look at what Allen talks about above: would that story, if borne out by documents and testimony under oath (Allen, can you provide that?), hang enough weight around Rounds's neck?
To tie that to the second quote from Jon Hunter that Toby offers, even if Rounds backers went for that line that the developers eagerness and desperation led to bad choices warranting federal action, the government—the Governor and his people—are there to check that eagerness, to make sure things don't get out of hand. At the very least, wouldn't his lax oversight would show he couldn't be trusted with the federal purse?
I don't know diddly about all this EB stuff and really don't understand it all. I get confused when the libbies want to open the walls for the Mexicans and then scream bloody murder about these other groups. I don't even pretend to understand this stuff. Mr. H is a better guy at getting the social aspect of however all this stuff works. This is not French Math, it is more of a human wiggly thing. I think Mr. H has a better toolset then I to understand it all and I am vastly confused. I don't know how Mr. Rounds is involved or how Mr. Nelson or Mr. Rhoden who voted lots on things might be. I just think that Mr. H has a good conclusion. basically shut up and let the Unbloggers sort it out. Unbloggers are better at it than us.
Oh I don't think Cory suggested he was going to shut up about it Grudz.
Cory, your thoughts on the Hunter quotes echo my own. I think the second one is just a representation of a couple of South Dakota traits that set our state up as a place where something like the EB-5 can go off the rails: (1) we love our reputation as a good, pro-business state, so we hesitate to be too critical of economic development in general, and (2) we're conflict averse to the point that we'll twist all around to put the best construction on a situation and to plausibly deny that anyone could have meant to do anything deliberately nefarious.
(Off topic completely: I loved how Bosworth said our troops overseas don't put protecting our country first at the debate tonight. LOL)
Agreed, Bree S. Cory's saying there's more to come that will bear on our discussion, but I don't get any sense that means the discussion should stop. Plus, I'd say Cory's holding his own with those "unbloggers," Grudznick; no reason to stop now and let them have all the investigative fun!!
Another guy you might want to try to contact is Hunter Roberts he was neck deep in the Economic Development for both Rounds and Daugaard and has been a floating head in Pierre for years. I testified for a wind energy bill in which he lobbied against it, I talked to him afterwards and and he said he liked the idea but the big boys upstairs told him to be against it.
That is why I have a hard time believing Rounds and his I didn't really know much about what was going on theory, as every time I was in Pierre and everyone I know involved in Pierre agrees with me that Rounds ran a tight ship and was a micro-manger on damn near everything.
One thing that may distinguish this scandal from others is the suspicious death of Benda.
One of the things bad guys (Rounds?) count on is incredulity on the part of the public. Will they be willing/able to believe that a South Dakotan, 'one of our own,' might be capable of such criminal behavior?
A lot will depend on how deep the investigation of GOED goes and who is investigating.
If the investigation is just son-in-law Tony going over and gazing across the office and calling it good, then not so much.
But if the Feds do a forensic audit that is made public...well, that wouldn't be just the right thing to do for justice and the taxpayers. It would most likely not play well for the former or current governors.
Given what we are learning along the way, that took a man to die under suspicious circumstances to happen, can we trust any of these people anymore?
If anyone in the GOP uses the word transparency out loud, you'll know they are either full of sarcasm or lying.
http://www.aberdeennews.com/news/aan-bollen-others-continue-support-for-eb5-program-20131106,0,4167582.story
I'm starting to realize that maybe one of the reasons and this is a major reason that historically certain dealings have not been challenged and the lack of transparency in our state is due to South Dakota being such a small state and very powerful people involved.
Let's face it this state isn't that big nor wealthy and we know people all over the state. The other factor is that we have always sought jobs and good ones that families can actually live on especially with benefits. Those jobs are hard to get and highly valued!
I'm thinking that a few reasons that folks might have looked the other way is they didn't want to ruffle any feathers or bite the hand that feeds you.
