Everything comes around....

In an October 10 blog post, Bob Mercer reported that the relationship between South Dakota's EB-5 czar Joop Bollen and Hanul Professional Law Corporation attorney James Park began in a Korean prison:

According to Park’s testimony, Park met Bollen during a failed attempt by Bollen to recruit in South Korea. Park said he helped get a NSU faculty member (who isn’t named) and a friend of the faculty member out of prison for a violation during their recruiting trip to South Korea. That led to Park and the Hanul firm becoming the prime recruiter worldwide for Bollen, except in China [Bob Mercer, "What Could the Rounds Campaign Have Done?" Pure Pierre Politics, 2014.10.10].

Evidently Bollen almost sank South Dakota's EB-5 program on his very first EB-5 recruiting effort in 2004. In his April 29, 2014, testimony in the Darley v. SDIBI arbitration, Park said his law firm's relationship with the South Dakota International Business Institute, which Bollen ran on the NSU campus, began in 2004:

...when SDIBI first came up with EB-5 projects, they were working with a Korean professor in Northern State, and Korean professor told Joop Bollen that "Prime market for this is Korea. So let me set up a seminar in Korea" [James Park, testimony, Darley v. SDIBI JAMS arbitration hearing, Los Angeles, CA, 2014.04.29].

(Yeah, sure, who needs market research when a prof down the hall says, "Hey! Let's go to Korea!"?)

So they set up a seminar and made advertisements in newspaper, which is illegal. So I contacted Mr. Bollen and said, "I'm a U.S. lawyer. I'm an immigration lawyer with a Korean law firm. We are interested in pursuing EB-5 business, and we understand you are having a seminar in Korea. The format you are going by could be problematic. So if you need help, let us help you" [Park, 2014.04.29].

Maybe Bollen should have paid more attention to Park's first contact. Park volunteers this story of what happened when Bollen, prof, and friend touched down in Seoul:

...Joop came to Korea with the professor and his Korean partner from the U.S. for a seminar, and lo and behold, as I warned him, the police came and arrested those two gentlemen for illegal seminar because they charged for the seminar.

So I was at the scene, and we talked to Joop, and our firm got those two gentlemen out of the prison, and that gave us a good relationship with Joop [Park, 2014.04.29].

From that meeting sprang a beautiful relationship, which Park says by 2007 included trips to Cambodia, Taiwan, India, Vietnam, and the Philippines. Their relationship was so cozy that Park and Bollen felt they could conduct transactions worth millions of dollars without writing anything down. (Remember, Park and Bollen are the honyockers who Californian financier David Kang says had Northern Beef Packers' finances in total disarray in mid-2009.) Park says SDIBI and Hanul never had a formal, written contract.

Park thought this wink-and-nod coziness ought to govern relationship for everyone working with state agency SDIBI. He made the following statements to Darley boss Robert Stratmore in an October 4, 2007, e-mail read into the arbitration record:

As I mentioned in my email, Hanul does not have an exclusive agreement signed between Hanul and SDIBI. This is because SDIBI (South Dakota) SDIBI and Hanul felt that substance over form was important. WE wanted to start the work and secure our place by our performance. Furthermore, State government granting any sort of exclusivity is a major endeavor as you may know. Rather than to spend time on formalizing everything, we've decided to use the time on creating results...[Park to Stratmore, 2007.10.04].

If that swishy language (formailize our multi-million-dollar transaction? Pish posh!) doesn't set off your business and legal alarms, well, hey, I have a beef plant in Aberdeen I'd like to sell you.

Hanul is confident that the working relationship with Hanul and SDIBI is sufficient for Darley to take on the marketing efforts that it intends to. Therefore, our agreement would be one of practicality rather than absolute legal right. That is the best that we can offer at this time. We have had no reason to seek cumbersome, and may be impossible, expressed exclusivity from SD attorneys. I hope you can reason our rationale in this regard [Park to Stratmore, 2007.10.04].

Park and Bollen thought the state's lawyers were so darned cumbersome that they didn't even seek the state's authorization to deal with the Darley litigation. During the arbitration hearing, Darley attorney Maxwell M. Blecher asked Park about a hearing involving Darley and SDIBI in December 2008:

[Blecher] Have you ever been appointed as counsel, legal counsel, for any South Dakota entity?

