John Tsitrian offers the best blogospheric summary of yesterday's noteworthy Legislative hearing on the Governor's Office of Economic Development and South Dakota's use of the EB-5 visa investment program. Tsitrian catches the two big bits of news to come from the the Government Operations and Audit Committee's four hours of testimony and questions:
- Three other federal agencies—the Treasury Department, the Department of Energy, and the Department of Housing and Urban Development—have joined the Department of Justice and FBI in investigating GOED's activities. Hmmm... is investigating too harsh a word? GOED chief Pat Costello says those departments have submitted "informational requests."
- The Daugaard Administration continues to preach irrational optimism with respect to Northern Beef Packers. Costello averred before the committee yesterday that the bankrupt EB-5 project is bound to bounce back, producing "a lot of jobs" and tax revenue within two years. Costello says the state has already recouped much of its $3.5-million investment in NBP through taxes on NBP construction, equipment, and operations.
Costello also continued the state's logical strategy of making dead and disgraced Richard Benda the fall guy for all that was ill and unholy in the GOED/EB-5 mess. (Cathy, are you sure you want to keep collaborating with a state to which Richard Benda is now nothing but easily exploitable damage control?)
The main policy response discussed yesterday, tightening the rules for state employees submitting vouchers for reimbursement, specifically targets Richard Benda's questionable voucher practices. The other, background checks for state employees, won't weed out decent guys who get into state government and then start misusing their power.
Rep. Kathy Tyler (D-4/Big Stone City) isn't on the operations and audit committee. But she says the committee and the rest of state government lack the will to get to the bottom of the GOED/EB-5 affair:
The big audit by the Department of Legislative Audit summarized major issues with SDRC, Inc, the EB-5 contractor, but nothing will be done. The committee was lead to believe that the state can’t look into SDRC, Inc.’s records, but according to their contract, it can. Also, the rules that the regional center must abide by are listed in a document that was not presented to the committee. It states that the regional center (our state) has oversight responsibilities for any project.
It’s a huge, horrible mess that I don’t think anyone in charge really wants to dig into, and that’s too bad. It’s a black mark on our state. The losers are the citizens of South Dakota and small business that lost in the bankruptcy; the winners are the managers and friends of SDRC, Inc., who have garnered millions of dollars from various aspects of the program and off the backs of hard working South Dakotans [Rep. Kathy Tyler, "Legislative Session #89, Week Eight," Kathy's Corner, 2014.03.08].
Rep. Tyler's pessimism finds support in the premature agnosticism of assistant majority leader and committee member Rep. Justin Cronin (R-23/Gettysburg), who says everything's fine, nobody's hiding anything, and we know all there is to know:
Republican State Representative Justin Cronin says any efforts by the committee to dig even deeper won’t result in new information.
“We haven’t started to correct the problems that were identified. And, I don’t know that we can dig far enough find a problem that is going to require us to call all these folks back and basically chew them out, which is some of the feelings I’m getting here today. That we have something that they’re hiding, and I don’t think anything that has been hidden here,” says Cronin [Charles Michael Ray, "State Government Committee Probes EB-5, GOED Audits," SDPB Radio, 2014.03.07].
Rep. Cronin evidently was not paying attention to his own committee hearing: Tweet-reporting live from the hearing, David Montgomery said that the Department of Legislative Audit looked at "third-party documents" in its investigation of GOED and EB-5 but signed confidentiality agreements, which by definition means somebody is hiding something.
The Government Operations and Audit Committee declined to set a date for another meeting. But Senator Larry Lucas (D-26/Mission) said he'd like to hear from big EB-5 player Joop Bollen. Sen. Larry Tidemann (R-7/Brookings) said eliciting testimony from Bollen "may require a little bit more than a letter of invitation." Let us hope we get at least one more hearing to test Bollen's willingess to speak.
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§ 2-6-6. Refusal to testify or produce evidence before Legislature as misdemeanor.
Any person who, being present before either house of the Legislature or any committee thereof authorized to summon witnesses, willfully refuses to be sworn or affirmed, or to answer any material and proper question, or to produce upon reasonable notice any material or proper books, papers, or documents in his possession or under his control, is guilty of a Class 2 misdemeanor [South Dakota Legislature, Joint Rules, Eighty-Ninth Legislative Session, downloaded 2014.03.08].