Among other things I discovered on my visit to Brookings this weekend was this letter to the editor in the September 27, 2014, Brookings Register, in which Rep. Mark Mickelson (R-13/Sioux Falls) and Sen. Larry Lucas (D-26/Pickstown) praise Senator Larry Tidemann (R-7/Brookings) for his "fair and non-partisan" chairmanship of the Government Operations and Audit Committee:

Letter to the editor, Brookings Register, 2014.09.27

Letter to the editor, Brookings Register, 2014.09.27

Contrary to recent Democrat [sic]* Party advertisements, Senator Tiedemann [sic]* has chaired the GOAC committee [sic]* in a fair and non-partisan manner and he should be commended for doing so [Rep. Mark Mickelson and Sen. Larry Lucas, letter to the editor, Brookings Register, 2014.09.27].

Rep. Mickelson and Sen. Lucas challenge an ad placed in the Brookings paper by the South Dakota Democratic Party criticizing Sen. Tidemann for refusing to subpoena EB-5 czar Joop Bollen and encouraging Brookings voters to ask their senator to work harder to get answers about the growing and costly EB-5 scandal.

Senator Lucas's participation in this letter provokes head-scratching. Senator Lucas submitted an important document and hefty folder of evidence to GOAC at its September 24 hearing laying out the known details of the EB-5 scheme and a number of questions that Chairman Lucas's refusal to subpoena Joop Bollen has left unanswered. Senator Tidemann's only defenses for his refusal have been the silly assertion that he's trying to avoid a media circus and the false assertion that Bollen's promised written answers will be as good as in-person testimony. (The Aberdeen American News says Mike Rounds's mulligan request shows that in-person testimony beats written answers.)

Yet Senator Lucas says the very stonewalling that his September 24 document tries ot overcome shows "fair and non-partisan" leadership.

I have no explanation for Senator Lucas's positioning here. Perhaps guys named Larry just have to stick together. But I am very curious to hear your explanations.

*Sic 'em, Fido!

  1. "Democrat Party" is an incorrect name for the Democratic Party, usually a pejorative shortening used by Republicans.
  2. The Senator spells his name Tidemann. The Democratic Party spelled it correctly in their ad.
  3. GOAC stands for Government Operations and Audit Committee. "GOAC committee" is redundant.
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On Monday, the South Dakota Democratic Party launched a local ad campaign encouraging citizens to call Senator Larry Tidemann and urge him to subpoena Governor Dennis Daugaard, former Governor Mike Rounds, and other state officials who could explain just what happened in the GOED/Northern Beef Packers/EB-5 scandal. Remarkably, the discussion on this blog turned to the propriety of publishing Senator Tidemann's phone number (a number which is published on Senator Tidemann's official Legislative webpage, as are phone numbers for every other South Dakota legislator).

One eager reader took up the ad's challenge and called Senator Tidemann. The reader got voicemail and left a message. Senator Tidemann called the reader back. Here's the reader's account of their very civil conversation:

When he called me back he was very nice and tried to be helpful explaining what he was doing and what they hoped to accomplish.... We talked about [Richard] Benda, Joop [Bollen], records missing and he basically held to the party stance on this whole thing. He said it was a federal program and I agreed but I pointed out my concern was how it was administered here in SD. It was almost as if there were things with standard responses he made that are used to throw me off and diminish this but I held on and was pointed yet very tactful and respectful.

He said the reason he did not want Joop to be present was that it would have been a circus atmosphere and that the written responses were the same as a subpoena. He mentioned the U.S. Department of Justice ongoing investigation and covered the basis of they are legislators and some of this is better left to police, FBI and DCI agents [blog reader, e-mail, 2014.09.17].

Senator Tidemann's willingness to call a questioner back and discuss serious issues seems to deflate the critique of the propriety of encouraging citizens to call legislators. Senator Tidemann gets extra points for affirming that a federal investigation continues and acknowledging that there appears to be criminal activity in this scandal that warrants investigation.

