My inbox lights up with a campaign fundraising e-mail from fake Libertarian candidate for attorney general Chad Haber. Short form:

  1. Haber touts his wife's disastrous, money-gobbling, law-breaking Senate campaign as a reason to send him money.
  2. Haber shows his irrelevance to the GOED/NBP/EB-5 debate by treating as news the predictable excuses Northern Beef Packers lawyer Rory King gave to Bob Mercer back in December 2013 for Benda's diversion of Future Fund Grant #1434.
  3. Haber calls me (well, not personally, but the blogs and the press in general) lazy and afraid of the truth. (Lazy? Chad, remind who here has a job and who doesn't.)

The only part of Haber's pitch worth mentioning lies at the bottom. After Haber signs off with his beg line, the e-mail displays this footer:

Life and Liberty Group - 640 E. St. Patrick Street, PO Box 866, Rapid City, SD, 57709, United States

Life and Liberty Group... that's Gordon Howie's company!

I called Howie and asked what the presence of his company's name at the bottom of Haber's campaign e-mail means. According to Howie, Life and Liberty Group sent the campaign e-mail to addresses on its e-mail list at the request of someone promoting the Haber campaign, with a promise to pay Life and Liberty Group for that service. The e-mail does not say who is paying for it.* Howie did not name the client, but he says he is confident that Life and Liberty Group will receive payment for this service. The monetary value of that service will appear, of course, on Chad Haber's pre-general campaign finance report.

Howie said the Life and Liberty Group e-mail list is available for rent by almost anyone. Howie says his company has turned down some e-mails, but he is willing to do business with the Marty Jackley campaign and the Madville Times, not to mention far less shady characters.

Howie emphasized that the e-mail included and constitutes no endorsement of Haber by the Life and Liberty Group or by Howie's Independent Senate campaign. Howie says he does not plan to endorse any candidate in any race.

There have been prior inkles of collaboration between Haber and Howie. I asked Howie what relationship he has with Team Haber-Bosworth. "We are friends with a lot of people that frankly would amaze a lot of the public." Howie cites his own video series with me last spring as an example of his ability to build positive relationships with people of all sorts of worldviews (there's a campaign pitch in there somewhere).

Howie confirmed that his Senate campaign paid Haber-Bosworth's paid spokesman for some consultation and media production. However, Howie says that engagement was "terribly insignificant" and nowhere near the level of engagement between that spokesman and Bosworth and Haber. We will see that insignificant payment on Howie's Q3 FEC report.

Howie says his relationship with the Haber campaign is purely business, no different from the relationship demonstrated by the presence of ads from former Republican Senate candidate Stace Nelson and current Independent gubernatorial candidate Mike Myers on this liberal blog.

Now let's just hope Howie doesn't have to take Haber to court to get paid.

Update 17:23 CDT: No "Paid for by..." statement? That seems odd. The Secretary of State says all candidates are supposed to "Display or clearly speak the statement: 'Paid for by (Name of political action committee)' on any printed material or communication. This disclaimer is not required on buttons, balloons, pins, pens, matchbooks, clothing, or similar small items upon which the inclusion of the statement would be impracticable." Does printed material include e-mail?

If this e-mail was arranged by an independent expenditure promising to pay $100 or more (and Gordon, you're nuts if you didn't charge that much), the source may want to review the following part of state campaign finance law, which does not distinguish between print, electronic, or other communications:

Any person or organization that makes a payment or promise of payment totaling one hundred dollars or more, including an in-kind contribution, for a communication which expressly advocates for or against a candidate, public office holder, ballot question, or political party shall append to or include in each communication a disclaimer that clearly and forthrightly:

  1. Identifies the person or organization making the independent expenditure for that communication;
  2. States the address or website address of the person or organization;
  3. States that the communication is independently funded and not made in consultation with any candidate, political party, or political committee; and
  4. If the independent expenditure is undertaken by an organization not including a candidate, public office holder, political party, or political committee, then the following notation must also be included: "Top Five Contributors" followed by a listing of the names of the five persons making the largest contributions to an organization during the twelve months preceding that communication [South Dakota Codified Law 12-27-16].
4 comments

The arrogance continues. Joop Bollen wants to hide his activities as a state employee behind the façade of his private corporation, yet he demands the same deference as the highest state employee in South Dakota.

On August 21, 2014, Senator Larry Tidemann (R-7/Brookings), chairman of the Government Operations and Audit Committee, sent a letter inviting Bollen to attend GOAC's September 24 meeting. "This is not a subpoena," Senator Tidemann emphasized.

