Republican U.S. Senate candidate Mike Rounds repeated in Thursday's SDPB candidates' debate that his EB-5 program brought over $600 million and over 5,000 jobs to South Dakota. Aberdeen attorney Rory King, who provided legal counsel to bankrupt EB-5 project Northern Beef Packers, says Rounds drew $400 million and created "directly or indirectly" over 8,000 jobs.

Journalist Bob Mercer questions all of these fat numbers being thrown around to distract from the malfeasance committed under Rounds's administration of EB-5. He reviews available data and concludes Rounds's and King's numbers are exaggerated at best:

There weren’t “over 5,000 jobs created.”

Instead, there might be just hundreds of new jobs, many of them in dairy operations in the I-29 corridor and at the casino complex in Deadwood.

And there might have been hundreds of jobs preserved — but that we really don’t know, at least not at this time [Bob Mercer, "Analysis: EB-5 Jobs Data Highly Elusive," Aberdeen American News, 2014.10.24].

Voters, Mercer comes to the same conclusion I came to last month from real South Dakota jobs data: there is no hard evidence to support the claims Mike Rounds is making about EB-5's economic benefits. In other words, voters, Rounds is telling you things that he can't prove are true.

Related Reading: Meanwhile, by Denise Ross's diligent calculation, Joop Bollen may have generated $13 million for himself in fees from running EB-5 through his private company while he was still on the state payroll and operating from a state-funded office in 2009. Stay tuned!

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Lawyers for Mike Rounds, Dennis Daugaard, and other subjects of Jeff Barth's legal action to stop destruction of EB-5 records filed their responses this week. The defendants contend that Minnehaha County Commissioner Barth has no standing, there are no records, yadda yadda.

Commissioner Barth's lawsuit is a legal longshot. But it has already produced some results worth discussing. First, Assistant Attorney General Roxanne Giedd says she has issued litigation hold letters to state agencies that may have records related to the state's EB-5 program. That means that, thanks to Barth's legal action, the Governor's Office of Economic Development, the Board of Regents, the Attorney General's office, and others will hang onto valuable information in the EB-5 case, which now stretches back ten years.

Northern State University counsel John Meyer tells the court that AAG Giedd's litigation hold isn't necessary to keep Regental docs locked up; he says that the Regents and NSU are already preserving documents related to EB-5 because of their ongoing litigation in Darley v SDIBI. Meyer issued a litigation hold to NSU chief information officer Debbi Bumpous after learning of the Darley litigation that EB-5 chief Joop Bollen had concealed from NSU for months. The Meyer hold went out on February 10, 2009.

Now let's slow down and think for a moment. A county commissioner files a lawsuit to preserve state EB-5 records. The AG's office immediately issues orders to preserve relevant state EB-5 records. Those orders likely go out to the offices directly involved with EB-5, including the Governor's Office of Economic Development.

In January 2009, the state found out Darley, a California company, had taken it to court over EB-5. NSU's lawyer sent out an order to his campus's computer gurus to preserve EB-5 documents, but NSU wasn't in charge of EB-5. Meyer says GOED ran EB-5. Meyer would surely have wanted GOED to hold any documents that could help him and the Regents fight off the Darley litigation. If Meyer lacked the authority to issue such a litigation hold to GOED, surely the attorney general could have issued that letter. Meyer corresponded with the attorney general's office about Darley in early February 2009, before issuing his February 10, 2009, hold order to NSU's CIO. An AG's office doing its due diligence would have joined Meyer in preserving all relevant documents, which leads to the logical conclusion that Jeff Hallem, the assistant AG corresponding with Meyer, would have issued a letter like Giedd's to GOED.

And if GOED got a litigation hold letter like Meyer's in February 2009, and if that hold is still in effect for GOED as Meyer's still is for NSU, then someone, somewhere, should have a thumb drive or tape or box of papers preserving any EB-5-related e-mails that GOED would have sent or received. That drive/tape/box would include the e-mails of then-GOED director Richard Benda.

Governor Daugaard's office said last month that it had deleted GOED Secretary Benda's e-mail account perhaps as early as February 2011, after Benda left state government.

By this reasoning, we may conclude either that Governor Daugaard's office misinformed us or that at some point in early 2011, the Daugaard administration erased e-mails that would have been subject to a litigation hold order.Meter's February 10, 2009, litigation order would have preserved any e-mails Secretary Benda sent to Bollen on the NSU servers. Whether Benda's entire e-mail archive is still available depends on the answers to these two questions:

  1. Did GOED receive a litigation hold order in 2009 pertaining to the Darley lawsuit?
  2. Did GOED follow that order?
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Yesterday was the deadline for South Dakota candidates to submit their pre-general campaign finance reports to the Secretary of State. Governor Dennis Daugaard and his running mate Lt. Gov. Matt Michels both have their reports in; so do Democrat Rep. Susan Wismer and Independent Mike Myers. (Myers's running mate Lora Hubbel has also reported, but her filing shows no money in or out.) Here are the totals that have flowed in an out of the gubernatorial campaigns over the last four months:

Raised Spent Cash on Hand
Dennis Daugaard (R) $702,918.35 $878,672.73 $1,460,323.18
Matt Michels (R) $70,616.26 $46,165.02 $24,951.24
Susan Wismer (D) $207,852.50 $238,716.93 $18,391.64
Mike Myers (I) $325.00 $3,688.10 $156.07

Note that Myers has contributed a few thousand out of his own pocket to his own campaign. The Raised numbers here reflect the dollar votes of confidence from others.