But Senator Tidemann loses points for talking points. Bob Mercer has rejected the "EB-5 is federal " dodge; so should everyone else.

Senator Tidemann loses more points for his circus-phobia. Is Senator Tidemann saying he is incapable of maintaining order at any committee meeting where a prominent or controversial figure may testify? When is the last time any Legislative committee meeting turned into a circus? How circusy can things get in Pierre? Is Tidemann afraid Bob Mercer will bring peanuts and thundersticks?

The worst that happens if Joop Bollen appears in person in front of the Government Operations and Audit Committee on September 24 is that two bloggers, five reporters, and ten lawyers come to the meeting. Chairman Tidemann raps the desk, points his gavel, and says menacingly, "No circus, or you're out!" And then everyone sits in rapt silence, punctuated only by the raindrop tap of laptop keys, as Senator Larry Lucas and Rep. Susan Wismer grill Joop Bollen.

Senator Tidemann is serving the public trust by talking with voters directly on the phone. Now let's serve the public trust by having former public employee Joop Bollen talk directly with the public at GOAC, in person, under oath, on September 24.

p.s. [09:52 CDT]: The caller notes that Senator Tidemann deserves extra credit for taking a call from a South Dakotan outside his district. The caller made clear in the voicemail that the caller lived in another legislative district, yet Senator Tidemann still took the time to call back. Well done, Senator Tidemann!

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Hey, whose phone is that ringing? Ah, Senator Tidemann....

Ad released by South Dakota Democratic Party, 2014.09.15

Ad released by South Dakota Democratic Party, 2014.09.15

The South Dakota Democratic Party is placing the above ad in Senator Larry Tidemann's local newspaper encouraging his constituents to contact him and demand that he subpoena the folks who could answer the vital questions about Mike Rounds's promotion of Northern Beef Packers and other economic development projects with EB-5 investment. The copy I got did not include the footnotes, but one may refer to the following supporting texts:

  1. "repeatedly broke the law": start with conflict of interest, then unauthorized lawyering, sprinkle Board of Regents policy, and top it off with a scoop of possible tax evasion.
  2. "millions of dollars of potential liability": that's here... and maybe here.
  3. "refuses to bring in...": see Tidemann's willingness to settle for unsworn written testimony here.

Senator Tidemann has proven himself able to change his mind before. Perhaps some civic participation will convince him to change his mind again and acknowledge that the Legislature and the public should hear from Rounds and his GOED/NBP/EB-5 collaborators in person.

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While the GOP leadership treats Joop Bollen with kid gloves, accepting without complaint his refusal to testify in person before the Government Operations and Audit Committee, I am reminded of a somewhat testier Legislative committee that responded to balky witnesses with somewhat more intensity.

In December 2011, Rep. Stace Nelson and five other Republican legislators complained that the GOP House leadership was violating ethics rules. Leadership threw together an ad hoc committee, chaired by Sen. Joni Cutler, that declined to exercise subpoena powers or take testimony under oath. Dissatisfied with that lack of rigor, complainant Reps. Nelson, Lance Russell, and Lora Hubbel decided the hearing was not worth attending.

Chairwoman Cutler implored Rep. Russell to play nicely and said his attending the hearing in person would be much better than discussing the matter in writing:

There are both procedural and legal reasons for addressing those issues in this manner. My hope is that you would refrain from drawing conclusions about what you think I intend to do in the hearing as you risk inaccuracy in so doing. That is one of the huge drawbacks in trying to assess this through email and letters and why it is preferable, in fairness to everyone, to handle all of this in an open meeting and on the record with witnesses personally present.

We really need your cooperation and presence so that we can have the type of dialog that will help us work toward a proper resolution. We would be happy to meet into the evening if that would help you come to Pierre [Senator Joni Cutler, letter to Rep. Lance Russell, 2012.01.02].