Since you were instrumental in the development of the EB-5 program in South Dakota, I believe a presentation by you of the chronology and details of the operation of the program would be beneficial to the Committee [Senator Larry Tidemann, letter to Joop Bollen, 2014.08.21].

For 18 days, Bollen remained silent. Then he had his lawyer and EB-5 confederate Jeffrey T. Sveen pen this response:

As you know, Mr. Bollen operates a private business, SDRC, Inc, which until recently administered the EB-5 Program in South Dakota. Due to the nature of the EB-5 Program, SDRC, Inc. is obligated to maintain appropriate confidentiality. SDRC, Inc. has previously provided information to government authorities when requested to do so. As the Committee is aware, an audit by the State of South Dakota has shown that all funds administered by SDRC, Inc., were properly applied.

The press has published many inaccurate and misleading articles about the EB-5 Program. Mr. Bollen does not desire to participate in the political and media frenzy which has surrounded the actions of NBP and GOED personnel. Therefore, Mr. Bollen respectfully declines your invitation to appear in front of GOAC. I understand the Committee has requested that former Governor Rounds and Governor Daugaard respond to written questions from the Committee. Please be advised that Mr. Bollen is open to the same approach to provide appropriate information to the Committee [Jeffrey T. Sveen, letter to Senator Larry Tidemann, 2014.09.08].

We need to break this down.

1. "Mr. Bollen operates a private business, SDRC, Inc,...." Bollen developed and administered the EB-5 program as a state employee from 2004 through 2009. Bollen was a state employee when he signed the January 2008 contract that shifted EB-5 to SDRC Inc.'s bailiwick and set the stage for exactly this kind of dodge of public scrutiny.

2. "Due to the nature of the EB-5 Program, SDRC, Inc. is obligated to maintain appropriate confidentiality." Who said GOAC would ask anything about confidential business matters? SDRC Inc. didn't exist until January 2008; why cannot Bollen answer the Legislature's questions about the development of EB-5 prior to SDRC Inc. and the state's side of interactions with SDRC Inc. after its formation?

3. "SDRC, Inc. has previously provided information to government authorities when requested to do so. As the Committee is aware, an audit by the State of South Dakota has shown that all funds administered by SDRC, Inc., were properly applied." It sounds like Sveen and Bollen are keenly sensitive to money questions that Senator Tidemann never asked in his invitation.

4. "The press has published many inaccurate and misleading articles about the EB-5 Program." Wait? Really? Like what? Joop, Jeff, call me. Help me clear up those inaccuracies. Or just come to committee and put those misleading articles to bed once and for all.

5. "Mr. Bollen does not desire to participate in the political and media frenzy...." Senator Tidemann is not inviting you to a political frenzy. He is inviting you to a hearing of a committee of the South Dakota State Legislature, to take questions from the elected representatives of the people who wrote your checks.

6. "...which has surrounded the actions of NBP and GOED personnel." Oh! Catch the blame shift! The "media frenzy" isn't about Joop Bollen and SDRC Inc. It's about people who worked for Northern Beef Packers and the Governor's Office of Economic Development! (I'm telling you, press Bollen, and he will turn on his former patrons with a vengeance to save his own skin.)

7. "Therefore, Mr. Bollen respectfully declines your invitation to appear in front of GOAC." Note that Bollen is not offering a legal reason for refusing a Legislative request to provide information about his activities as a state employee. The reason is purely personal. If I were a Legislative committee chairman, I would assert the superiority of the state's interest to Bollen's personal pettiness with a vengeance.

8. "I understand the Committee has requested that former Governor Rounds and Governor Daugaard respond to written questions from the Committee. Please be advised that Mr. Bollen is open to the same approach to provide appropriate information to the Committee." And finally, the ego trip. That deference you're showing the elected head of this state? I expect the same treatment. Kiss my ring, too, and I'll be "open" to answering your questions. 

Bollen has dismissed other investigators with the same arrogance. Now, Senator Tidemann, Joop Bollen is flipping that bird at you and at all the people of South Dakota. Senator Tidemann, on behalf of the people of South Dakota, I say it's time to stop taking that bird. He has given you no good reason not to accept your invitation to explain his activities as a state employee and contractor whose checks your appropriations bills wrote. Senator Tidemann, issue that subpoena.

