The Washington Post has already picked up today's big story about Mike Rounds's admission that he knew his economic development chief Richard Benda was planning to cash in on the EB-5 funded Northern Beef Packers project that he and Rounds had promoted and did not question that conflict of interest. "New Development in Scandal Dogging Mike Rounds Could Spell More Trouble," headlines WaPo for all those national readers and potential donors. Dogging... more trouble... thank you, sir, may I please have another?

But now I see why some of my readers were initially so grouchy about that Sioux Falls paper's coverage of the story. The original headline posted online overnight* and on the printed front page is "Benda 'Misled' Me, Says Rounds."

That Sioux Falls paper, clip from front page of print edition, 2014.10.22

That Sioux Falls paper, clip from front page of print edition, 2014.10.22

At some point this morning, the editorial board realized the bigger story was not Rounds's continued effort to blame the dead guy (on the first anniversary of Governor Dennis Daugaard's get-ahead-of-the-story announcement that Richard Benda had been found dead of a gunshot wound), but Rounds's admission of silent complicity in Benda's (and Bollen's!) $550,000 gambit. "Rounds knew of Benda conflict in final days of term," reads the updated headline.

Dear readers, I'm interested to hear what you think of that Sioux Falls paper's evolving editorial position on this story.

Bonus Legs: As October Surprises keep rolling, KELO's Ben Dunsmoor wakes up and offers a one-sentence scoop: the FBI is still investigating South Dakota's EB-5 program.

*Update 17:08 CDT: Mr. Montgomery tells me the web headline hasn't changed since posted the story to his blog section of the paper's website last night. But just after midnight, someone at the copy desk posted the Benda-focused headline:

Earlier online headline, screen cap of Google Cache version of Montgomery's Rounds-Benda story, 2014.10.22 00:24 CDT

Earlier online headline, screen cap of Google Cache version of Montgomery's Rounds-Benda story, 2014.10.22 00:24 CDT

That's the version folks were sending me at breakfast. That online version has gone poof, leaving only the print world thinking the main point of the story is that Benda was naughty.

77 comments

Another South Dakota newspaper editor throws the B.S. flag at Republican Senate candidate Mike Rounds on the EB-5 scandal:

Brian J. Hunhoff, editorial cartoon, Yankton County Observer, 2014.10.17

Brian J. Hunhoff, editorial cartoon, Yankton County Observer, 2014.10.17

YCO editor Brian J. Hunhoff pens the above cartoon to accompany an editorial giving South Dakota a failing grade on open government. Hunhoff says Rounds's blame-dodging exemplifies our opaque government and insults the voters:

The blame-dodging by former Gov. Mike Rounds would be entertaining if it wasn’t so troubling. Of course, Rounds wants to keep his $9 million Senate campaign afloat, but he looks foolish denying any responsibility for a scandal that occurred on his watch. Many of his excuses insult our state’s collective intelligence.

Rounds’ arrogance was apparent in his refusal to appear in person before the impotent Government Operations and Audit Committee. His defensiveness was revealed in snarky written answers to questions about EB-5. His sloppiness was evident after one key response was quickly proved untrue and he asked to change his answer [Brian J. Hunhoff, "State Still Earning Bad Grades in Open Government," Yankton County Observer, 2014.10.17].

The Yankton County Observer echoes the disdain for Rounds that the Mobridge Tribune registered last week with Katie Zerr's indictment of Mike Rounds's dishonesty. How many more South Dakota newspapers will have the courage to deem Mike Rounds unworthy of South Dakota's trust.

18 comments

Rick Weiland wins more pretty good national press. Bloomberg sends filmmaker Griffin Hammond to shoot this lovely five-and-a-half-minute snapshot of the South Dakota Senate race. The video revolves around the stirring Weiland narrative. On the side, it shows Pressler as the earnest Independent, Howie as the typical Tea Partier, and Rounds, the once frontrunner, as, well, smiley but unexceptional and uninspiring.

"From Peever to Pukwana to Pringle"—that should be the header on every Weiland ad, letter, banner, and bumper sticker.

7 comments

South Dakota Republicans continue to respond to charges of crony capitalism in Mike Rounds's EB-5 program by attacking the press with cries of Defamation!