When the hearing convened the next day and certain legislators remained absent Chairwoman Cutler got out the stick:

Emphasizing the seriousness of the hearing, Cutler reviewed statutes outlining the consequences of a legislator neglecting or refusing to testify when summoned. The penalties include a Class 2 misdemeanor, the forfeiture of public office and disqualification of running for public office again in the state.

It was the chairwoman’s review that prompted Rep. Lora Hubbel, R-Sioux Falls, one of the three missing legislators, to hop into her car and make the 225-mile drive to Pierre.

“They said we had to or we are breaking the law. If they want to beat me up there, I will let them beat me up,” Hubbel said while getting into her car to leave [Megan Luther, "Legislative Probe Hears Conflicting Testimony," that Sioux Falls paper, 2012.01.04].

Cutler's January 2 letter to Rep. Russell doesn't appear to be a subpoena; she's simply inviting him to come speak in person to the committee. But when Rep. Russell refused to attend in person, she broke out statute:

SDCL 2-6-5: Disobedience of legislative summons as misdemeanor. Any person who is summoned to attend as a witness before either house of the Legislature or any committee thereof authorized to summon or subpoena witnesses, and who refuses or neglects without lawful excuse to attend pursuant to the summons or subpoena, is guilty of a Class 2 misdemeanor.

SDCL 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.

SDCL 2-6-7: Forfeiture of office by legislator in violation--Disqualification from public office. The conviction of a member of the Legislature of any crime defined in § 2-6-5 or 2-6-6 involves as a consequence, in addition to the punishment prescribed therein, a forfeiture of his office and disqualifies him from ever thereafter holding any public office under this state.

Chairwoman Cutler wielded this statutory threat on an ad hoc committee, in the absence of any formal summons.

Fast forward to today. Senator Larry Tidemann chairs the Government Operations and Audit Committee, which is specifically empowered by SDCL 2-6-4 to summon witnesses in its thorough examination of every state department's management and expenditures. He asks former state employee Joop Bollen to testify before the committee. Bollen refuses, with no apparent lawful excuse, and Tidemann shrugs.

The moral of the story: make millions of dollars while promoting a prominent Republican's pet project, and the Legislature will go easy on you. Question the Republican leadership, and the Legislature will discover its teeth and its statutory authority to bite.

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The Government Operations and Audit Committee should be receiving some interesting reading in the coming several days. GOAC chair Senator Larry Tidemann (R-7/Brookings) says that SDRC Inc. exec Joop Bollen has declined to appear before the committee in person but has offered to write answers to questions.

Senator Tidemann says that if Bollen is "willing to provide the answers in writing, that is as good as in person." False:

  1. Taking answers in writing allows Tidemann and Bollen to filter and stall. Tidemann is requiring legislators to submit questions by Friday, September 19. The committee will then "discuss" (i.e., weed out the questions the Republican majority doesn't want asked) those questions at its September 24 and forward the surviving questions to Bollen. We don't know when GOAC will receive or discuss Bollen's responses, since GOAC does not have another meeting on the calendar.
  2. Answers in writing don't allow for immediate follow-up. Bring Bollen in person to Pierre, and an attentive legislator or counsel for the committee could ask for clarification of unclear points, delve deeper into new information, and immediately redirect Bollen if he evades certain points.
  3. We cannot know if written responses are coming from Bollen himself, from his lawyer (Jeff Sveen? Rory King? Harvey Jewett himself?), or from the Rounds for Senate campaign. Only in-person testimony allows truly curious and nimble legislators to get Bollen off whatever script his minders prepare for him and hear directly from the witness.

Committee members composing questions will have written responses from Governor Dennis Daugaard and former governor Mike Rounds in hand to inform their questions:

Tidemann said Gov. Dennis Daugaard and former Gov. Mike Rounds, the GOP candidate for U.S. Senate, both indicated that by Wednesday they will provide written responses to the committee's questions so its members have a week to review the information before the Sept. 24 meeting [Carson Walker, "Joop Bollen Vows to Give Written Answers on EB-5," AP via that Sioux Falls paper, 2014.09.12].

