Democratic Representative Kathy Tyler thinks the controversy surrounding the Governor's Office of Economic Development's use of the EB-5 green-card-buying program warrants Legislative scrutiny. Republican Senator Ryan Maher does not. He used his power this week to keep discussion of the EB-5 program off the agenda:
Executive Board chairman Sen. Ryan Maher, R-Isabel, said the board already had a full agenda for its Monday and Tuesday sessions. He said legislators would not be able to get any answers while the EB-5 remains the subject of a state investigation by U.S. Attorney Brendan Johnson and South Dakota Attorney General Marty Jackley.
"You've got a Democrat with the feds and you've got a Republican with the state, so they're hammering all that out," Maher said. "All we're going to do is jump in the middle of it all, and what are we going to accomplish? Probably not much."
Maher said the issue could be considered by a legislative committee in December [Dirk Lammers, "Legislator Wants Audit of EB-5 Program in SD," AP via Businessweek, 2013.11.20].
Governor Dennis Daugaard is also declining to dig deeper, claiming it doesn't have the authority to audit the records of SDRC Inc., the private company to whom former Governor M. Michael Rounds surrendered state authority over the EB-5 program.
Blogger John Tsitrian deems Daugaard's demurral deplorable:
When asked to initiate such an audit during the past few days, a spokesman for Governor Dennis Daugarrd's offce was reported by [AP's Dirk Lammers] as saying that the contract between our state and SDRC "did not give the Governor's Office of Economic Development the authority to audit all of SDRC records." I'm sorry (and believe me, I consider myself a friend and supporter of Governor Daugaard) but this does . . . not . . . wash. Granted, SDRC's records involving affairs that have nothing to do with South Dakota are rightfully off-limits to SD auditors--but what about dealings involving public time and money that are directly done with our state? Speaking as a law-abiding, tax-paying citizen of this great State of South Dakota, I think I'm well within my rights to demand an audit of every single transaction that took place between my state and SDRC [John Tsitrian, "South Dakota Needs to Look at This EB-5 Thing," The Constant Commoner, 2013.11.21].
Tsitrian nicely strips away any partisan bull. The GOED/EB-5 scandal isn't about scoring political points. It's about honesty and accountability in the use of public dollars for economic development. There is no reason that the Legislature, the Governor, and the press (including the blogosphere) should not subject the very questionable EB-5 program to vigorous public scrutiny. Rep. Tyler, keep trying! Senator Maher, write "EB-5" at the top of December's agenda.
A bit of clarification: the E-board voted not to add my EB-5 discussion to the agenda. There was no discussion of too much on the agenda already. The reasoning was that there were investigations in the works, and this audit request was too premature.
So show us the contract between South Dakota and SDRC. We would like to know who signed it. Once the contract is provided we will see for ourselves whether it includes any provision that allows for an audit. While you are at it, tell us who wrote the contract.
Start the countdown on M. Rounds' announcement he is no longer a candidate for the U.S. Senate. As you can see, The Right Side Blog is in the hunt.
Also, this mess is splattered all over the Daugaard/???? administration, who recognized only recently the political fallout covers their watch as well. Daugaard was Rounds' hand-picked successor and was given a three-year head start by Rounds to make sure nobody else inherited the crown.
This thing is only going to get broader and messier ... it's South Dakota's Whitewater.
For the record, Rick, I put no stock whatsoever in Gordon Howie's claim to have heard from GOP leaders that Rounds will bow out. As with the vast majority of his blog posts, Howie has no substantiation at all for that statement.
R, I posted that contract November 3. It bears the signatures of Joop Bollen and Richard Benda. Click here to read: https://docs.google.com/file/d/0B3agsA-vm8SMU1lDMlN5bjNXdWs/edit
So you did. But the link doesn't work for me. Anything in there regarding audits?
Why would Howie have to protect his sources on a Blog? Don't bloggers have a lot more latitude than journalist? Cory?
Let the Republicans keep on obstructing justice for now, they are only making the scandal worse for themselves and raising more questions.
They can only stick their heads in the sand so long and hope this all goes away. It won't.