As one would expect, Team Daugaard is moneywise untouchable. Daugaard and Michels have $1.5 million on hand to paint every Interstate billboard with Dennis's checked shirt and Matt's manly mustache... or, more likely, to shore up fellow Republicans. Since June, Daugaard's campaign has poured over $143,000 into other GOP campaigns, including $100K to the South Dakota Republican Party, $10K for Shantel Krebs's Secretary of State campaign, and $18.5K for Republican Legislative candidates. (He also gave $250 to the Colton Volunteer Fire Department... perhaps to help put out the fire around Mike Rounds's EB-5 barn?) Michels has greased the state GOP with another $40K, plus a grand for Rounds for Senate.

The Wismer campaign, by contrast, has not been able to spread any such largesse to other Democratic candidates. Before building love with folks down-ticket, Wismer will need to pay off her dad: the $18K Wismer has on hand is less than the $25K loan Maurice Jones loaned the campaign. Dems, better turn on the spigot now to get Wismer out of debt and make that last get-out-the-vote push!

As for Myers... well, I hate to make this comparison, but financially speaking, in the last four months, this blog has outperformed the Myers campaign in numbers of dollars and donors. (Thank you, dear readers, for ringing that tip jar!) In other words, if fundraising means anything, this blog could mount a more effective statewide campaign than the Independent gubernatorial candidate.

9 comments

To make your raisin bran soggier, here is the East River Concerned Citizens postcard attacking Rep. Kathy Tyler:

East River Concerned Citizens attack postcard (front), October 2014

(click to embiggen!)

East River Concerned Citizens attack postcard (back), October 2014

(click to embiggen!)

ERCC PAC boss Spencer Cody continues the lie he began last March of calling Rep. Tyler a liar for daring to disagree with him on policy. Cody's own card is filled with lies:

  • Rep. Tyler actually voted for 2014's HB 1162 both times it came before the full House during the 2014 session. HB 1162 became law. The amendment for which Tyler voted on the House floor still said sex-selective abortions are wrong and against state policy.
  • 2014's HB 1180 did not require neutrality of "Pregnancy Health Centers." HB 1180 excluded organizations that provide adoption and/or abortion services from offering the state-mandated counseling. Pregnancy health centers are not neutral: state law empowers them to actively discourage abortion.
  • 2013's HB 1237 did not fix a loophole. Pre-1237, South Dakota's oppressive 72-hour waiting period was consistent for every woman seeking an abortion. HB 1237 created an exception forcing women to wait even longer if the waiting period included a weekend. The bill was a blatant ploy to punish women even further for seeking an abortion by maximizing the economic impact of having to take off work from regular shifts to seek this constitutionally protected medical procedure.

Given all these votes on the record, Rep. Kathy Tyler would appear to be perfectly "candid" and "up front" about her positions. Cody is implying that Rep. Tyler is a liar when she clearly is not... and when his own propaganda falls far from candor.

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In small ball, I notice that Spencer Cody has submitted a revised Statement of Organization for his attack PAC East River Concerned Citizens. I noticed this week that he failed to include the city in the physical address of his PAC, making it hard for interested citizens and journalists to contact his PAC and ask why they are spreading exaggerations and insults about Rep. Kathy Tyler (D-4/Big Stone City).

East River Concerned Citizens PAC, original incomplete statement of organization, 2014.09.14

East River Concerned Citizens PAC, original incomplete statement of organization, 2014.09.14

Quick like a bunny, Cody penciled "Hoven, SD 57450" into his address:

East River Concerned Citizens PAC, amended but still incomplete statement of organization, 2014.10.23

East River Concerned Citizens PAC, amended but still incomplete statement of organization, 2014.10.23

But Cody still left off the full address for his PAC's bank. The PAC's web address also leads nowhere, showing the East River PAC has twice filed an incomplete and evasive campaign report.

In big ball, Cody has filed his PAC's pre-general campaign finance report. So far, ERCC (yes, pronounce the acronym; it's appropriate) has spent $4,871 on advertising and $766.41 on printing. I assume that's the split between the bullying radio ad and the postcards Cody is sending to attack Rep. Tyler. (Postcards, but no entry for postage? Cody, do you need a campaign finance paperwork class? Or do you just need class?)