23 comments

Senator Larry Lucas (D-26/Pickstown) smells conflict of interest in the Mike Rounds–Joop Bollen relationship. Recall that Joop Bollen quit his state job running EB-5 investment for the Governor's Office of Economic Development on December 21, 2009, then signed a no-bid five-year contract with Rounds's GOED to run EB-5 investment for the state through his private company SDRC Inc. the next day.

Senator Lucas has proposed an amendment to state law on conflict of interest that would make such a swift revolving-door deal illegal. SDCL 5-18A-17 currently prohibits any "state officer or employee who approves, awards, or administers a contract involving the expenditure of public funds or the sale or lease of property" (like Joop Bollen, from 1994 to December 21, 2009) from having "an interest in a contract that is within the scope of the officer's or employee's official duties." Lucas would extend that prohibition to remain in effect for one year after the interested party leaves state employment. The Government Operations and Audit Committee will discuss this proposed amendment on Wednesday morning, September 24, as part of its discussion of the EB-5 program.

The GOED–SDRC Inc. contract came one day after Joop Bollen quit his state job. It thus did not violate the statute Senator Lucas suggests amending.

But remember: the state gave Bollen's SDRC Inc. one earlier no-bid contract. On January 15, 2008, Joop Bollen, in his state job as director of the South Dakota International Business Institute, signed a contract giving SDRC Inc., the company he incorporated just five days earlier, authority to manage EB-5 activities for the state. That contract, issued by a state employee to a private company that state employee owned, violated state conflict-of-interest law as written.

The Lucas amendment deserves discussion. But Bollen-SDRC Inc. contract of 2008 deserves prosecution.

8 comments

Mike Rounds and the South Dakota Republican Party are having an awful time coming up with answers to the substantive charges of corruption surrounding Mike Rounds's economic development policies. Consider the latest revelations about misconduct under the Governor's Office of Economic Development and the frightened, deceptive responses from the flagging Rounds campaign.

Democratic lawyer Patrick Duffy stepped forward yesterday with a new charge against Rounds's EB-5 investment director Joop Bollen—securities fraud:

“Where was the state securities commissioner in all these LLCs and LLPs that were generating securities (the Bollen set up through the EB-5 program)?” Duffy asked rhetorically. “Most of this falls in our wheel house. It should have been investigated a long time ago.”

Duffy said the limited liability companies and limited liability partnerships that Bollen set up for projects were funded by EB-5 funds and were soliciting for investors. He says they should have been registered with state or federal regulators and prospectuses issued to potential investors [Todd Epp, "With Absentee Voting Starting Friday, South Dakota Senate Race Heats Up," Northern Plains News, 2014.09.18].

You can read my analysis of possible securities violations by Rounds's people in this December 2013 article.

Duffy reiterated the question of accountability that has bubbled to the top of the Rounds-EB-5 scandal. With so many violations of law, policy, and South Dakota common sense, why didn't Mike Rounds fire Joop Bollen?

As usual, the Republicans offer no answer to that question. They do not refute any of the charges of wrongdoing against Bollen. They do not refute that the Rounds Administration knew about Bollen's infractions. They do not refute that they rewarded Bollen after his infractions with a no-bid contract.

Instead, the Republicans blow smoke. Presenting no documents or direct testimony, Dick Wadhams, the out-state spokesman Mike Rounds recruited, shouts "sleazy" and "slimy" (oh, the irony) about an out-state PAC ad summarizing the Rounds-EB-5 scandal. Wadhams accuses Democratic Senate candidate Rick Weiland of campaign collusion with that PAC but offers no hard evidence. And still wishing for the campaign that wasn't, Wadhams tries again to drag Brendan Johnson into the Senate campaign, contending, not just without evidence but contrary to evidence, that there is no federal investigation of South Dakota's EB-5 activities. Knowing full well that a U.S. Attorney would violate the integrity of the criminal justice process by commenting on an ongoing investigation, Wadhams shouts that U.S. Attorney Johnson should comment on an ongoing investigation.

Noodling just a little closer to real issues at hand, SDGOP communications director Rob Burgess offers this helpless sputter:

Through it all Mike Rounds has been found innocent of any wrongdoing. Democrats are raising this issue because it’s quite simply the only thing that they have [Rob Burgess, quoted in Ben Dunsmoor, "SD Dems Want to Know Why Joop Bollen Wasn't Fired," KELOLand.com, 2014.09.18].

Burgess's bleat is non-responsiveness par failure-ance. "Found innocent"? In what trial? In what investigation? Democrats have laid out pretty specific evidence that Joop Bollen broke rules in carrying out Rounds's economic development policies, that the Rounds Administration knew about that rule-breaking, and that the Rounds Administration then rewarded the rule-breaker. Burgess answers none of those charges.

