As the Democratic Senatorial Campaign Committee adds the weird Northern Beef Packers–Epoch Star offshore funding deal to the pile of stinky EB-5 business on Mike Rounds's doorstep, Denise Ross adds another shady player to the game: Maverick Spade.
No, Maverick Spade isn't the stripper at young Mrs. Joop Bollen's bachelorette party. It's an asset management company, run by Myung-Kyu David Kang, that played some role in facilitating the $30-million bridge loan from Epoch Star that kept Northern Beef Packers afloat in summer 2010.
Why Northern Beef Packers needed yet another mystery company reaching into its cookie jar is anyone's guess. But the loan agreement between NBP and Epoch Star handed out a lot of cookies. Section 5.7 entitled Maverick Spade to a $2.5 million "success fee." Maverick Spade and Northern Beef Packers apparently didn't enjoy a successful relationship; on July 17, 2010, they signed a settlement to resolve an ownership dispute that says NBP would pay Maverick Spade $950,000 in addition to $300,000 already paid. (Ross says Maverick Spade ultimately received $950K, but my reading says that amount is in addition to the previous $300K. I invite correction.)
Tucked into the NBP-Epoch Star loan agreement (Section 2.6) is another $240K in gravy (sorry, "placement fee") for Quintus Asset Management Limited, a Cayman Islands firm that appears to be related to Quintus Investment Management (HK) Ltd., which operates from the same Tower 1 of the Lippo Centre in Hong Kong that Epoch Star listed as its address.
Maverick Spade got $1.25 million, Quintus got $240K, all for a loan that only paid NBP $3 million. Do you see why Northern Beef Packers took five years to build and went bankrupt in nine months?
Bits and Pieces:
- Northern Beef Packers and Epoch Star signed their loan agreement on March 18, 2010, three and a half months before the South Dakota Banking Commission ruled that Epoch Star was not a bank and did not need to open its books for a lending license application or pay bank franchise tax.
- Sections 4.5b subordinates all new liens to Epoch Star's claims. White Oak Global Advisors wrested the same subordination for its $35 million line of credit to NBP in September 2012. NBP secured $65 million in credit that shoved its EB-5 investors to the back of the line and ensured that if the plant went bankrupts, the middlemen and not the original investors would get whatever assets were left.
- Like the credit agreement that Joop Bollen imposed on Northern Beef Packers in November 2010, the NBP-Epoch Star deal forbade NBP from investing money in any foreign accounts. That stricture, Section 5.6, applied to new and outstanding investments. Funny that an offshore lender was interested in erasing all of its new American friend's previous offshore transactions.
MSNBC's Ed Shultz talked about South Dakota's EB-5 scandal on his show yesterday. I wish he had interviewed you instead of the guy from the Argus Leader who looks like a 14 year old kid. You have done more investigative reporting on this issue than all other South Dakota media outlets combined. Pardon my ignorance, what happens if Rounds is elected and the Feds get a backbone and indict our Senator-elect? I sincerely hope someone in a position of authority is putting all these pieces together.
SD, Daugaard then appoints a replacement, Jackley or one of his other cronies presumably.
Thanks, Tim. I thought the seat would go to the Governor's appointee, but wasn't sure.
If your Sinator elects gets indicted,whitey wingnut will protect his butt because he will be a valuable rubber stamp no vote against Obama.
This is the problem when single party rule is as deeply entrenched as it is here. Only the voters can change it and in most cases it doesn't seem like that will happen any time soon, for a variety of reasons. Take Rounds as a classic example, everybody in the state knows he's a crook, but a full 1/3 of them will vote for him anyway. Kinda sad if you think about it.
Naw Mike they will toss him to the side, they have plenty of rubber stamps that don't carry the baggage.
The more we find out about what happened with NBP, EB-5, severe cronyism, systematic cover ups, records being kept from the public and press, now the Board of Regents won't release the Bollen deposition I am surprised either the West, East Coast Mafia or some faction of organized crime and I mean the big boys have not moved into South Dakota. At least there could be a franchise since organized crime could be very lucrative here.