That's pretty much ERCC's whole kitty so far. It's donations came from four sources:

  • Harvey Jewett: $1,000
  • Rudy Nef: $1,000
  • Brown for Senate: $1,000
  • Codington County Republican Central Committee: $2,650

Harvey Jewett is the Aberdeen lawyer and Regent who's been implicated in the EB-5 scandal and who would have been in a position to keep the Board of Regents from paying attention to what the EB-5 program was doing on the Northern State University campus through December 2009.

Rudy Nef is chairman of the board at the Valley Queen Cheese factory in Milbank. Valley Queen runs on milk produced by area dairies, many of which were funded with EB-5 visa investment dollars.

Senator Corey Brown (R-23/Gettyburg) has consistently fought Rep. Tyler's effort to get the Legislature's Executive Board to discuss evidence of mismanagement and fraud in the state's EB-5 program. He blocked that discussion last month with the specious claim that the Legislature has no authority to discuss criminal activity. Senator Brown has also personally demeaned Rep. Tyler, insulting her expertise and research on EB-5.

Cody says in his statement of organization that ERCC's mission is "advocating traditional South Dakota values and economic growth." I get the impression the purpose is less the former and more the latter, as three of its four reported donors appear inclined to keep easy money like EB-5 flowing into their friends' pockets than in promoting traditional South Dakota values like honesty, open government, and civility.

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Here's one sign that Democrat Robin Page may beat Phil Jensen out of his District 33 Senate seat:

Campaign signs, one block west of Pennington County GOP HQ, West Main St., Rapid City, SD, 2014.10.22.

Campaign signs, one block west of Pennington County GOP HQ, West Main St., Rapid City, SD, 2014.10.22.

This photo comes from one block west of Pennington County Republican headquarters on West Main Street in Rapid City. We see the expected Republican signs for Daugaard, Rounds, Krebs, and Gosch. But we see no sign from the GOP incumbent Senator Jensen. Representing District 33 is Democratic challenger Page.

Remember that Senator Jensen drew disdain from his own party last spring for his hangup on social issues and his awkward commenters on racism. Senator Jensen only narrowly survived a primary challenge. Page is now working hard with direct mail and door-knocking to put Jensen out of a part-time job.

This vacant green hosts a couple other non-Republicans amidst the usual conservative suspects. District 34's GOP Rep. Dan Dryden has his sign up, but instead of fellow Republican Jeff Partridge, we find Democratic candidate Steve Stenson advertised. And from District 35, we get the strange mix of Tea-flavored spokesmodel Lynne Hix-DiSanto and Democrat Dave Freytag, with no visible sign from incumbent GOP Rep. Blaine "Chip" Campbell.

One would think every Republican in the neighborhood would want to get his or her name up next to the party leaders on that street and crowd out those pesky Democratic interlopers. But it could be that the Republican sign-minders down the street are sending a message to Jensen in tolerating Page's challenge.

35 comments

The early voting stations for American Indians in South Dakota aren't running too smoothly. Fall River County auditor Sue Ganje set up the Shannon County station in a five-foot-by-ten-foot entryway, making it hard to process all the Indian voters who were coming to exercise their Constitutional rights. Ganje's response (so I hear from someone who's been on the scene): those Indians need to exercise their Constitutional rights more slowly.

Auditor Ganje has also had the sheriff out to the polling station in Pine Ridge twice. Ganje says she received complaints that Indian voting rights group Four Directions, which has fought for years to establish early voting stations on the reservations, was coercing voters. Shannon County Sheriff Jim Daggett thus cruised out to see what the fuss was about. He found no fuss, of course, but take a moment to envision a sheriff summoned by a white county auditor to stand at the door of a polling place in front of American Indian voters. What was that you were saying about voter intimidation, Susan?

Enter the unlikely hero, Secretary of State Jason Gant. Our Secretary of State has fought these early voting stations, but yesterday, he evidently came to their assistance:

Four Directions officials were upset that the early polling place in Pine Ridge was set up in a small entryway. After complaints to Secretary of State Jason Gant, a new, larger polling place was found Thursday.

Bret Healy, a spokesman for Four Directions, complimented Gant for personally investigating and finding a new location.

“This was a public official doing the public’s business in a very admirable way,” Healy said [Jonathan Ellis, "Voting Accusations Fly in Reservation Areas," that Sioux Falls paper, 2014.10.24].

I find it hard to put Jason Gant and admirable in the same quote, but there they are. The Secretary can't tell the sheriff to stay the heck out of Pine Ridge, but he appears to be doing his job to make voting run as smoothly as possible for all South Dakotans.

