Rep. Kristi Noem says she is "thrilled to put Keystone XL pipeline legislation on the President's desk." She apparently is just as thrilled to put a dangerous and unnecessary pipeline on South Dakota farmers' and ranchers' land via eminent domain.

But her new colleague in the opposite chamber, Senator Mike Rounds, makes a comment about the creation of that Keystone XL bill that should chill our lone Congresswoman's thrill:

The Keystone debate was positive because there was a free flow of ideas, but there wasn’t always time to look into amendments carefully before voting on them, Rounds said [James Arkin, "How Being Governor Did (and Didn't) Prepare Mike Rounds for Senate," Real Clear Politics, 2015.02.09].

Senator Rounds suggests the Republican leadership was so hell-bent on passing this Keystone XL bill that they couldn't pause enough to allow their members to read and study the issue in full. And Congresswoman Noem is thrilled to pester the President with an ill-informed bill to usurp executive authority and approve a pipeline whose policy significance, amidst falling oil prices and growing job numbers, "comes close to nil.'

Mr. President, please do not hesitate to veto the Keystone XL bill.

27 comments

Various observers have raised concerns that South Dakota's use of the EB-5 visa investment program may have opened our doors to Chinese spies and mafia. Now, two years after Iowa Senator Charles Grassley started beating the drum about the possible national security risks posed by EB-5, ABC News goes to town and trumpets the evidence we've had for two years that EB-5 is rank with fraud and corruption:

But an ABC News investigation found that in addition to reaching wealthy foreign investors, the program has become a magnet for those seeking to sidestep the scrutiny of the traditional immigration process. In one case, immigration officials pushed through a visa application from Chinese investor in a Las Vegas hotel project despite an internal review that found the investor had previously been turned back at the border, and much of his visa application had likely been fabricated, immigration records show.

A Feb. 1, 2013 Homeland Security internal review obtained by ABC News also lays out in stark detail the breadth of the troubles afflicting some of the roughly 600 so-called regional centers -- private sector entities certified by Homeland Security to recruit foreign investors for specific business ventures that will qualify for EB-5 visas. The document summarizes 41 investigations, some open and some now closed, into allegations ranging from espionage to fraud to drug trafficking involving investors in various EB-5 investment projects [Brian Ross and Matthew Mosk, "Whistleblowers: US Gave Visas to Suspected Forgers, Fraudsters, Criminals," ABC News, 2015.02.03].

Ross and Mosk mention our own Senator Mike Rounds and his love of EB-5, though they fail to get into the details. They also mention well-placed Democrats Terry McAuliffe and Nevada Senator Harry Reid (whom this blog mentioned in connection with EB-5 last November) as having used EB-5 to do favors at the expense of national interests.

ABC News also mentions an EB-5 connection to Iranian terror networks (also reported on this blog in December 2013). ABC News says that EB-5 will come before the Senate Judiciary Committee, which Senator Grassley chairs, this year. Fortunately for us, Senator Mike Rounds is not on that committee. Maybe he'll be called to testify about why he gave such strong support to a program that appears to promoted crime, corruption, and possibly risks to American security in projects across the nation.

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Last November, Tony Venhuizen told us that 2014 was Dennis Daugaard's last election. The Governor now confirms that statement, in not so many words, by announcing that he will support raising taxes to fix South Dakota's roads and bridges:

During his 15-minute inaugural address, Daugaard promised more of the frugality that led to eliminating state government’s structural deficit and improved bond ratings during his first term.

During his 15-minute inaugural address, Daugaard promised more of the frugality that led to eliminating state government’s structural deficit and improved bond ratings during his first term.

But he also pledged he wouldn’t be cheap and he will “seize opportunities in the short term where it can lead to savings, or efficiencies, or better government in the long term.”

The first example came immediately after the ceremony. He told news reporters a priority in the legislative session would be raising more money for roads and bridges.

He said too much maintenance was deferred in the past, such as buildings at the state Human Services Center in Yankton.

“We need to confront decisions like that — and make them, right or wrong,” Daugaard said [Bob Mercer, "Dennis Daugaard Begins Second Term as South Dakota's Governor," Aberdeen American News, 2015.01.11].