[Park]: No.

...[Blecher]: ...isn't it true that Hanul Professional Law Corporation... acted as the legal representative for SDIBI during that mediation session?

[Park]: Yes.

[Blecher]: ...Was Hanul Professional Law Corporation—to your knowledge, has Hanul Professional Law Corporation ever been appointed as legal counsel for SDIBI?

[Park]: Let me rephrase my answer to be more clear—

[Blecher]: Okay.

[Park]: —if I may. Hanul was never appointed by SDIBI to be SDIBI counsel.

[Blecher]: Okay.

[Park]: Hanul was asked to assist in certain legal activities to prepare for the mediation.

[Blecher]: Okay.

[Park]: If that is representation, then yes; but if that's not, that's what it is.

[Blecher, keenly attentive to slippery passive voice]: Okay. Who asked for Hanul's assistance?

[Park]: It was a discussion between Mr. Bollen and I about the Darley arbitration that was filed at the mediation and how we are going to respond to it. So there was discussion back and forth, and I think I suggested to Mr. Bollen that you can appear as pro per, meaning as your own self, and I offered to assist him with the preparation of materials for that, if necessary.

[Blecher]: But you never—you never did talk to any representative of the Board of Regents in connection with appearing for SDIBI at that mediation, correct?

[Park]: No, we did not [Darley v. SDIBI, JAMS hearing, 2014.04.29].

Park seems to get his dates mixed up: Bollen submitted his illegal pro per pleading in August 2008, well before the December 2008 hearing to which Blecher refers.

Whenever Park advised Bollen, we can clearly see that Bollen and Park winged South Dakota's EB-5 program on a handshake, then graduated to conspiring to conceal a lawsuit and engage in unauthorized legal representation of the state of South Dakota, which South Dakota Codified Law and the State Bar of California, under which Park practices, agree is naughty.

Yet Bollen kept drawing a state paycheck through 2009 and lived fat on a state contract doing the same job for almost four years after that.

The Bollen–Park relationship that drove South Dakota's EB-5 program in its early years began in a Korean jail. Perhaps the South Dakota EB-5 story will end with a similar cozy image of Bollen and Park themselves in jail.


Among the absurdities revealed by Joop Bollen's April 16–18 deposition is the EB-5 czar's haughty disdain for following the basic rules of contracting with private vendors.

First, some background (I know, it's maddening, but the EB-5 scandal is complicated!):

Darley International sued to force the South Dakota International Business Institute into arbitration over a contract dispute. Darley signed a contract with the Hanul Law Firm in October 2007 to recruit EB-5 investors in China for South Dakota projects. Darley alleged that Hanul failed to deliver recruitment documents that the contract demanded at a December 2007 EB-5 recruitment trip to China. Bollen incorporated SDRC Inc. in January 2008 to take over the lucrative recruitment duties specified in the Darley-Hanul contract. Darley went after Bollen's SDIBI because Darley perceived Hanul to be SDIBI's partner in managing the EB-5 program and because SDIBI chief Bollen had been in contact with Darley boss Robert Stratmore and appeared to be aware of and participating in the negotiation of the Darley–Hanul contract.

Now the fresh meat and potatoes:

One fact that saved SDIBI from facing a breach-of-contract ruling is that SDIBI had no written contract with Darley or Hanul. Even though Bollen had been pals with Hanul boss James Park since a fortuitous meeting in Korea in 2004, Bollen never firmed up the SDIBI–Hanul relationship in writing. In the April 16, 2014, deposition, Board of Regents attorney Chaka Okadigbo tries to suss out why not:

[Okadigbo]: Okay. Did James Park at any point ever ask you for a formal written agreement between SDIBI and Hanul?

[Bollen]: Very early on, but I explained to him the constraints that I was operating under and he understood those [Joop Bollen, deposition 1, Darley v SDIBI, April 16, 2014, p. 17].

Constraints? What constraints?

Bollen explains that, when South Dakota's EB-5 regional center was one of the few in the nation, he received numerous contacts from recruiters angling for a profitable contract. He forwarded those contacts on to Hanul for James Park to handle (and yes, you should start wondering whether Bollen did any work at all in his state job).