Jerzy you ain't got nuthin on South Dakota!
Remember, all the details of the NBP-Epoch Star deal have nothing to do with Mike Rounds, because Mike Rounds has told us he had no involvement with such "transactional details." Sure, the director of the Governor's Office of Economic Development, Richard Benda, went to the Banking Commission to encourage them not to tax Epoch Star's lending activity, but Mike Rounds had absolutely nothing to do with that, right?
Tim,you are probably right,but then the next clone will be an exact duplicitous dummy double down of the same freakin' joke whitey wingnut. My guess is wingnuts are dabbling in stem cell cloning and they are not using brain stem cells. More likely cells from a penile projection because they all turn out to be dicks.
Kevin Schieffer, Thune/Round's boy appointed to Board of Regents by SD governor, would be next appointed by governor to senator if Rounds won and was indicted. The same BORegents in today's paper says it doesn't want to disclose Joop Bollen's deposition in the California case that everyone would like to see. None of the public's business, nothing here-look elsewhere, trust us, we know what's best--a bunch of reporters and nosy people have no business lookin' over our shoulders.
SD Blue and Tim, I made that point prior to the Republican primary. I mentioned that DD had plenty of experience in that bait and switch deal as after Dustin Johnson was elected to the PUC in 2010, he appointed him to be his Chief of Staff, then appointed Chris Nelson who was defeated in the primary for the US House, to the vacated PUC seat and then of course Nelson ran for the seat in his own right in 2012, as the candidate with experience. See how it works? So Jackley or whomever can run in 2016 as the incumbent.
Is there any way a voter can track where the lobbyist firms in DC get their money to bundle for candidates...? On the surface, it looks like lobby firm "A" gets mass influx of cash from outside source "B," bundles that money through its employees to candidate "A" after taking a cut off of the influx. It doesn't appear that the lobbying firms have to report where they get their money from?
This opens the door to what I had suspected that the EB-5 money gathered here would be laundered through South Dakota projects with the intention of sending it to pals outside South Dakota and overseas. I strongly suspect that Maverick Spade is the tip of another iceberg in how Republicans normally do business in Pierre.
'Maverick Spade!' LOL, this story gets more like the Fargo movie hour by hour. Maverick spade....hahahahaha!
96Tears, having watched SD politics for sometime now, its obvious that the political scene is not as simple as Democrats Vs. Republicans. There appears to be establishment "Republicans" that have their fingers in the dirty schemes we all are disgusted with, and who prescribe to whatever political course gets them and their friends ahead. I think it adds to the problems we have in our country when we lump good politicians, on either side, with the bad ones in their own parties.
Political stereotyping is not much different then race and culture stereotyping..
Someone wanted their money and that is why the short term expensive loans were taken out to cover that payout. The only way a ponzi scheme works is when there is a demand for moolah and it is complied with. In this case, it was complied with by off shoring the needed funds.
If Rounds is elected, what happens if the entire republican power structure gets indicted? As this unfolds, it seems that the entire executive group, along with the legislature and the judicial, are all culpable to this massive fraud. Who would be in charge of the state if they all go to the hoosegow? What hedge fund would we have to borrow from to pay the losses this ponzi scheme created, Maverick Spade perhaps?
Disgusted---how right on you are. Good post!
This EB-5 story just gets more incredible everyday and the question that keeps resonating with me is, who was minding the damn store?
I've been in a few manufacturing and business start ups and the first goal is to get the business open for business, you use your start up capital for that purpose. Personal financial sacrifices are made to get the doors open and start tending to business.
All the players in this Ponzi Scheme, yes Jerry you are correct, were more interested in playing money games than in running an actual business.
The board members and management team of NBP apparently had no idea what they were getting into, or did they? Have we heard from them?
For all the money laundering going on, they should have opened a Laundromat
Where are the books on the construction of NBP? Experts say it cost 30-50 million more then it should have. We have this offshore fund put money in which benefited a California company, that says itself is an expert in EB-5 business.