As he did with the structural deficit four years ago, Governor Daugaard finds himself in a hole dug by his smiling predecessor Marion Michael Rounds, who let roads and bridges crumble while praying at the altar of corporate welfare. Rounds wouldn't support fixing roads, since there was no way to do that without raising big taxes, and he had his eye on running for Senate when he was done in the big chair in Pierre. Evidently with his last election behind him, Daugaard feels he can throw his weight behind some hard, practical investments.

Alas, the Governor's approach shows another problem with one-party rule in Pierre. Bob Mercer reports that instead of backing the comprehensive road funding package created by Senator Mike Vehle (R-20/Mitchell) and his diligent Highway Needs and Financing interim committee, the Governor will demand having things his way:

That means however the interim transportation committee’s road-and-bridge legislation, Senate Bill 1, likely is dead on arrival. It’s a sweeping plan that would raise every conceivable fee and tax affecting motor vehicles that travel state highways in some fashion at some point. Naturally something so broad would have broad opposition. Vehle wanted everybody to be in the boat. Look for a bill from the governor that would be trimmer and that he — Daugaard — could put his clout behind in the first year of his second and final term [Bob Mercer, "Governor Gets Aboard on Road and Bridge Funding," Pure Pierre Politics, 2015.01.11].

Politics aside, the Governor is talking sense:

This is a big change from Gov. Daugaard regarding taxes and fees, but as he took care to explain in roundabout fashion in his inaugural speech Saturday and much more directly in his remarks afterward to reporters, sometimes more money in the short term is needed to save money in the long run. That perspective is consistent with much of what he did in his first term and is proposing in other areas of his latest budget proposal [Mercer, "Governor Gets Aboard...," 2015.01.11].

Invest now, save later—why is that clear only to politicians who aren't running for re-election?

17 comments

Remember how Mike Rounds told us that Keystone XL would help South Dakota farmers by freeing up rail cars to haul grain instead of oil? Farm and blog friend Don Carr notices that, once Rounds was safely elected, the South Dakota Corn Growers changed their tune and admitted that the tar sands pipeline would not free up that much rail for farm products (a "blip on the radar," said SDCGA president Keith Alverson).

Carr contends that Rounds is putting Big Oil over Big Corn:

Rounds offered tepid support at best for one of South Dakota’s biggest ag products saying corn ethanol’s role was only as an oxygenate – not a ringing endorsement. And Rounds proudly took money from interests looking to upend the corn ethanol mandate. Meanwhile his challenger called for a dramatic increase in the blend of corn ethanol to 30% in U.S. gas tanks and was the only one to offer an agriculture policy plan [Don Carr, "Keystone Forces Corn Farmer Quandary," Republic of Awesome, 2015.01.06].

Apparently the Big Ag interests who backed Rounds are less interested in promoting their energy production than in blocking regulation of their pollutants:

American water quality is declining due to agriculture pollutants. Regulation is an increasingly viable option. For those reasons defeating the EPA rule has become agriculture’s main quest. So much so that they’re willing to jump in bed with declared enemies and let campaign lies slide [Carr, 2015.01.06].

By backing Rounds, the corn lobby is saying it wants to increase the chances of oil pollution on the prairie while fighting efforts to curb their own polluting activities. They have thus thrown in with a 100% pro-pollution Congressional delegation.

17 comments

The South Dakota Retailers Association lists monthly sales tax revenue reports from January 2004 up to October 2014. According to those numbers, monthly sales tax receipts decreased over the corresponding month in the previous year in 5 out of 46 months of Dennis Daugaard's gubernatorial regime, or just under 11% of the time. Sales tax receipts shrank in 13 out of the 84 months listed for the Mike Rounds regime, over 15% of the time. Note that 10 out of those 13 shrinky months were in 2009, when the national recession caught up with South Dakota's economy.

But let's compare apples to apples with the available data. During the Rounds regime, from January 2004 to October 2006, the average year-over-year monthly sales tax growth was 6.51%. During the Daugaard regime, from January 2012 to October 2014, that growth has been 4.83%. In 24 out of 34 months in these comparable periods, sales tax receipts grew faster under Rounds than under Daugaard.

I invite Sunday economists of all stripes to pass this chilly winter day brewing up explanations for the underperformance of Daugaardonomics.

6 comments

In my Top 30 Stories of 2014 post this morning, I noted that I wrote 172 blog posts about EB-5 this year. Here comes #173.

I would never have devoted 11% of my 2014 blog output to the EB-5 visa investment program if hadn't been for one man, a man who dictated much of this blog's focus without lifting a finger or uttering a word... because that man was dead.