The reason why I connect them to Hanul is because of the constraints I'm on, under, I cannot sign agreements with outside entitites. Hanul is a seasoned law firm that knew my constraints and knew how to work with my constraints and still produce for the State of South Dakota [Bollen, 2014.04.16, p. 22].

Bollen repeats similar lines about "constraints" on pages 23, 27, 28, and 35. These assertions make no sense. A state agency like SDIBI can make written agreements with private contractors. That's how the Board of Regents, who technically employed Bollen and housed SDIBI, builds stadiums. That's how the Department of Tourism, which in the Rounds Administration was also technically Bollen's boss, gets super-slick promotional materials worth millions of dollars from advertising firm Lawrence & Schiller. If vendors want to provide services to the state, the state hands them the state vendor manual, puts out bids, and writes a contract to the vendor who offers taxpayers the maximum value.

But on page 60–61, Bollen finally makes clear his perception of the "constraints" that prevent him from operating like every other state employee:

[Okadigbo]: While you were SDIBI director, what was your understanding of what you needed to do if you wanted to get a written agreement in place?

[Bollen]: I wouldn't even go there because it doesn't work in the system, so that is not something I would even attempt to do.

[Okadigbo]: Okay. And just so that we understand, why wouldn't you attempt it?

[Bollen]: Because it's a bureaucratic -- my job was doing very entrepreneurial things in a very bureaucratic environment, and a typical bureaucrat is not going to sign off on the kind of activities that I was instructed to do, so it would become bogged down in the system by people who would rather not make any decision at all.

[Okadigbo]: Okay.

[Bollen]: And therefore there would be too many time delays before it would be practical, become practical [Bollen, 2014.04.16, pp. 60–61].

In case Joop's accent throws you off, here's the translation: The things I've been instructed to do can't wait for the dopes at Northern and in Pierre. I'm far too important to follow their rules.

(Remember, the oh-so-hurried and self-important Bollen is the same guy who told Chinese investors there was nothing wrong with investing in a beef plant that was taking years longer to build than originally planned.)

Rather than submit to the laws and rules that every responsible state employee accepts as necessary safeguards of public dollars and public trust, Bollen looked for partners like Hanul who would help him dodge state oversight by doing business on a wink and a nod. When the state became aware of the Darley litigation that Bollen tried to conceal from them, the state could see Bollen's arrogance and corruption. Yet rather than acting on its obligation to hold every state employee accountable to the public, the Rounds Administration rewarded Bollen with a no-bid contract and even greater opportunity for unsupervised profiteering.

South Dakotans, Joop Bollen told us and our rules to jump in the lake. And Mike Rounds said, "Heck of a job, Joop! Keep up the good work!"


One of the numerous violations of state law Joop Bollen appears to have committed while running Mike Rounds's EB-5 visa investment program is his representation of the state in court in the Darley v. SDIBI lawsuit. Bollen submitted a pro per pleading to federal court in California to defend the agency he ran, the South Dakota International Business Institute, from EB-5 recruiter Darley's effort to force SDIBI into arbitration over a contract dispute. Bollen is not a lawyer. He never had Attorney General Larry Long's authorization to speak for the state in court. He broke the law to conceal the lawsuit from his bosses, a violation of state risk management policy.

But when deposed by Board of Regents attorney Chaka Okadigbo on April 16, 2014, Bollen denied that he authored that August 22, 2008, pleading:

[Okadigbo]: Okay. I've just handed you a document, it appears to be a pleading that's filed according to it, in Pro Per, it has your name and SDIBI's information on the top left part of the pleadings. So my question to you is, you had told Mr. Meyer about this case in January of 2009, but according to these pleadings, if we go by the proof of service that is located I believe on the last page -- well, second to the last page before the page that says mailing list, it indicates a proof of service date of August 22, 2008. So I guess my question to you is, looking at these pleadings, it's my impression that you, on behalf of SDIBI, had this document filed in federal court, is that correct?

[Bollen]: It's not correct.

[Okadigbo]: Okay. Can you tell me -- first of all, did you participate in the preparation of the pleadings that I've just handed to you?

[Bollen]: The only thing I did was prepare the statement of fact that I e-mailed to Hanul, from what I recall.

[Okadigbo]: Okay. So you prepared the statement of fact?