Burgess resorts to the "Democrats are saying it, so it ain't so" fallacy. Suppose Mike Rounds's enabling of Joop Bollen's corruption was all that Demcorats talked about for the rest of the campaign. That fact alone does not make what they are saying about Rounds and Bollen false.

Republicans need voters to believe that Democrats are playing from a light bag of tricks. But Democrats are presenting document after document, policy after policy, law after law, showing that something went very wrong in Mike Rounds's administration of economic development policies. The diversionary responses from Wadhams, Burgess, et al. make it look like it's Republicans who have no good answers in their bag.

9 comments
Mickelson Trail, South Dakota. Photo by Cory Allen Heidelberger, June 26, 2013.

Mica along the Mickelson Trail, heading up and south from Hill City toward Crazy Horse

Kevin Woster notes that the Mickelson Trail is drawing some positive press for the Black Hills. Bicycling includes the Mickelson Trail on its list of the ten best car-free bike paths in the country:

Fat tires were created for adventures like this 109-mile rail trail in South Dakota’s Black Hills, known by the Lakota natives as Paha Sapa and “the heart of everything that is.” It’s a movable feast for the eyes as you pass ponderosa pine forests, prairie lands, rugged mountain terrain, grazing cattle, swimmable creeks, and rocky canyons, feeling with every pedal stroke that you’re traveling on sacred ground. Though the route peaks at 6,100 feet of elevation, it rarely exceeds a four percent grade [Lauren Matison, "Ten Best Car-Free Bike Paths in the USA," Bicycling, 2014.09].

Contrary to Woster's report, the cycling magazine doesn't explicitly rank the Mickelson Trail the best of the best; the Mickelson is just the first item to click in a list that includes the Trail of the Coeur d'Alenes in Idaho, John D. Rockefeller Jr.'s Carriage Trails in Maine, and (closest to South Dakota) the Katy Trail in Missouri. But I'll vouch for the Mickelson Trail's visual stunningness and geological and ecological diversity. It's the best bike ride I've ever had, solo and with my family.

2 comments

Last month I reported that Jackson County was refusing to set up an early-voting satellite station in Wanblee to allow locals to enjoy the same access to early voting as all other South Dakotans without having to make the long drive to Kadoka and back. The voting station wouldn't cost Jackson County a cent, as federal Help America Vote Act money is available to cover the bill. But Jackson County finds that plan too confusing.

The folks who run Jackson County are white. Kadoka is a mostly white community. Wanblee is a mostly Indian community. Get the picture?

Jackson County asked for it; now they've got it. Four Oglala Sioux voters from the Pine Ridge reservation have filed suit in federal court against Jackson County for violating Section 2 of the Voting Rights Act of 1965 and the Fourteenth Amendment of the United States Constitution.

Jackson County is probably toast. Other counties have established early-voting satellite stations to help South Dakota Indian communities overcome distance and poverty to access the same early-voting rights that the majority population freely exercises. Jackson County is standing in the way of free and equal exercise of basic voting rights. Perhaps they will have the good sense to avoid further trouble and surrender to equality and democracy before a federal judge orders them to.

23 comments

A couple weeks ago, I mashed together some population and jobs numbers and calculated that South Dakota may undercount unemployment on our American Indian reservations by 57,000, or more than ten percentage points. Today I turn to some locally processed data for a much lower estimate the difference between white and Indian unemployment in South Dakota.

The Black Hills Knowledge Network provides a pile of great data showing the total Indian reservation population, youth percentage of the Indian population, the retirement-age population, and the percentage of working adults aged 16–64 on the reservations.

These data are not perfect; the charts don't provide the age breakdowns for the Lake Traverse and Standing Rock areas, so I've had to extrapolate based on averages from the other reservations. The numbers based on extrapolations are marked yellow below. Plus, the youth population numbers count all under age 18; the working adult counts include kids age 16 and 17.

But here's what I figure: subtract the kids and grannies and grampies from the total population. Multiply that by the given percentage of working adults for each locality to get the number of working adults.

Notice that the working-adult percentage for all of South Dakota is 76.3%. Across all reservations, the average percentage of working adults is 52.1%. So suppose the reservation populations were finding jobs at the same rate as the rest of us. Apply that 76.3% to the working-age reservation population, and we get the number of people who would be on the job if all things were equal. The difference between the actual working-adult numbers and that quasi-ideal state-mirroring number offers another estimate of how many Indians could be working but aren't because of disparities between the reservations and the rest of South Dakota.