They raised a boat load of money through EB-5, got a few more millions through the state, yet didn't pay their bills and couldn't start production?
I have asked the same question JoeBoo, who paid the 2% to the state for a contractor's excise fee and more importantly, did anyone? What about workmen's comp?
DD, here's the deal. Which Republicans elected to Pierre or on the GOP State Central Committee do you see making some noise about the corruption we learn about every day in the news? If you count Steve Hickey's circle, please review the language he couched his concerns in. He was worried primarily about the infection from the GOP Governors he serves from spreading to the sycophants in Pierre, like himself.
Go to a GOP county party meeting, a state central committee meeting, their state convention or (they won't allow the public in, but maybe you've got pals on the inside) the GOP House and Senate caucuses in Pierre. It's all about the GOP brand and strict loyalty. Since the primary, I haven't seen anything from Rounds adversaries because they're back to helping promote the brand despite mountains of evidence of corruption in both the Rounds and Daugaard administrations.
I'm not saying all Republicans are corrupt, but the elected Republicans in Pierre and their flunkie political appointees are a major part of the corruption. They can be part of the solution, but name five people out of hundreds who've stepped out of line for the sake of protecting the public trust in the worst political scandal in state history.
The stupidest lie is "somewhere in the middle lies the truth." And yes, there are corrupt Democrats and independents in this nation, but you won't find them in Pierre, DD. If you want a solution, you will have none unless they change the brand in Pierre ... and then chase the Democrats out after a while when they get caught. But tell me what corruption was discovered about the Kneip Administration before Bill Janklow took over.
For 36 years, there has been only one brand in charge in Pierre, DD, and do you see what you get? If Daugaard gets a second term, it will be four decades of no changes, no challenges and no new ideas. The parasites will return to their feasting and the public will go back to sleep.
It's like they say, politicians need to be changed like a baby's diaper, and for the same reason. In Pierre, that baby's diaper hasn't been changed for 36 years.
There it is!
South Dakota Democratic Party's brand positioning statement.
Bravo and thank you 96Tears!
_____________
"Politics need to be changed like a baby's diaper, and for the same reason.
South Dakotas's diaper hasn't been changed for 36 years.
This year, vote for the Democrats."
_______________
Roll out the creative SDDP!
15 seconds TV: Start sweet.
Beautiful sunlit nursery footage of baby getting its diaper changed. Goos and coos and chuckles. Final shot, rolled up diaper with GOP elephant logo going in the nursery trash can. Little nursery chime lullaby music playing in background. Warm, kind, friendly sounding announcer voiceover, almost whispering the script above...
(96, okay to use it freely?)
Bill, I am at once wanting to jump up and down, high five a stranger and openly weep at this ad concept!
It works up and down the ballot!
What would it take to get this on the air and over the internet?
Jana, $5-7K to shoot, edit and sound design the spot (it has to look and sound really good) and an army of social networkers to make it go viral. Try to get the news channels to pick it up. Have the candidates disclaim and run it on local cable and network broadcast to avoid the political rate. $200,000 placement budget would be a good start. Just spitballing.
Paging Dr. Crago...paging Dr. Crago. Please report to the operating room stat.
Hey Zach, make this happen!
Cheezis K. Reist! Somebody go back and git a boatload of Huggies!
It's got legs, I tell ya.
Donkey-brand Huggie handouts at rallies.
Make it happen!
LOL
Depends, people, Depends. These are adult 2 year olds.
LOL Francis, great! That's the second ad. These babies have been around so long they're now in Depends! Hilarious.
might work better with a cloth diaper and flushing the GOP down the toilet.
Think outhouse with Sears and Roebuck.
I think it is amusing that Rounds and his supporters, are using terms like "hope to open next year."
That tells me that there is not any proof that the slaughterhouse will be opened, no target date, nothing.
Any business that plans to open in the near future has an estimated start date.