[Bollen]: Statements of fact.

[Okadigbo]: Statements of fact.

[Bollen]: In e-mail format, yeah, just Word document with the bullet points.

[Okadigbo]: Okay. So who came up with the legal arguments in this pleading?

[Bollen]: I would suspect Hanul.

[Okadigbo]: Okay. It wasn't you?

[Bollen]: It wouldn't be anybody -- it was not me, that's correct [Joop Bollen, deposition 1, Darley v SDIBI, April 16, 2014, pp. 93–94].

Review the pleading. It has Bollen's signature. Whoever, if anybody, cribbed it for him, Bollen took ownership of it. And by preparing, signing, and submitting it, Bollen broke state law in a clear attempt to hide his shady activities from his superiors.


As if we haven't had enough fun today, I finally get a copy of the written threat the South Dakota Republican Party issued to local media: stop running an anti-Mike Rounds ad, or we'll sue!

William Taylor, attorney, on behalf of South Dakota Republican Party, letter to South Dakota television stations, 2014.10.08.

William Taylor, attorney, on behalf of South Dakota Republican Party, letter to South Dakota television stations, 2014.10.08. (Click to embiggen!)

We have been contacted by the South Dakota Republican Party about the recent advertisement that your station is running for Every Voice Action. The ad is dated October 2, 2014, and is ironically entitled "Responsibility." In the ad, the narrator states that "Mike Rounds gave his friend a no-bid contract to auction off EB-5 green cards to the highest bidder." This statement is false. The EB-5 program was never an auction, as Argus Leader reporter David Montgomery, who knows something about EB-5, had written. On October 2, he wrote that the reference to an "auction" was "simply not true" and a "core inaccuracy."

Montgomery is right. The ad is false and therefore defamatory. It is made with actual malice, meaning with knowledge that it is false or with a reckless disregard as to whether it is false. Given no evidence that Mike Rounds sold green cards to "the highest bidder," the ad's statement that Rounds was a party to a contract resulting in an auction is false.

This letter constitutes notice that your station is engaged in broadcasting a defamatory statement made with actual malice. If your station does not stop broadcasting the ad within 24 hours of receipt of this letter, we will take legal action to stop the ad, and to hold your station responsible for its broadcast [William Taylor, Woods Fuller Shultz & Smith PC, on behalf of South Dakota Republican Party, letter to South Dakota television stations, 2014.10.08].

Look at the laughably narrow grounds on which the SDGOP argues defamation. Look at the text of EVA's ad, line by line, and think about which ones strike you as the hardest swings at Mike Rounds:

  1. It's the Mike Rounds citizenship-for-sale scheme
  2. and it's getting worse.
  3. Now the Republican Legislature is investigating.
  4. Mike Rounds says [enter mocking high-pitched voice] "EB-5 doesn't sell citizenship."
  5. But Mike Rounds gave his friend
  6. a no-bid contract
  7. to auction off EB-5 green cards to the highest bidder.
  8. That is selling citizenship
  9. and Mike Rounds knows it.
  10. His cronies profit.
  11. Taxpayers have millions in liability.
  12. And Mike Rounds still refuses to take responsibility.

#5 implies Mike Rounds and EB-5 czar Joop Bollen are friends. #6 refers to a bad fiscal practice. #10 and #11 suggest full-tilt malfeasance. #12 is a direct insult. Heck, #4 even makes fun of Rounds's voice. A good lawyer ought to be able to shoot a half dozen defamation ducks in this barrel!

But the SDGOP's legal eagles ignore those targets and focus on auction, the technically inaccurate but least provocative term in the ad aside from the prepositions. The SDGOP filed no defamation suit against Rick Weiland when he ran his "Auction" ad last month. You could even argue that the error makes the EB-5 program sound more honest than it really is.

The Republicans have tried to dismiss Democratic lawyer Patrick Duffy's charge that Rounds committed felony production of false evidence as a "new low", but hey, Duffy at least has Rounds's exact words and specific statute to back him up. Either Craig Lawrence is as bad at hiring lawyers as Rounds is at hiring campaign staff, or the Republicans really don't have any response to the substantive charges of corruption in Mike Rounds's EB-5 program.