%16-64 working # 18-64 working # 18-64 working
if SD rate app'd
IndDiff Guess Indian
unemp
Cheyenne River 54.8% 2,460 3,426 965 28.2%
Crow Creek 48.1% 523 830 307 37.0%
Flandreau 66.0% 169 196 26 13.5%
Lower Brule 54.9% 449 624 175 28.0%
Pine Ridge 42.6% 4,373 7,832 3,459 44.2%
Rosebud 46.8% 2,732 4,453 1,722 38.7%
Yankton 64.3% 2,133 2,531 398 15.7%
Lake Traverse 68.5% 4,113 4,581 468 10.2%
Standing Rock 46.6% 2,105 3,446 1,342 38.9%
Indian Totals 52.1% 19,056 27,918 8,862 31.7%
South Dakota 76.3% 377,584 377,584

My math finds 8,862 Indians on the reservations who could be working if job opportunities were uniform across the state. Add those 8,862 to the 16,555 whom state Department of Labor says are out of work across the state (and do add them, because I still don't think South Dakota is counting the reservations in unemployment data), and South Dakota's unemployment rate would rise from 3.7% to 5.7% at the snap of our statistical fingers.

A lazy morning hypothesis would suggest that the 57,000 I calculated earlier this month is an upper bound, while the 8,862 calculated here is a lower bound. Whichever number of mine you accept, if any, I will point to one more chart from the Black Hills Knowledge Network that should inform our economic development policy. According to their count, the difference between the percentage of white South Dakotan adults working and the percentage of our American Indian adult subpopulation working is 36.1% (higher than I calculate!), the highest white-Indian gap in the nation.

Any number you pick says South Dakota policymakers need to do more to bring employment parity to our reservation communities.

17 comments

One EB-5 investor could pay for a response two and a half times bigger....

Every Voice Action, a Washington D.C.-based super PAC formerly known as Public Action Campaign Fund, has launched a $200,000 ad campaign criticizing GOP Senate candidate Mike Rounds for corruption in his economic development program. I eagerly await the video, which is playing on KELO, KOTA, KDLT, and KTTW. The Pierre Capital Journal brings us the text; I annotate with my gauge of the accuracy of each shot:

  1. "It’s the Mike Rounds Citizenship-for-Sale Scheme." Error: The program sells EB-5 visas, green cards that make permanent residency possible, for $500,000 invested in a U.S. business project that produces at least 10 jobs. One does not get citizenship for investing in an EB-5 project.
  2. "It all started with an exclusive no-bid contract." ***CAH Correction! [21:56 CDT] Contextually incorrect, but factually true! The ad cites Ben Dunsmoor's August 18, 2014, report on the no-bid contract the Rounds Administration gave SDRC Inc. As I reported eight months earlier, that contract happened on December 22, 2009, well after the EB-5 scheme was already up and rolling and well after the director of that scheme had broken numerous laws and policies. However, the state issued another no-bid contract to SDRC Inc. at its inception almost two years earlier, on January 15, 2008. But we've only got 25 seconds of ad left! The point: Rounds Administration approved one no-bid contract, contractor broke all sorts of rules, Rounds Adminstration reward contractor with second no-bid contract.
  3. "Governor Mike Rounds gave his friend a no-bid contract to sell EB-5 green cards to the highest bidder." Closer: the only quibble here is that investors do not bid for EB-5 visas. In South Dakota, they all paid $500,000, plus tens of thousands of dollars in fees to Mike Rounds's friends.
  4. "Now, there’s half-million dollars unaccounted for…" Well, actually, we know where it went: Richard Benda's pocket.
  5. "...it’s under federal investigation..." True, says Senator Tidemann.
  6. "…and taxpayers are left with millions in EB-5 liability." True.
  7. "Mike Rounds. Rich foreigners get green cards. Cronies make a profit. And South Dakota … gets stuck with the bill.” True, although I get the impression South Dakota voters aren't moved by the rich foreigners line. Cronyism and money coming out of our pockets—now that will ring the bells.

That out-state players are willing to spend money on the EB-5 issue sends a grim signal for Republicans: beyond our borders, Mike Rounds is looking weak, and EB-5 looks like an issue that can whittle down his smaller-than-expected lead.

I just wish those out-state players would check with me first to vet their text and make sure they are focusing their precious 30 seconds most accurately.

Update 16:36 CDT: And here's the video:

53 comments

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