EB-5 czar Joop Bollen's response to the Government Operations and Audit Committee's inquiry into his activities on behalf of the State of South Dakota is rich with innuendo, insult, and absurdity. The greatest absurdity packed into his literary fabrication is the suggestion that he intended his private corporation to be a revenue stream for the state and that the state willingly let that revenue stream go.

Recall that Rep. Kathy Tyler (D-4/Big Stone City) charged in September that when Bollen used his state authority to sign a contract with his own newly formed private company, SDRC Inc., in January 2008, he laid the ground work to divert EB-5 administrative fees into his own pocket. Rep. Tyler said that scheme ultimately defrauded the state of $140 million. Other estimates have placed the fraud figure at $120 million.

Amidst all the defenses of EB-5 offered by Mike Rounds and the South Dakota Republican Party during this year's Senate campaign, none of Bollen's protectors ever pushed back on that charge. Now Bollen himself, in a well-thought-out and long-delayed explanation, confirms the mechanism that Rep. Tyler outlines: the state, through its SDIBI office at Northern State University, could have kept control of SDRC Inc. and put more money in state coffers; privatization sent that money into Bollen's hands. Says Bollen in his November 10, 2014, letter to GOAC:

Also like NPII [Northern Plains International Incorporated], SDRC Inc. would create a fund of monies for NSU to use [p. 5].

...my initial intention for SDRC, Inc. was to create and income stream for SDIBI... [p. 8].

...taking SDRC, Inc. private was never my intention but rather it was supposed to create an income stream from FDI [foreign direct investment] activities for SDIBI just like NPII did in regard to export promotion [p. 9].

Bollen confirms Tyler's statement that recruiting and managing EB-5 visa investment activities could have provided the state with direct revenue—not just increased sales and property tax revenue down the road from businesses boosted by EB-5 money, but up-front fees from investors paid directly to Pierre.

That claim (and if Kathy Tyler and Joop Bollen both make the claim, are we ready to call it fact?) leads us to the 140-Million-Dollar Question:

What would motivate the State of South Dakota to give up a multi-million-dollar revenue stream?

Bollen says legal liability motivated that self-denial. Run SDRC Inc. honestly, write clear contracts with everyone you deal with (unlike Bollen, who's off-book operations brought us the Darley litigation), and there's no more liability to running EB-5 than there is to running public universities with dangerous chemistry labs and dormitories with slippery shower floors. The Darley litigation cost the state $510,000 over five years; keep SDRC Inc.'s functions under state control, and EB-5 pays its own lawyer bills and leaves millions for ongoing teacher pay raises (oh! Ha ha ha! Hee hee hee!) or road work or rebates for South Dakota taxpayers.

Politics could motivate South Dakota to turn down real money. Governor Dennis Daugaard rejects $250 million a year from Medicaid expansion because he doesn't want to help President Obama and those darn poor people who need to stitch some bootstraps to their bare ankles. But in 2009, EB-5 has no political component. Governor Rounds believes his EB-5 idea and his man Bollen are great for South Dakota. EB-5 boosts the budget without taking a dime from any South Dakota taxpayer.

We're running out of rational options.

Board of Regents executive Jack Warner told GOAC yesterday that they didn't fire Bollen because they needed Bollen's testimony to fight the Darley lawsuit. Perhaps privatizing EB-5 to SDRC Inc. was just a big carrot to keep Bollen cooperating. But why couldn't we use the stick? Pull Bollen out of his NSU office on February 1, 2009, hand Bollen his pink slip and a subpoena, declare SDRC Inc.'s agreement with the state null and void based on Bollen's lack of authority to sign that contract, and run EB-5 as the state revenue stream Bollen said it was supposed to be. By 2009, the state should see Bollen (and I think new NSU President James Smith saw Bollen) as an arrogant ass who is throwing around state weight that's not his to throw. If I'm in charge of South Dakota, I shut Bollen down. We don't need Bollen!

Or do we?

Or, more to the point, does somebody need Bollen to bring in the EB-5 money privately and use it for something more appealing than propping up the state general fund?

Let's just say it: privatizing EB-5 and denying the State of South Dakota millions of dollars is a bad idea. The most rational reason I can think of to let Joop Bollen deny the state millions of dollars is that I might get a cut of that money.

I invite alternative explanations. But when I add Joop Bollen's statements to all the stories we've been told about EB-5, I come to the conclusion that the most logical explanation on the table is that someone was on the take.