The more I read into this tangled mess the more other bloggers are digging into further past what may be considered questionable dealings and I see names of people that have contributed immensely to their local communities and the state in creating jobs, economic development and been very generous in donations to education, charities, the arts and other entities.
Does the good they create outweigh errors or maybe what some may consider questionable methods?
This is all so very complicated and there are hard questions.
Grudz: captain of the ship.
And yes, Toby's right: my comment above refers strictly to campaign strategy for four people. It does not apply to journalists of any sort. Even if I were on Team Weiland or Team Nelson doing opposition research, building that stockpile, and I found incriminating evidence about Rounds's involvement with the EB-5 program, I wouldn't put it on my candidate's blog or Facebook page. I'd call Madville Times or David Montgomery or Jeff Natalie-Lees, give them an anonymous tip with ironclad evidence, and let them run it. Or I'd call the FBI and let them investigate and arrest. I wouldn't create the impression that the charge was generated by political operatives... but once the charge was made, I'd operate politically all over the place.
The cynic in me says that this hasn't turned into a giant scandal because the money was from "foreigners". If this was money from SD farmers or some other local group we would be having multiple daily updates on the news.
The EB-5 program looks like "legal" bribery of the kind we might expect in Islamic states and Asian third-world areas.
I suspect that opponents of Rounds and Democratic candidates want this blizzard of crap to hit Rounds without their involvement or comments. Partisan attacks by candidates would allow Rounds to claim that the investigation etc. is just partisan flackery.
"Oh, what tangled hooves we cleave"
"Legal bribery", Doug? Maybe. The SEC and USCIS issued guidance last month warning people of investment scams exploiting the EB-5 program.
Isn't "legal bribery" a contradiction in terms?
I did not write "legal bribery". Perhaps one of you with a better vocabulary than mine can come up with a term that means something like "openly acknowledges,tolerated and non-prosecuted" bribery might be called in a single term. In any case, it appears that palms get greased.
Is there is difference in "legal" bribery, and "legal bribery?
"Legal" in quotes suggests the opposite.
Sorry if you are still confused by my convoluted writing.
Tony touches on the accountability issue that makes EB-5 problematic. Even with honest management, we're still separating investors from the business and community. If the capital that disappeared in Veblen and NBP had come entirely from local investors, there'd have been an even bigger ruckus. NBP might have been built differently and not gone bankrupt, because local investors would have been able to keep a closer eye on things.
One thing this whole EB5 mess highlights is the tendency for people in South Dakota to want to believe that "S.D. values" are superior to those of other states. The truth is that there is just as much corruption, dishonesty, crime in South Dakota as anywhere else. People are people no matter where they live.
Unfortunately, if we in S.D. live in a state of denial we will never see things improve. "South Dakota the denial State."
Tom nailed a large part of it. The SD myth, legend, and folklore was pathetically recently repeated by Daugaard's statewide oped coinciding with the pheasant opener.
Here are examples of worthwhile, sustainable, and exploitable economic development. Image one day being a 20 year old milking cows, the next day doing custom 3-D manufacturing for worldwide clients - from rural Minnesota.
http://www.bloomberg.com/news/2013-11-07/small-shop-hiring-fueled-by-3-printers-to-iphone-tools.html
Tom, Good point! I'm new to all of this and I suppose like the majority in this state was living day to day living in a false sense of security about what happens in SD govt. I felt our state was too small for corruption and shady dealings to occur. People would find out or there would be the peer pressure. Now I see where being a small state especially where one party has been dominate for so long can create an atmosphere for abuse and.
I have read via The Daily Republic about a bad actor within that dominate party that still holds office yet the Governor, legislature nor his party asked that he step down. It would sure impress me and restore a feeling of confidence if they had the integrity to police themselves and put the state 1st before party. He won't run for re-election now thankfully. It's a matter of public trust but evidently I'm too naïve in expecting that.
We need more transparency, checks and balances.