South Dakota's governor has exclusive control over the Future Fund, a pool of economic development cash funded by a portion of every South Dakota business's unemployment taxes. Sometimes Governor Dennis Daugaard uses the Future Fund for good (if you think focusing on job skills over Shakespeare is good). Sometimes he uses it for pure corporate welfare.

Now Pierre reporter Joel Ebert suggests that Governor Daugaard may use the Future Fund to reward his campaign donors:

Gov. Dennis Daugaard has received thousands of dollars in campaign contributions from affiliates of companies that have been recipients of grants overseen by the governor’s office, an investigation by the Capital Journal has found [Joel Ebert, "Daugaard Receives Donations from Future Fund Recipients," Pierre Capital Journal, 2014.03.13].

Ebert points to three companies—Dakota Resources, Pergroup, and Lawrence and Schiller—that have received Future Fund grants and whose owners or officers have contributed to Daugaard's campaign fund.

See who's gotten Future Fund grants from Governor Daugaard (PDFs):

Sensing Illinois-style politics (you know, Daugaard did go to law school at Northwestern and work in Chicago for three years), Rep. Bernie Hunhoff proposed legislation this session that would have prohibited Future Fund grant recipients or other state contractholders (from contributing to their Pierre patrons' campaign funds. House Bill 1189, Rep. Hunhoff's no-pay-to-play bill, was defeated last month, predictably, along party lines.

Banning political contributions from folks with whom the state does business (in Hunhoff's case, big business: his bill blocked contributions only from folks who got grants or contracts worth more than $25,000 in one year) seems sensible... but it also poses a First Amendment problem. It is arguably unfair to make sacrifice of certain free speech rights (and yes, money is speech) a condition of doing business with the state. I can even imagine a Machiavellian twist to the pay-to-play ban: pass Hunhoff's bill, and a Republican governor could direct some contracts and grants to companies run by key Democratic donors, thus denying Democratic opponents access to those campaign dollars.

The potential for corruption is obvious. Can we find a constitutional way to prevent this corruption... and can we get a Republican Legislature to pass such a measure?

p.s.: In December 2011, Governor Daugaard ladled out two million dollars from the Future Fund to Northern Beef Packers.