Last updated on 2015.10.18
U.S. Senate candidate Marion Michael Rounds isn't afraid to talk about the EB-5 visa investment program. He says South Dakota is so poor that we can't afford to do without it:
"Personally, I hope they continue the EB-5 program," Rounds, 59, said. "Because it's one more tool available. We don't exactly have a lot of capital in South Dakota."
...The fact that the EB-5 program helped build the Deadwood Mountain Grand, a Huron turkey plant, two power plants and multiple dairy operations shows the program has been successful, Rounds said [Joe O'Sullivan, "Rounds Defends EB-5 Program," Rapid City Journal, 2014.01.16].
Yes, we South Dakotans always have depended on the kindness of strangers. So much for Rounds campaigning on Daugaardian juche.
And in a challenge to those of us waiting for investigative shoes to drop, Rounds says he knew about the federal investigation of South Dakota's EB-5 program before the rest of us did:
Rounds, elected governor in 2002 and re-elected in 2006, said he offered in October to speak with federal law enforcement regarding EB-5. The offer, however, was not taken up, he said [O'Sullivan, 2014.01.16].
Feds not talking to Rounds; AG Jackley not talking to Richard Benda; what are you investigators thinking?
In related news, Independent gubernatorial candidate Mike Myers sounds willing to provoke some conversation about EB-5 mastermind Benda:
...Myers said he would promote industrial hemp and open government in Pierre, alluding to the closed investigation surrounding the suicide of former cabinet Secretary Richard Benda.
"You want that God dang autopsy report? I’m going to give it to you," he said [Jonathan Ellis, "Push-ups and Pink Floyd," that Sioux Falls paper PoliBlog, 2014.01.15].
Rounds is willing to defend EB-5; will any of his Senate challengers confront the issue as vigorously as gubernatorial candidate Myers?
You do not interview someone who is involved if you either simply do not trust them or if you do not want them to know if you are investigating them.
or you know they have no information to add to what you already know
DD just said on Bill Janklow's idea of public radio that the state will try to recover losses from Benda-gate from the Benda estate: is that news?
That would be protecting Benda's child, right Lar?
I'd say that's news... especially since I recall DD's man Venhuizen saying nothing technically wrong had taken place. Transcript?!
Interested party evidently "misheard" the governor's speech, for he never mentioned Benda, nor his estate. Among the various remarks the governor made concerning the investigation is this statement:
"My goals moving forward are three-‐fold: to continue to cooperate in any way in the federal investigation, to recover misappropriated state funds, if possible, and to use these extensive audits and reviews to find ways to improve our processes."
Complete transcript can be found on this web page:
http://sd.gov/governor/speeches.aspx
I'm assuming, naturally, that interested party is referring to the governor's state of the state address, which was broadcast on SDPB. Can you clarify that for us, interested party, or did the governor talk about Benda and his estate in a separate interview?
Interview by SDPB Radio today with DD:
http://listen.sdpb.org/post/governor-outlines-proposals-dakota-midday
State only going after the double-billed travel expenses.
I guess Jeff Sveen will represent the State.
Sid, David, confirmed! I just listened to the recording that Sid links above, of Daugaard's interview with SDPB's Karl Gehrke. Daugaard maintains his previously expressed position that there is no wrongdoing for the state to investigate on the Future Fund grant that became Benda's paycheck. Daugaard says the state issued the $1M grant on the condition that NBP produce receipts showing that it had bought and installed certain equipment. Daugaard says NBP produced those receipts. The money became NBP's at that point to do with as it wished, says DD.
Also newsworthy in the remarks that Rounds made defending the EB-5 program is where he says that he offered in October to speak with Federal Law Enforcement regarding the EB-5 investigation but was refused. He is fudging on his facts a bit. In fact, his remarks in Rapid City are a complete u-turn from what he was saying in October, 2013 when he would only respond through a spokesman. See David Montgomery's Blog:
http://politicalsmokeout.tumblr.com/post/65564699766/sd-under-investigation-week-after-officials-death
I will repost here the post I put on the online edition of David Montgomery's front page article in the print edition of this morning's Argus Leader, "Daugaard says he isn't withholding info on beef plant scandal" This article was at the top of the page of the online edition when I read it this morning and was posted on line sometime after midnight because it had today's date on it. By the time I got home at noon, it had been
archived, (very unusual for the lead story of the edition). Pressure from Pierre?
http://www.argusleader.com/article/20140116/NEWS/301160027/Daugaard-says-he-isn-t-withholding-info-beef-plant-scandal?nclick_check=1
I am trying to decide what it says to me, when a man is sworn in as Governor of the State on Jan 8 of 2011 after being in the Lt Governors job for the previous 8 years, and has tens of millions of dollars go out from his Office of Economic Development, and knows nothing about what is going on until the Feds open an investigation in March of 2013. He then also allows the State's 5 million dollar loan guarantee to be extended for another year. This is the same Governor who will not allow South Dakota to spend a million or so dollars to get medicaid coverage from the Feds for 48,000 South Dakotans who are poor and work but don't earn enough to afford health insurance.
Along the lines of what Lanny said, Governor Daugaard said on SDPB this afternoon that the state became aware of the double-dip travel expenses through the federal investigation. I wonder: did Jackley do any original investigating on his own? Or are the feds the only ones doing real detective work?
Sid, is Rounds signaling any serious change here? Is he signaling that he thinks the issue has no legs, that no more shoes are going to drop, and that he's ready to campaign hard against anyone who tries ot make hay of the GOED/EB-5 scandal?