I love the diaper thing! Way to go Madizens!
This blog should just form its own Super PAC so we can raise money and make these smashing ads. ;-)
Cory,
As I have said before, the Madville group should take over the SDDP and run 365 days a year and 24/7 as a real campaign.
Cory, If you can get 50 to 75 other Madvillers to contribute a like amount, you can count on me for 100 bucks.
Cory and Lanny, I will do likewise.
Boy, those last two posts really put an end to this conversation. How does the saying go? Put your money where your mouth is.
Count me in! Cory's blog has a lot of clout in SD. The other side is, I would say, rather scared and annoyed of him for his respectable detective work. His EB-5 reporting has been phenomenal and ranks right up there with the Argus Leader's reporting of it.
Hi Lanny, good to see you commenting here again.
@96Tears,
When you keep seeing names of legislators crossing party lines, against their best interests, to do the right thing? You have to realize they are not part of the problem:
https://madvilletimes.com/2013/12/legislature-again-stifles-eb-5-discussion-some-gop-share-dems-concerns/
https://madvilletimes.com/2013/02/stace-nelson-leads-bipartisan-protest-of-unconstitutional-appropriations-bill/
https://madvilletimes.com/2011/12/six-republican-legislators-gop-leadership-corrupting-legislative-process/
You are absolutely correct, Disgusted. That is why I am first disappointed in those same legislators for not coming out now and criticizing Rounds/Daugaard and the Republican legislative leadership and Attorney General for sweeping this issue under the rug and the Republicans on here ignoring it like it is nothing wrong. Secondly, that is why as a Republican, I am willing to put a hundred bucks in the pot to put this diaper ad forward. If it smells, it's time to change the diaper.
I understand, DD, and appreciate your point. This still boils down to a branding issue after 36 years of uninterrupted single-party rule. This corruption we see today is the result of that one-party, unchallenged rule. The Republicans have rigged the districts and the election process to make sure they remain in power. I see no Republicans in Pierre saying, gee, I wish there were more Democrats here so there'd be some balance of viewpoints and a shared responsibility for the outcome. And today, the GOP owns every statewide office except the U.S. Senate seat held by Tim Johnson. I think we've gone past "let's do this the nice way and just wait our turn" about two decades ago.
We will never change the outcome asking people to get rid of some selected rotten apples because the state GOP has mastered the art of rigging districts for so long that those rotten apples will remain in power for as long as they wish. If there is any hope for a two-party system to serve the public good, the Democrats need to push as hard as their opponents ... or harder to break through the public's blind acceptance of the status quo. In other words, stop bringing a knife to a gunfight.
Bill Fleming, You wrote, "Jana, $5-7K to shoot, edit and sound design the spot (it has to look and sound really good)"
Is there enough time left to get that done if we were able to raise the funds?
Lanny, probably. At least the production. The trick would be getting airtime. The paid media buy would have to be done almost immediately. If you guys get serious, let Cory know, and I'll coach him on who to contact if you want me to.
Bill, Cory et al., If time is as short as it seems, perhaps someone with contact to RW or Wismer, would be the one to contact. Since RW just got that windfall from DC, maybe he would consider spending the money to further the party not just his own candidacy. I think that the "change the diaper" idea from yesterday might resonate with the voters, but by the time we could raise the money here, it would be too late to produce and schedule the commercial with any legs. In the meantime, I suggest passing the idea to others by any means that you can.
Mr. Fleming extends credit to worthy ad buyers, so I think he could still crank out an internet ad for you and you could pay him back in installments over the next 4 years of the Daugaard administrative time.
Hey Grudz, Go crawl back in your hole. It's not groundhog day yet.
Lanny, who knows? If they read Cory's blog and like the idea, maybe they're already working on it. Probably not though. I'm sure they already have very specific plans on how they need to spend their money.
Boy, I suppose the PACs have already bought up pretty much every free moment of air time between now and November 4. Perhaps we need to skip TV and go for radio... or maybe a traveling puppet show.