Richard Benda in happier times, the Philippines, September 2012.

Richard Benda in happier times, the Philippines, September 2012.

Richard Benda died of a gunshot wound on October 20, 2013. His unexpected and suspicious death prompted Governor Dennis Daugaard to reveal the existence last year of a federal investigation into activities that took place in the Governor's Office of Economic Development while Benda headed that office. That revelation drove media attention throughout 2014. We learned that Benda had diverted more than half a million dollars from state assistance to one EB-5 project, Northern Beef Packers, into his own pocket. But we also learned, among other things, that...

  1. ...the head of South Dakota's EB-5 program, Joop Bollen, signed a contract with himself in 2008 to assign his duties as a state employee to his own private company, where he could turn his work for the state into millions of dollars in fees;
  2. ...Bollen attempted to conceal a lawsuit against the state triggered by his own EB-5 activities in 2007 and 2008;
  3. ...Bollen and his associate James Park, neither of whom is licensed to practice law in or on behalf of the state of South Dakota, unsuccessfully litigated that lawsuit themselves in 2008;
  4. ...Northern State University, the Board of Regents, the Attorney General, and the Governor's office knew Bollen had committed these infractions;
  5. ...Governor Mike Rounds ignored all of these known violations and at the end of 2009 granted Bollen a lucrative no-bid contract worth potentially hundreds of millions of dollars to completely privatize the state's EB-5 program.
  6. ...Bollen made possible the half-million-plus golden parachute that Benda took from GOED to Northern Beef Packers.
  7. ...Benda and Bollen tried to arrange EB-5 investment money for the Hyperion refinery (a doomed project) and the Keystone XL pipeline (which already has all the funding necessary and for which EB-5 money would have represented no added value for the pipeline or South Dakota other than the millions that Bollen and Benda would have skimmed in EB-5 fees).

EB-5 czar Joop Bollen committed several violations of state law and policy. Senate candidate and former governor Mike Rounds knew about those violations and continued to reward and defend Bollen.

But now, the very official word, from the Governor, the former Governor now Senator-Elect, the Attorney General, and the Government Operations and Audit Committee of the South Dakota Legislature, is that no one but Richard Benda did anything wrong in South Dakota's EB-5 program.

The research I've done, the conversations I've had, and the extraordinary efforts Mike Rounds and Marty Jackley and Larry Tidemann have undertaken to blame Richard Benda tell me that "Benda did it" is not the whole story, and maybe not even a true story.

Richard Benda could have told us many things to dispel that story. He could have told us what Joop Bollen and James Park were doing to Northern Beef Packers' finances in 2009. Richard Benda could have told us how Northern Beef made $95 million in EB-5 investment disappear into bankruptcy. He could have shared with us—with GOAC, with the FBI—his conversations with Bollen, Park, and Rounds during his tenure as GOED secretary. He could have told us what events carried him from the seemingly happy days of jet-setting to Southeast Asia and the Philippines through 2012 down to being pushed out of Northern Beef Packers and off the EB-5 gravy train in early 2013, bouncing from a consulting job in Sioux Falls to Russ Olson's old job at Heartland in Madison, and ultimately alone (we assume) to a shelterbelt near Lake Andes, where (we are told) he took his own life with a shotgun blast to his gut.

Maybe Benda saw the fix was in. Maybe he didn't think he could beat the evidence the state had against him, real or not. Maybe he saw himself out of the inner circle and all of the people who could have helped him beholden to power and money. Maybe he foresaw perfectly before that fatal shot that his former friends in the SDGOP would put EB-5 in one neat box and bury it with him. Maybe his death said, "Cory, forget EB-5. You can't beat these guys."

I spent this year trying to piece together the story Benda wouldn't tell, the story that would shift some of the blame piled on his defenseless corpse onto the shoulders of those still living and rolling in their ill-gotten EB-5 gains.

In practical terms, I failed. The GOP won its immediate objective: blow smoke on EB-5, win the election, keep GOP hands on all the levels of power we can keep a lid on the story. No one—not Bob Mercer, not Denise Ross, not Kathy Tyler and Patrick Duffy and the Democratic Party—managed to part that smoke with a narrative clear enough to explain to South Dakota voters that EB-5 was built on an absurd and illegal conflict of interest and that our next Senator Mike Rounds knew that and was fine with that.