Graf #14 in the contract seems to contradict the Daugaard administration's claim that the contract did not give GOED the authority to audit all of SDRC's records. I will defer to any knowledgeable reader's different interpretation.
Yeah, I wouldn't give 2 cents for Howie's statements either. My prediction is based upon the facts of the case that we know so far, the questions that remain unanswered and the unchangeable reality that all roads lead to M. Michael Rounds when he was Governor.
This ain't going away. It's going to get deeper. It involves a violent death of a key Rounds appointee. The mess is on Rounds and his hand-picked successor. Rounds has ducked out of a few debates already which should have been cake walks ... except that he would have to start answering hard questions.
A competent campaign manager would tell him if he wants to run for the U.S. Senate, 2014 won't be his year.
I don't see Rounds just bowing out that easy. He's too power hungry. Perfectly fine with him if he takes the whole SDGOP down with him. And then that bit at the end about Benda getting shot in the head. And as if Noem's people would talk anybody that would talk to Howie about secret plans to pull a switcheroo in December.
And DWC says there was polling to see if people would vote for Howie for Governor? Venner for Senate? These people need to get over themselves. Newsflash: YOU HAVE NOT BEEN CALLED BY GOD TO RUN FOR ANYTHING.
Bree S. - You're right that he's got a strong sense of entitlement. Some of it is earned because he hasn't had a tough opponent yet and he's benefited from others taking care of his every need. This is his first real political test, but the mess is his own creation as Governor. He can't blame anyone other than himself for oversight of the Governor's Office of Economic Development.
I wouldn't credit Rounds with the capacity to pull himself out of a train wreck of his own devise, but I don't think his campaign manager is so foolish as to spend the next 12 months answering questions around the mysterious death of Mr. Benda and the high finance schemes surrounding the beef plant, the mega-dairy operations and the clic of pals and political appointees involved in get rich schemes during his administration.
R: link weirdness! I apologize. But John, ding ding ding! Good reading!
Section 14 says:
"14. SDRC shall maintain such books, records and reports as are currently or in the future required by CIS 8 CFR 204.6 or other applicable law, or as may otherwise reasonably be required by DTSD [Department of Tourism and State Development; now GOED]. SDRC shall provide true and correct copies of such books, records and reports to DTSD as often as such books, records and reports are required to be provided to CIS, but in no event less often than monthly. SDRC shall provide DTSD or its designee reasonable access to SDRC's original books, records and reports such that DTSD can assire itself of SDRC's complaince with the record-keeping requirements contained in this paragraph."
I hate to argue with Tony Venhuizen on policy. He may be right to say that the GOED–SDRC contract does not permit the state to look at all of SDRC's records. But paragraph 14 gives GOED (and the Governor) the authority to look at whatever they "reasonably require." An audit to determine if any state money was misused seems perfectly reasonable.
And given that the Northern Beef Packers bankruptcy auction is coming up fast and that a lot of SDRC money went to NBP, it might behoove us to run that audit sooner rather than later. We might find information that would warrant going to the bankruptcy judge and moving to suspend any further bankruptcy proceedings until we straighten out where all the money went.
So it's not that they can't audit SDRC's books. It's that they don't want to audit SDRC's books, and they want people to believe erroneously that they would if they could. Got it.
What makes me mad is they've known about this whole eb5 thing for a long time. They know about his baggage. They knew conservative Republicans would refuse to support him. They could have let Noem run for the Senate seat, and my party wouldn't be in this mess right now. But no arrogant corrupt Governor National Security Risk had to have to the seat for himself.
Bree,
Governor National Security Risk?
Care to expand on that?
The way I look at is that any well known person that doesn't want this investigated real deeply has something to hide.
This is a note regarding a comment made by John T in his blog post and repeated here by Cory. I don't recall quoting Tony Venhuizen or anyone else about an audit. I think the statement was in another reporter's story.
As for SDRC providing reports to GOED/DTSD, there is reason to believe SDRC did that. I obtained a highly redacted version of what is believed to be the final SDRC report. I think an AP reporter subsequently obtained a copy of the same highly redacted version.