Now if he could just straighten out Buffalo County, which has reneged on its promise to open a satellite voting station:

Commissioners last year said they would establish an early voting center in Fort Thompson if they could do so using Help America Vote Act money. Elaine Wulff, Buffalo County’s auditor, said the county has about $20,000 in HAVA [Help America Vote Act] money.

But Wulff said the commissioners didn’t want to use the county’s HAVA funds, but instead wanted to use state HAVA funds. When the state funds weren’t available, the commission decided not to open an early vote center in Fort Thompson.

“We’re really short of funds, and we could not afford it,” Wulff said, adding that it would cost the county about $200 a day.

But Healy said the county was treating its allotment of HAVA money as if it belonged to the county. He also criticized the commission for “changing the benchmark after the fact,” and he said the commissioners were not the type of people he would trust to buy cattle from [Ellis, 2014.10.24].

Buffalo County has HAVA money in its pocket, but it's refusing to use that money for it's intended purpose. Secretary Gant, maybe you need to swing through Fort Thompson on your way back to Pierre.

66 comments

Rick Weiland, Larry Pressler, Mike Rounds, and Gordon Howie "debated" on South Dakota Public Broadcasting last night to prove who ought to be South Dakota's next Senator. Here are the most important observations to come from the debate:

  1. Gordon Howie wins on points. He challenged Mike Rounds directly on EB-5, saying the former governor had brought the scandal upon himself by skipping debates and giving false information. He challenged Rounds to testify under oath on EB-5. Howie blasted Rounds for doubling the state budget and leaving a $127-million structural deficit. And Rounds ignored those points. Ignoring points usually means you lose a debate.
  2. Gordon Howie railed against "corruption" and "crony capitalism," yet he used the public airwaves to plug a private company. He joked that all the campaign ads were crowding out Taco John's commercials. Hmm... is Gordon making a deal for his own Schiefferesque cavalry cash from a conservative businessman and USD grad?
  3. Mike Rounds implied EB-5 is good, because it's a program just like Canada has (well, had: Canada decided the visa investment program doesn't pay off and canceled it this year). By that logic, Rounds should embrace single-payer health insurance.
  4. Weiland felt too restrained, especially at the beginnings of his responses, as if he was overplaying the humble country-boy image. I understand the psychology at play, but gentle aw-shucksery will not defeat the Rounds machine. Weiland did build fire in each of his answers, but beating Rounds requires pushing Rounds off his script and forcing him to answer questions. (Remember: Rounds has proven really bad at answering questions!) Blend Weiland's policy and Howie's relentless attack last night, and you keep Mike Rounds out of the Senate.
  5. Weiland does get points for blowing raspberries at Senator Harry Reid. Weiland said he will not vote for Harry Reid or Republican Senator Mitch McConnell for majority leader, saying both men have led the Senate into dysfunction. He cleverly challenged Rounds to make the same pledge. Rounds muttered about Reid but didn't mention McConnell.
  6. Weiland also gets points for common sense solutions. Weiland advocated Senator Tom Harkin's bill to eliminate the income cap on Social Security tax and get Bill Gates to pay for protecting Social Security. Rounds called that a $100 billion tax hike on "job creators," which is code for reducing the middle class to serfdom under the wealthy elites backing Rounds.
  7. Speaking of Social Security, Pressler rejected Democratic arguments that he wants to raise the retirement age. Pressler said last night he would leave the retirement age where it is.
  8. Weiland pinned the Ryan budget on Rounds, saying Rounds backs the GOP House's intentions to gut Head Start, Pell Grants, and other programs that benefit the middle class. Weiland said Rounds would voucherize Medicare so old folks could take the Ryan coupons to buy insurance at Fischer Rounds. Rounds repeated his feeble dodge that he "admires" Paul Ryan's fiscal efforts but has never said he supports the Ryan budget... which is code for, "You have no idea what I'll do to you in office, and I don't have to tell you."
  9. Weiland also nicely flipped the Rounds argument that an obstructionist Senate is to blame for our woes. Weiland said we could have immigration reform now, with more secure borders, if Speaker Boehner would just take up the bipartisan bill the Senate passed last year 68-32.
  10. Rounds is now fully on board with Republican fear-mongering. Invoking ISIS and Ebola (thank goodness for one-word threats), Rounds repeated "safety and security" as much as he repeated "South Dakota common sense." He also said we should impose a travel ban to stop Ebola "right now."
  11. Pressler continues to look every bit the capable statesman alongside his younger, less experienced counterparts. He recites the same points in every debate—Independent caucus, obsolete bases in Italy, three-point immigration plan—but that's a focused candidate staying on message. And he keeps coming up with new images for his campaign. He's gone from naked rabbit to last night's David up against twelve goliaths (Rounds, Weiland, and PACs), with a slingshot of idealism and friendship (translation: paint your own signs, because Harriet and I can't afford them!). Pressler still talks policy and turns phrases as effectively as anyone else in the campaign.
47 comments

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