To further inform their questions, committee members should turn to documents from GOAC's 2008 inquiry into Bollen's activities as director of the South Dakota International Business Institute at Northern State University:

  1. NSU President Patrick Schloss's June 16, 2008, letter to GOAC explaining what SDIBI was doing and where Joop Bollen sat in the chain of command.
  2. NSU interim president Laurie Stenberg Nichols's September 8, 2008, letter telling GOAC that SDIBI activities were creating lots of jobs and economic activities (with attachments listing EB-5 projects and showing growth in exports).
  3. NSU Nichols's October 14, 2008, letter explaining SDIBI's activities and itemizing expenses for the 2006, 2007, and 2008 International Business Conference hosted by SDIBI at Mount Rushmore.
  4. Minutes of December 1, 2008 GOAC meeting (Bollen and Nichols testified the same day as Richard Benda, who assured GOAC there was nothing funny going on with his department's $6.9-million contract with Lawrence & Schiller).

Reviewing these documents may allow committee members to focus on plowing new ground.

Inquiring legislators will also want to review my July 30 list of unanswered issues involving Bollen, Richard Benda, Northern Beef Packers, and the state's exploitation of the EB-5 visa investment program. That information and subsequent revelations should lead to the following crucial questions:

  1. Did you seek a lending license for the loan operations of SDRC Inc. and/or its subsidiary loan funds?
  2. Did you or any of your incorporated entities pay bank franchise tax?
  3. Who authorized the 2008 contract/"memorandum of understanding" between SDIBI (which you directed) and SDRC Inc. (which you owned)?
  4. Explain the genesis of the SDIBI–SDRC Inc. contract:
    1. Who participated in the conception, development, and drafting of that contract?
    2. When did that conception, development, and drafting take place?
    3. Who in state government authorized the conception, development, and drafting, and signing of that contract?
  5. Was the 2008 SDIBI–SDRC Inc. contract essentially a contract between you and yourself?
  6. How much money did privatizing your EB-5 recruitment and management functions divert from the public coffers to SDRC Inc.'s private profit?
  7. When you created SDRC Inc., did any member or employee of the Board of Regents, the Governor's Office of Economic Development, or other state government entity advise you as to whether your creation, ownership, and activities in SDRC Inc. violated Board of Regents policy, state statute, or any other rules or regulations?
  8. When Darley International filed suit to force SDIBI into arbitration in 2008, whom in state government did you notify, and when?
  9. Who in state government authorized you to submit the brief you filed in U.S. District Court, Central District of California, Western Division, on behalf of SDIBI on August 22, 2008?
  10. Who helped you draft that August 22, 2008, brief?

That's just me getting going over breakfast. Numerous follow-up questions would suggest themselves in a face-to-face interview. But since Senator Tidemann insists on shielding one former state employee from hard questions about his on-the-job activities, we'll have to trust in our legislators (well, at least in the two Democrats on the committee) to think through these questions, anticipate the possible answers, and compose an exhaustive list of follow-ups to submit on Friday for Chairman Tidemann's approval.

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I'm looking for the air quotes around "Brilliant":

Yes, Rep. Susan Wismer can claim victory. But Sen. Larry Tidemann played it smart today.... He declared today that he’s inviting Bollen to testify at GOAC’s next meeting scheduled for Sept. 24. Republicans took some tough hits on editorial pages for their treatment of Wismer, so the Tidemann decision today takes some of the steam out of the Democrats’ complaints claiming an EB-5 cover-up by Republicans.

...But here’s the smartest piece of Tidemann’s move. He’s essentially run an entire month off the calendar.... That takes Republicans four weeks deeper into their election campaigns [Bob Mercer, "The Persistence of Rep. Wismer and the Brilliant Move by Sen. Tidemann," Pure Pierre Politics, 2014.08.22].