And Joop Bollen remains a free man, unindicted by a curiously incurious Attorney General.

EB-5 killed Richard Benda. EB-5 did not kill the South Dakota Republican Party that hung Benda out to dry. But EB-5 still epitomizes the corruption and cover-ups of South Dakota's one-party rule. EB-5 remains a story that needs to be told. Richard Benda's unusual and suspicious death rightly riveted my attention and many others' on the EB-5 story in 2014. In that regard, Richard Benda is thus, sadly, the man of the year in South Dakota politics.

49 comments

As we discuss the merits of different districting schemes for better democratic representation, David Newquist notes that our Congressional delegation is leaving northeastern South Dakota out in the cold on constituent service:

When Democrats were in office, Aberdeen had three offices carrying on the business of government. Now it is down to the one office that John Thune grudgingly established when his party supporters insisted that he have a presence in our part of the state.

Noem has never offered much in the way of response or service to this part of the state. Rounds has indicated he will follow her lead.

The voters ultimately get what they ask for. In the cases of Noem and Rounds, nothing [David Newquist, "No Access to Congress for Aberdeen," Northern Balley Beacon, 2014.12.28].

Newquist provides a description worth reading of the value good staffers add for constituents on the ground.

If you're thinking that Rounds and Noem are shunning Aberdeen as a partisan swipe at all those Herseth/Wismer/Knecht Democrats up in northeastern South Dakota consider these election numbers: Nearby Day, Marshall, and Roberts counties picked Rick Weiland over Mike Rounds by slim margins (5%, 0.5%, and 1.5%, respectively). Brown County itself, which Aberdeen seats, gave Rounds an eleven-point edge. To the west, Rounds doubled up and more on Weiland, 54–24, while Charlie Hoffman and his neighbors delivered McPherson County to Rounds 66–17. Noem beat Corinna Robinson in all six of those counties this year, from a 9.5-point margin in Day to 63.8 points in McPherson.

18 comments

In a toothless column whose only apparent purposes are to (1) fill a slow news weekend with useless chatter, (2) maintain access, and (3) get a last squeeze or two from all those folks Googling "South Dakota" and "jerk", Jonathan Ellis pats South Dakotans on the back for not electing arrogant jerks to Congress.

Ellis wraps his non-headline around how rarely South Dakota's congressional staffers bad-mouth their bosses:

Staffers of South Dakota’s current and former congressional members don’t tell those kinds of stories. Sure, their bosses might be demanding. That is, after all, how you get elected to Congress: Setting and then achieving goals and demanding success. Politics can be tense, and maybe tempers can flare. But at the end of the day, South Dakota’s congressional members have gotten high ratings from their staffers [Jonathan Ellis, "S.D. Doesn't Send Jerks to Congress," that Sioux Falls paper, 2014.12.27].

Yeah, Congress stinks, but not my Congresspeople! That fantasy is how we re-elect 96% of incumbents.

Ellis's claim is as valid as saying that since GOAC didn't say much bad about Joop Bollen or Mike Rounds, South Dakota's EB-5 program must not have had any arrogant jerks other than Richard Benda doing monkey business. It could be that we don't hear "horror stories" about our Congressional delegation because our Midwestern-German-Norwegian-Lutheran reticence keeps staffers from blabbing about their bosses more than their New York and California counterparts (though Ellis gives us no out-state examples; he just asserts that monsters abound elsewhere and tucks us into our safe little beds of self-satisfaction). It could well be that former South Dakota Congressional staffers still have bread to butter and speaking ill within the small, close-knit South Dakota political network would bring out something other than butter knives. It could be that reporters embedded in that same network can't afford to go digging for, much less publish, dirt on our two Senators or our sole Representative.

But hey fine great—take Ellis at his word. Johnson, Thune, Noem, Daschle, Herseth Sandlin—all nice people, and we're all darned nice for electing them. Ellis even mentions Pressler, whose fond former staffers launched perhaps the sweetest ad of South Dakota's 2014 Senate campaign.

Wait a minute: speaking of Rounds, where is he? Ellis makes no mention of the newest member of South Dakota's "Not a Jerk" Club.

Well, when you can't say something nice, don't say anything at all. Maybe Ellis is just embodying one more example of what wonderful people we are. Or maybe it's just passive aggression.

10 comments

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