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].
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.
At the very least Rounds is incompetent, Another reason to vote Rick Weiland for Senate.
Hey OWEN,are you conceding the republican primary to Rounds already?
How so Owen? His oversight followed the same plans that have been created all across this country and follow identical terms. Are you saying all state governors that follow this model are incompetent?
DB: You're wrong...Bob Mercer, in a story written earlier this week, reported how Daugaard tightened things up quite a bit right after taking office:
"The original 2009 contract required establishment of an expense fund and two indemnification funds that were intended to protect state government. The money was to come from portions of proceeds SDRC earned from its work. SDRC also was required to obtain $3 million insurance to protect state government.
That version of the contract required SDRC to file financial status reports, but it didn’t give GOED any control over the money in the three funds. The original contract was signed by Richard Benda, who was secretary of tourism and state development for Gov. Mike Rounds.
After Gov. Dennis Daugaard took office in 2011, he split the department into different offices and didn’t retain Benda. That in turn triggered the decision to strengthen GOED’s reach regarding the money in the three funds.
“In 2012, GOED leadership learned that no deposit control agreement was in place with SDRC and believed that this should have been done at the time the SDRC contract was entered into in 2009. They asked that SDRC sign these agreements as a consequence,” Daugaard spokesman Tony Venhuizen said Tuesday.
The changes prohibited the bank from releasing money from the accounts without written authorization from GOED."
"How so Owen? His oversight followed the same plans that have been created all across this country and follow identical terms. Are you saying all state governors that follow this model are incompetent?"
Still doesn't make it right DB. We're not talking about a lot of money and oversight should have been better
Rollin I'm not conceding anything. Just saying Weiland should win. Doesn't mean Stace can't defeat Rounds-hope he does
"You're wrong"
About what? Daugaard's "tightening" of the reins, so to speak, doesn't discount the fact that the SD system was initially created based on other state setups that utilize EB-5. If you are suggesting that most state models have this much control(what SD now has over the accounts) over the funds of a private entity handling these investor relationships, and SD went a more lenient route based on Round's decisions, I'd ask that you could support how you came to that conclusion. I fully believe this was originally designed based on what was working for other states, and may have evolved into something else, that which we don't know....yet...nor do we know who took it to an illegal level that would require a federal investigation....assuming something illegal took place....which means complaining about oversight prior to any formal accusations of wrongdoing is rather hilarious.
"Still doesn't make it right DB."
I agree. Now the question is, was Round's GOED leadership following what they thought was the right way, or did they purposely set it up to have less oversight compared to what other states have done? Hindsight is 20/20 so I don't think we can blame them if they were following what was explicitly done elsewhere. I think we are going to find out it is highly dependent on how honest the regional center is as compared to the similar issues in other states. Whether that activity was being promoted by our state leaders in a collusive manner.....we will find out soon enough....all assuming something illegal took place.
Dave's comments are an attempt to protect Daugaard at Rounds's expense.
The Party internal scrambling is already beginning. Those who are trying to save Daugaard from this mess are actually admitting, unintentionally, that no one should vote for Rounds to be our next Senator in 2014.... You can't have your cake and eat it too......
Cory, I thought you'd find this of interest. I did a quick research on MN and the EB-5 program. The MN state govt did a complete study on EB-5 and looked at other states before making recommendations on how to proceed with setting a regional center up. On a humorous note is pg 27 where they studied the SD EB5 program and then on the last page where they summarized that it would take 18-24 months before MN could have a regional center set up. Didn't SD regional center set up just take one day? Rounds and Joop wanted those investor funds fast and quick like a dog running for his bone.
http://mn.gov/deed/images/EB-5_Whitepaper2.pdf This is the MN EB-5 study. Note everything is transparent for Minnesotans to educate themselves on what the heck EB-5 even is.
Hold on, Jenny. It looks like Minnesota did that study in 2012. So are you telling me that Minnesota hasn't really used the EB-5 program? They're enjoying higher wages and more Fortune 500 action and better public services without selling green cards the way South Dakota is? How can that be? ;-)
I do like the way Mr. Bollen, or Joop to his friends, sports that double breasted pinstripe. Is that a gold chain he has lost amongst his chest hairs? Both of those gentlemen could have used a good haircut before that photo was snapped.