The SDGOP threat is moot, of course, because Every Voice Action has released a new ad that hits Rounds even harder... and it doesn't say the word "auction."

Mike and the SDGOP just have to get used to the facts. Rounds oversaw a corrupt program. Rounds is offering a story that keeps sprouting holes. And South Dakotans aren't buying his story.


Paging Assistant Majority Leader-in-Waiting Lee Schoenbeck... Mr. Schoenbeck, Line 1...

Politico's Jake Sherman just Burt Elliotted Larry Pressler, whose principal residence appears still to be Washington D.C.:

Pressler, who served as a Republican in Congress from 1975 to 1997, and his wife receive the homestead deduction, a generous tax break meant for people who use their D.C. home as their “principal residence,” according to the D.C. Office of Tax and Revenue.

...Reached on his cell phone—with a D.C. area code—Pressler said Thursday evening the apartment is indeed his, and he remained in Washington after losing his Senate seat because his wife works in D.C.. He noted that they are "long-time voters in South Dakota" [Jake Sherman, "South Dakota Senate Candidate Lives in D.C.," Politico, 2014.10.10].

Long-time voters in South Dakota... that should trigger the Schoenbeck charge that registering to vote at an address where you don't "actually live" is perjury.

Hmm, so if Pressler is committing perjury, and if Rounds committed a felony by submitting false evidence... dang! Looks like we've got the Rick Weiland–Gordon Howie race we've all been waiting for!

Speaking of Weiland and Howie, here's their one-on-one conversation, recorded in Rapid City last month:

We're all South Dakotans. We're all Americans. We all want good things for our kids, for our country, for our economy. It requires throughout this process an opportunity to sit down and have these conversations [Rick Weiland, conversation with Gordon Howie, Rapid City, South Dakota, 2014.09.13].

If only both men had gotten out their guitars....

Update 14:38 CDT: Journalist and bar-certified lawyer Todd Epp says, "Don't think great thoughts; read the statute" and rules that Pressler qualifies as a registered voter in South Dakota. Epp's analysis may call into question Schoenbeck's challenge to Burt Elliott's State House candidacy.


Last month, South Dakota Director of Banking Bret Afdahl said that his office had sent a letter to SDRC Inc. requesting information about its lending activities. Afdahl made this announcement after the Brown County Commission called on the state to investigate whether SDRC Inc., the now infamous EB-5 recruitment company, owes South Dakota $2.4 million in bank franchise taxes.

Afdahl said at the time that companies can take up to 30 days to respond to such questions. That story came out September 9; today is October 10. Whether Afdahl has received an answer is unknown, but in case he hasn't, Scott Waltman sends SDRC Inc. owner Joop Bollen a reminder in today's Aberdeen paper:

If the banking division determines that SDRC Inc. is a financial institution and subject to licensing and paying bank franchise taxes, the state Department of Revenue will work to collect the amount owed, Jason Evans, deputy director of the revenue department, said Wednesday. He said he visited with secretary of the Department of Revenue about the matter [Scott Waltman, "State Considering Brown County Resolution Calling SDRC a Bank," Aberdeen American News, 2014.10.10].

I don't know if this helps, Banking Division, but Joop Bollen's lawyer Jeff Sveen has said that SDRC Inc. "functions similar to a bank." We are all curious to hear whether Sveen says the same thing directly to you.


At an 11 a.m. press conference in Rapid City today, South Dakota Democratic Party attorney Patrick Duffy accused Republican Senate candidate Mike Rounds of committing a felony and called on the former governor to withdraw from the race.

On September 22, 2014, in response to questions from the Legislature's Government Operations and Audit Committee, Rounds declared, "The governor's office 'was not served'" in the Darley v. SDIBI litigation.

On October 2, 2014, this blog and other media published proof of service of the governor's office in Darley v SDIBI on July 14, 2009, contradicting Rounds's testimony.

Duffy says that false statement violates SDCL 22-12A-16:

Falsification of evidence. Any person who prepares any false book, paper, record, instrument in writing, or other matter or thing with intent to produce it or allow it to be produced as genuine in any trial, proceeding, inquiry, or investigation authorized by law, is guilty of a Class 6 felony.