Crockett and Tubbs—er, SDRC exec Joop Bollen and former Governor M. Michael Rounds

Brilliant: making sure this photo plays in every newspaper six weeks before the general election. South Dakota's EB-5 director Joop Bollen and former Governor M. Michael Rounds

I'm not sure what's so Republicanly brilliant about giving in to Democrats with a complete reversal. Last month Republicans didn't think Bollen was worth discussing. Tidemann maintained that the Government Operations and Audit Committee that he chairs had no authority and no need to ask Bollen questions.

If Senator Tidemann were "brilliant," he wouldn't have obstructed Rep. Wismer's Bollen-subpoena motion. He wouldn't have provoked statewide editorial outrage at the Republican cover-up. He wouldn't have set the stage for KELO to finally pick up my story from eight months ago showing that when the state privatized its EB-5 program, it put Bollen on commission and lowered his official salary below the legal threshold that allowed the state to issue a no-bid contract (now that contract was "brilliant"). A brilliant Tidemann would not have set the stage for Mike Rounds to get his glass EB-5 jaw hammered and Daugaard to get caught without a bucket by a Susan Wismer on fire at the Dakotafest debates. A brilliant Tidemann would not have provoked Democrats to retain formidable attorney Patrick Duffy to dig into the EB-5 documents and identify legal missteps (and Duffy won't sit silently twiddling his thumbs until September 24).

Joop Bollen, director, SDRC Inc.

Joop Bollen, SDGOP's Oliver North?

"Brilliant" (not to mention sensible, logical, responsible, practical...) would have been dragging Joop Bollen's butt before GOAC at its very first EB-5/GOED hearing on March 7 and demanding answers for the people of South Dakota. "Brilliant" would have been taking the EB-5 issue away from Dems before the primary.

"Brilliant" is the full-court press Democrats put on this week to force the SDGOP into a bad position.

Tidemann didn't shine yesterday; he surrendered... to Democrats. He scheduled a media spectacle in the heat of the campaign season. The least damaging outcome of Tidemann's delay is the GOP trotting out an arrogant and secretive foreigner as their Oliver North to declare EB-5 "a neat idea." The middle damage comes when Bollen either pleads the Fifth or declines to appear. The most damaging is Bollen smells the GOP throwing him on the fall-guy pile with Richard Benda and starts talking.

Democrats have known all along that Republicans would try to run out the clock on the EB-5 scandal to protect their candidates. But we have pressed anyway for answers, and now we may get them. Brilliant!

Laugh Line of the Week:

Craig Lawrence, the chairman of the South Dakota Republican Party, said Democratic calls for more investigation are fruitless.

"This is probably one of the most investigated matters in the history of South Dakota," Lawrence said. "Through all this, there's no smoking gun" [David Montgomery, "GOAC to Ask Bollen to Testify Despite Refusing Subpoena," that Sioux Falls paper, 2014.08.22].

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Sen. Larry Tidemann (R-7/Brookings): "Nothing to see here..."

Sen. Larry Tidemann (R-7/Brookings): "Nothing to see here..."

Senator Larry Tidemann (R-7/Brookings) says the Government Operations and Audit Committee's probe of financial misconduct in the Governor's Office of Economic Develoment and the EB-5 visa investment program are pretty much over.

Over? I didn't even notice that they'd begun.

Michael Larson describes Tidemann and GOAC as rookie cops telling us there's nothing to see here. Rep. Kathy Tyler (D-4/Big Stone City) reminds us there's plenty to see, like...

That's not an exhaustive list of topics related to the Governor's Office of Economic Development and the EB-5 program that legislators of good conscience thought they were directing Chairman Tidemann and GOAC to address. But it's a good starting list of the symptoms of the culture of corruption in Pierre. Chairman Tidemann and his Republican colleagues have ignored this list of symptoms, put their stethoscope to GOED's big toe, declared the patient healthy, and gone golfing.

