Marion Michael Rounds says he didn't read the contract, but David Montgomery writes that Rounds signed off on the plan to turn South Dakota's EB-5 visa investor program over to an insufficiently supervised private operator Joop Bollen:

Then-Gov. Mike Rounds signed off on decision to give the EB-5 program to a private contractor. He said it was a strategic decision to separate the state from marketing the projects to investors and overseeing the financing, since the EB-5 money was from private donors going to private companies [David Montgomery, "Beef Plant: Recruiter Didn't Seek State Approval," that Sioux Falls paper, 2013.11.07].

Crockett and Tubbs—er, SDRC exec Joop Bollen and former Governor M. Michael Rounds

Crockett and Tubbs—er, SDRC exec Joop Bollen and former Governor M. Michael Rounds

Bollen previously did his EB-5 work at the South Dakota International Business Institute under the aegis of Northern State University. But NSU president Jim Smith says Bollen's EB-5 work was too far removed from the school's academic mission to keep it on campus. Bollen had already incorporated SDRC Inc. for the purpose of taking over the functions of the official South Dakota Regional Center, the agency authorized by the U.S. Customs and Immigration Service to conduct EB-5 visa recruitment and investment. When Governor Rounds let his pal Bollen take EB-5 private, he gave Bollen free rein to handle millions in foreign dollars:

By the time Rounds’ successor as governor, Dennis Daugaard, took office, the state had very little role overseeing SDRC.

For one thing, three bank accounts run by SDRC for the purpose of paying potential legal bills and other expenses by state officials didn’t have a standard legal agreement giving South Dakota control of them. At Costello’s request, Bollen signed a deposit account control agreement in August 2012.

Costello also found out that SDRC was recruiting investors for new EB-5 projects.

“We became aware there were some projects that Joop was working on that we hadn’t technically formally approved,” Costello said.

That was a problem, because SDRC’s contract with the state provided that “SDRC may not begin promoting a project for (the state) without first obtaining (the state’s) written consent” [Montgomery, 2013.11.07].

That private status also let Bollen dodge public scrutiny. Contacted in 2012 by a lawyer investigating the EB-5 program and asked to submit information under South Dakota's open records laws, Bollen said, basically, buzz off:

I am in receipt of your e-mails and letters requesting information regarding the EB-5 program. The information you are requesting is confidential business information and is not subject to disclosure under the authority which you have requested it [Joop Bollen, e-mail, 2012.06.27].

Pressed on his claim that he could work for the state yet keep such information secret, Bollen sniffed back, "I am very busy with my projects at the moment and would prefer not to be distracted."

It's one thing to get snooty with snoopy lawyers seeking information. It's another to scoot out from under the scrutiny of the state government that has authorized you to handle millions of dollars in a government-authorized program.

And Governor Mike Rounds signed off on giving his friend Joop Bollen that kind of unchecked authority.