Duffy then points to SDCL 22-12A-10 for consequences of such felonious action:

Forfeiture of public office for violation--Disqualification from holding other office. The public office of any public officer or employee who is convicted of violating any provision contained in this chapter is forfeit. Moreover, such public officer or employee is forever disqualified from holding any public office in this state.

Duffy says that Mike Rounds and members of his campaign team prepared false evidence for GOAC's legally authorized inquiry. Duffy says that action disqualifies Rounds from holding public office in this state.

Committing a felony does not disqualify one from holding a seat in Congress; however, like the South Dakota Legislature, the Senate and House have the authority to refuse to seat members they deem unqualified to serve.

Duffy contends Rounds's guilt is so certain that he should do South Dakota a favor and withdraw immediately from the U.S. Senate race. Duffy says South Dakotans deserve a candidate who is qualified to hold office and who does not misrepresent facts before a legislative committee.

Given the content of the South Dakota Republican Party press conference in Sioux Falls earlier this morning, expect SDGOP chairman Craig Lawrence to call Duffy a coward and threaten to sue Duffy for saying mean things about Mike Rounds.


Burt Elliott is in trouble. The Brown County Democrat wants to return to the Legislature to serve District 3. Unfortunately, he lives in District 2. Elliott said at a Brown County forum on September 27 that while he has a house in District 2, he has rented an apartment in District 3. Elliott says he made the move for "family issues," but pretty much admits that he has cited this apartment address as his voting residence to get around the fact that Republicans gerrymandered his house address out of District 3, which he served from 2001 through 2008.

Soon-to-be District 5 Representative Lee Schoenbeck is already swinging his leadership bat. The likely Republican House leader has reached across district lines to warn Aberdeen voters that if they elect Democrat Burt Elliot as District 3 representative, he will work to refuse Elliott a seat:

Schoenbeck said that, if Elliott is elected, he could run into trouble with a clause of the state Constitution that reads, “Each house (of the Legislature) shall be the judge of the election returns and qualifications of its own members.”

He said the House might rule that Elliott doesn’t actually live in District 3 [Scott Waltman, "Republicans Question Elliott's Residency," Aberdeen American News, 2014.09.28].

We don't see a lot of candidates from one district telling folks in other districts whom to elect. And to threaten to disenfranchise another district's majority takes grit.

But Schoenbeck can back his grit with law. Back in 2006, my Madison neighbor Jeff Heinemeyer sold his house in Madison and moved out to Lake Madison. Yet he fought to keep the Madison seat he'd won on the Heartland Consumer Power District board by renting an apartment downtown and declaring that flat his voting residence. In November 2008, the South Dakota Supreme Court kicked him off the board, saying renting an apartment while maintaining a house as one's practical primary residence does not satisfy the statutory criteria for voting residence.

Schoenbeck also has the state constitution on his side. Article 9 Section 3 makes each chamber of the Legislature "the judge of the election returns and qualifications of its own members." Schoenbeck and a Republican majority can overturn the popular will of District 3, refuse to seat Elliott, and submit the resulting vacancy to the Governor for filling.

Heinemeyer v. Heartland gives Schoenbeck authority to invoke the Legislature's power to reject an elected representative. Schoenbeck further contends that Elliott may have committed perjury when he signed his voter registration application, which includes the statement, "I actually live at and have no present intention of leaving the above address."

I wonder if Schoenbeck will also declare perjurious South Dakota's numerous RV voters. The Lake County Auditor's office informs me that about 1,700 people have sworn to that same statement of residency 110 East Center in Madison, the physical address of MyDakotaAddress.com. As is the case at similar businesses in Hanson, Minnehaha, and Pennington counties, RVers can rent a mailbox at 110 East Center, register to vote in Lake County, and enjoy the legal benefits of voting residency. They don't "actually live" at 110 East Center, and "actually live" figures prominently in Heinemeyer v. Heartland.

Are the thousands of RVers making South Dakota their paper home all guilty of perjury? I know that Republicans have much more interest in thwarting a Democrat's campaign for Legislature than in disenfranchising thousands of wealthy retirees who enjoy dodging taxes. But the same logic and law that compel Schoenbeck to stand against Elliott's manipulation of his voting residence would seem to apply to the RVers who spend less time in their chosen voting residence than Heinemyer or Elliott.


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