I think Rounds is satisfied that he is not a likely target of the investigation which is ongoing. I also think that he has done significant polling and believes that he will prevail in spite of the scandal unfolding. I also believe that he knows that he is in for some rough riding on the campaign trail and will just have to endure it. By defending the program, he is actually making a smarter decision than trying to avoid or run away from it. After all, it did look good in theory.
One other note: DD in his interview today nearly disclosed that persons other than Benda are the subject of the Federal investigation and quickly retreated from that remark. The curtain is about to go up!
All they (NBP) needed to do was produce receipts, which they did, so it is ok? So that means they didn't need the money for "construction and equipment" as represented to "Signing" Mike (as in I'll sign that check). As if this somehow makes what happened justified. Still begs the question, why did NBP pay benda two years salary in advance? The catch 22 in this is mike and Dennis have to chose their poison - complicit or incompetent?
My opinion with the Rounds EB-5 statement is that he knows the NBP mess is going to be a topic (and probably a big topic)as the campaign season gets closer so this was the statement his campaign decided for him - start talking about EB-5, as a broader good for SD. NBP was just a minor glitch, the EB-5 program itself is a great program that has helped many South Dakotans. This will be the insurance salesman turned politician at his best, promoting a product - that EB5 product.
Oddly, in DD's comments what you didn't hear is "if additional thefts and abuse of any state or EB-5 money are found, I will direct Attorney General Marty Jackley to swiftly prosecute those involved".
The program is suppose to create 10 jobs for every $500,000 invested. Rounds fails to mention this in his interview. It can be safely assumed the program did not meet this requirement . Therefore the Rounds interview is nothing more than another one of his mis managed events.
but one day NBP will be one of the best, failed beef plant in the region
Just love that rationale. Here's an idea: mike, run for office when that happens.
You do not interview someone who is involved if you . . . just might be incompetent . . . or might be complicit in a cover-up
Sid, I noticed a conspicuously awkward "if" in Daugaard’s interview today, something like, "If there was a federal investigation...." Was that near the phrase that caught your attention?
Embracing EB-5 seems like a hubristic cry to "Bring it on!" Weiland, Nelson, Pressler, please oblige.
It has been several hours since I listened to it, but I think that the discussion just before that "if" referred to others being investigated. In fact, I think the "if" was part of the backing away from what was almost disclosed.
That is exactly what i have been trying to figure out Cory. What are they waiting for?
Sam, on jobs: remember that the USCIS allows regional centers to apply a crazy direct+indirect jobs multiplier that, practically speaking, results in EB-5 investment projects like NBP and the dairies to create just three permanent full-time jobs on site. I'm still puzzled over how NBP qualified its investors: the plant didn't get up and running within the two-year timeframe of the first round of 70 EB-5 investments. The opening in fall 2012 may have just barely made the two-year deadline for the second round of 90 investors. But 70+90 is 160, times 3 is 480... and NBP employed at max just a few over 400, for no more than a few months.
So out of curiosity, Cory, In addition to losing their 500k, were their visas rescinded?
Lanny, I'm not sure about that. I'll contact USCIS....
I am ultimately bothered by the states approach to economic development. Which is indicated by the story. The details of the EB-5 program are interesting and titillating.
However what upsets me the most is the states insistence that economic development be done by the large the rich.
It's clearly do not have the best interest of the people of the state in mind. Governor Round's statement that we are to poor and need the EB-5 program to go forward with our economic development is madening. How can we be both independent and in need of this sort of help.
That's the fundamental value conflict Toby is talking about: https://madvilletimes.com/2014/01/state-of-the-state-confuses-independence-or-handouts-the-south-dakota-value/
Mr. James,
Your comments go to the heart of much that is wrong with this state's approach to economic development. I share those concerns.
NBP was a go big plan, I like the idea of going big when it is warranted and well planned. Given the amounts of money in the form of grants from the state, investor dollars and the short time it was in business is an indication of incompetent planning. Our state's economic development professional should have seen this coming, and if they didn't see it, why not?
The amounts of money thrown at this project are just insane, if not criminal. The continued flow of money into NBP when the "professionals" knew it was failing gives all the appearance of a money grab. You know, "its not going to work, I'll skim what money I can now". That is exactly what happened with NBP.
When big business and big money come together there is likely to be financial abuse, concentration is placed on getting "my share" rather than finding a way to make this business viable.
It is past time the state looks at a more progressive approach to economic development or get the hell out of the business.
Well stated Roger, but I don't think the first option should even be available, when one looks at all of the failed projects the State has invested in, if not money per se, at least hours of our paid State employees. There may be an even bigger boondoggle coming up, in the form of the Dakota Natural Meats project.
Sorry, guess it wasn't clear that I'd heard the DD interview with Gehrke.
Lanny,
Additionally, the role both the state and federal governments is overreach and is eroding what we once knew as "American capitalism". True capitalism seems to be playing a smaller and smaller role in our economic growth.
The growth of main streets decades ago was built by mom and pop, the local banker, and the local community. Now people in small rural travel hundreds of miles to regional shopping cities to save money and have more of a choice.
When a government starts subsidizing business and industry with grants and low interest loans, the small town economies cannot survive. For some odd reason it is still called "capitalism" and our political leaders are proud of it.
Republicans are quick to charge that Medicare, Social Security, Obamacare, etc. are socialistic and are evil. However, they willing accept the fact that subsidizes to large business and industry, the oil industry, farmers and ranchers, the insurance industry are not socialism, just good business and are justified.
Sounds like 80% of the investment monies for EB5 comes from China. If it can't be borrowed,how do you borrow it?