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Senator Larry Tidemann (R-7/Tidemann) acts like he's afraid of his own shadow. He chairs the Legislature's Government Operations an Audit Committee. His committee has the power to subpoena witnesses to investigate crimes, corruption, and just plain sloppy work in state government.

Yet, as was the case in June, Senator Tidemann keeps looking for excuses not to use that subpoena power. Heading into today's GOAC meeting, during which the committee is supposed to discuss financial misconduct in the Governor's Office of Economic Development and the EB-5 visa investment program, Senator Tidemann tells David Montgomery that he doesn't think he can subpoena EB-5 chief Joop Bollen:

Tidemann said his committee has a limited scope in terms of investigating a complex scandal that combines government and private business.

“We are not the court system,” Tidemann said. “We can bring in things that deal with state government. I can’t bring you in to talk about your private funds. I don’t think that’s in the authority of GOAC” [David Montgomery, "Legislators Consider Subpoena in EB-5 Case," that Sioux Falls paper, 2014.07.29].

Even though Kurt Evans has taken the weight off my shoulders, permit me to do the attorney general's job for a moment.

GOAC, the Legislature, and all sorts of other public agencies have subpoena power:

1-26-19.1. Administration of oaths--Subpoena powers--Witness fees--Disobedience of subpoena. Each agency and the officers thereof charged with the duty to administer the laws of this state and rules of the agency shall have power to administer oaths as provided by chapter 18-3 and to subpoena witnesses to appear and give testimony and to produce records, books, papers and documents relating to any matters in contested cases and likewise issue subpoenas for such purposes for persons interested therein as provided by § 15-6-45. Unless otherwise provided by law fees for witnesses shall be as set forth in chapter 19-5 and be paid by the agency or party for whom the witness is subpoenaed.

Failure of a person to obey the subpoena issued pursuant to this chapter may be punished as a contempt of court in the manner provided by chapter 21-34 [South Dakota Codified Law 1-26-19.1].

The Legislature itself acknowledged GOAC's subpoena power in HCR 1010, the resolution the Legislature passed last February to assure us that the Legisalture would do something about the GOED/EB-5 scandal and to forestall pressure for immediate and firmer action against GOED and SDRC Inc.:

...the South Dakota Legislature requests the Joint Committee on Government Operations and Audit to conduct hearings on issues related to the Governor's Office of Economic Development, beginning this 89th Legislative Session upon receipt of three independent audits. Hearings may include a review of all available audits and other information, ordering of additional audits, questioning of persons involved in related economic development projects, and opportunities for public testimony. The committee's powers to summon witnesses and issue subpoenas may be exercised as necessary... [2014 HCR 1010].

Review the rules of procedure for subpoenas in Chapter 15-6, and you find no language exempting private parties or private funds from subpoena. Senator Tidemann may defend his subpoenal reticence with SDCL 2-6-4, which defines the scope of GOAC's investigative power:

2-6-4. Investigative powers of Government Operations and Audit Committee. The Government Operations and Audit Committee may examine all records and vouchers, summon witnesses, and thoroughly examine all expenditures and the general management of each department [SDCL 2-6-4].

That statute refers to government departments. But remember, everything Bollen did in managing EB-5, even after he and Richard Benda finagled EB-5 authority into a private entity to better shield their get-rich-quick schemes from public oversight, he did under authority granted solely by a state contract with the Department of Tourism and State Development (now GOED). The funds Bollen managed were authorized by the state. The $989,946 indemnification fund that Bollen's SDRC Inc. is still holding belongs to the state.

Senator Tidemann, this isn't hard. Governors Rounds and Daugaard allowed the privatization of a state program. Under Bollen, SDRC Inc. was carrying out the functions of a state department. To suggest that state functions are rendered immune from state oversight by handing them to private contractors creates a perverse incentive and escape for corrupt state officials.

Subpoena Bollen. Find out how he used his state authority.

22 comments

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