The report was the basis for my story and later an AP story about EB-5 investors shifting money from other projects into Northern Beef. The redacted material dealt with individual investors' personal information. The report was still enormously valuable because it showed the names of projects, the amounts raised, information about withdrawals and transfers, and information about a loan fund that was proposed but wasn't approved by GOED this year. I requested the report because I saw in the contract that SDRC was required to report to GOED.
Without that report's release, we might have never known that two EB-5 loan funds were blocked by the federal USCIS agency after the investors were gathered, and that the latest loan fund wasn't allowed at all by GOED.
say cheese.
Oops. Sorry Mr. Mercer. I've been following your work on this so closely that I slipped and made an attribution to you that should have been made to Dick Lammers of the Associated Press. I regret the error. I've made the correction on my blog. Cory I would appreciate it if you could correct your copy.
Oops redux. It's Dirk, not Dick, Lammers. I'm curious, Mr. Mercer, as to why receiving a "highly redacted version of what is believed to be the final SDRC report" should give you reason to believe that SDRC was providing reports to GOED/DTSD on a timely basis, particularly in light of Representative Tyler's request to the Governor's office for an independent audit that was summarily denied on the basis that the Governor's office didn't have the jurisdiction to order an audit. If those reports were being provided on the timely basis called for in the contract between DTSD and SDRC it seems to me that they are public documents that should be quite easy to access and produce for public inspection, even in a redacted format intended to withhold private and/or proprietary information.
Can do, Bob! You're doing enough work; we don't need to misattribute other quality investigation to you. I'll edit John's mention above.
Still chagrined over my flub--hope that you and Mr. Mercer note that early on in my blog I call attention to his "excellent" reportage on the subject.
Rick, I hope your assertions at 13:23 are correct, but I think that it is too early to think that, with the poor coverage by the media about these issues. Most people in this state, (and probably everywhere in the US) don't have the time to keep up with this type of incredulity on blogs. If it is not drummed at them every day or night on their TV news, they don't even know it is happening.
Wouldn't it be ironic if the same Mike Rounds who sneaked into the Governorship on the basis of mudslinging fest by two pretty decent Republicans in the primary, Steve Kirby and Mark Barnett, because he, Mr Rounds was so squeaky clean, ended up bringing down the whole GOP of South Dakota 12 years later because he was/is not as squeaky clean as advertised?
It would appear to me that if the legislature and the governor are involved an illegal operation, then the information that supports that allegation should be submitted to the U.S. Attorney. No one can believe that if two government branches out of three are corrupt, that an honest hearing or investigation can happen within the state. If there is murder and intrigue in Pierre, than the U.S. Justice Department needs involved, not the newspapers or blogosphere, Mr. Mercer and Cory should take their suspicions and evidence there not here.
joseph g thompson,
I can't believe you just said what you did!
Do you not believe in the value public opinion or the role of the 5th estate in our Republic?
Newspapers, the blogosphere, tv and radio all need to be involved in this investigation to propel a federal and state investigation, which is ongoing as I understand it.
The problem right now seems that the citizens of South Dakota are not getting enough of the facts and when we do get them, they are often skewered.
A thank you should go to Cory, Bob Mercer, Dirk Lammers, and others trying to sort through this scandal of scandals.
uh: DoJ is involved, folks.
Watertown:
http://www.keloland.com/newsdetail.cfm/undercover-sex-sting/?id=155589
"Gov. Dennis Daugaard and Attorney General Marty Jackley say they see the report as an opportunity for improvement. U.S. Attorney Brendan Johnson cautions against reading too much into the rankings. He says state and federal law enforcement work together closely in South Dakota, and any state-level trafficking cases are prosecuted under federal law, where the penalties are more severe.
http://gowatertown.net/pages/17070358.php?
http://watertownbenedictines.org/outreach/world-human-rights/human-trafficking/
Again, Roger addresses Joseph's concerns well. We cannot take concerns about corrupt government solely to the government. We must also stake some of those claims in public awareness. The more people who know what's going on, the more chance there is that public pressure will weaken that corruption. We must bring all weapons of democracy and civil society to bear.