The Democratic Senatorial Campaign Committee this week pointed out that as governor, Mike Rounds "gave special tax breaks to a shady, offshore corporation" to keep his failing Northern Beef Packers project afloat. The DSCC made that statement in this broadcast ad:

The SDGOP sics Woods Fuller Shultz & Smith PC on KEVN and other TV stations that have broadcast the ad:

The "shady off-shore corporation", Epoch Star Limited, represented by a prominent Sioux Falls lawyer, petitioned the State Banking Commission to determine if it was subject to South Dakota laws regulating loan companies and mortgage lenders. The State Banking Commission, acting independently as required by South Dakota law, reviewed evidence presented to it and ruled Epoch's proposed loan to Northern Beef Packers did not subject it to the money lender or mortgage lender/broker statutes. The decision in effect meant that Epoch was not subject to the income tax South Dakota imposes on financial institution profits [William Taylor, attorney for South Dakota Republican Party, letter to KEVN, 2014.10.15].

First, the Woods Fuller lawyers and the SDGOP should get their candidate back on the script. He was bleating counterfactually to Denise Ross Wednesday that Epoch Star, "just like any other institution," had to "get licensed." (Someone on Team Rounds is trying to work up the guts to say, "Mike, do your homework, or shut up!")

Second, the fact that a "prominent Sioux Falls lawyer," Steven Sanford, represented Epoch Star does not render false the DSCC's statement. Epoch Star is shady—we have no idea who they are. Epoch Star is an offshore corporation, a shell inside a shell inside a foreign company.

Third, Mike Rounds did give Epoch Star a special tax break in 2010. Rounds appointed Roger Novotny banking director in 2004. Banking commissioners serve three-year terms, so Mike Rounds would appear to have appointed every member of the Banking Commission, which approved the Epoch Star tax break at the end of June 2010. And Rounds's own economic development chief, cabinet member Richard Benda, represented the Rounds administration before the Banking Commission to urge approval of the tax break to revive the Governor's stalled legacy project. The Rounds Administration made Epoch Star's tax break possible.

And in the common vernacular synecdoche in which we refer to an organization by its head, "Mike Rounds gave special tax breaks to a shady offshore corporation."

The South Dakota Republican Party launched a similar specious attack on the free press last week with its bogus assertion that auction is a fighting word. It's remarkable how whiny South Dakota Republicans get when faced with the ugly facts about their crony capitalism and corruption.

KEVN, other broadcasters, don't let Rounds and the SDGOP bully you. You are much better suited to recognizing and publishing the truth than they are.

I think we need to be grateful we live in a state where we can get this kind of thing done with dispatch.
—Steven Sanford, lawyer for Epoch Star, South Dakota Banking Commission hearing, 2010.06.29.
64 comments

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.

48 comments

I don't watch much MSNBC. But when I do, it's gosh-darned awesome... with Rick Weiland laying out how he can close the gap and win the U.S. Senate:

Top lines no pundits imagined one year ago:

  • Ed Schultz reminds us that Tim Johnson kept his seat in 2002 thanks to the Indian vote. Schultz then reminds us that the Indian vote this year will be strongly against the Keystone XL pipeline. Implication: contrary to John Tsitrian's thesis, Keystone XL could put Weiland over the top.
  • Weiland expects big money to come after him on Keystone XL, but he unashamedly blasts away at the lies Mike Rounds tells us to justify the pipeline.
  • Schultz says he'll give us his full report on EB-5 next week Monday... because, I'll bet, he realizes it's a complicated story that will take some time to tell. That means that while Rounds gets beat up by the Beltway buzz over the entry of the Mayday PAC and national Dems on behalf of Rick Weiland, Rounds gets a whole 'nother dose of heartburn next week when the national press has had time to get its head around the complexities of EB-5.
  • "Mike Rounds really has this air of corruption around him," says progressive politicker Adam Green. "Rick Weiland is the perfect candidate at the perfect time."
  • "Isn't [Weiland] today's Democrat?" asks Schultz. "Yeah," says Green. "...This could be the defining race that puts Democrats over the top."

By the way, Rick Weiland is getting more free national press in two days than Mike Rounds has drawn in two years:

Remind me, Mike, what are you paying your people for?

49 comments

Reporter Kevin Woster feels so bad for Mike Rounds that he responds to the beating the GOP Senate candidate took this week by posting, without commentary or analysis, twelve reasons that Team Rounds says are why we "oughta like Mike."

Now let's be fair: Woster is handing the blog mic to all of the Senate candidates. He posted Pressler's twelve reasons on Monday.

But Woster's sympathy for Rounds extends so far as to "moderate" (i.e., remove from publication), this response to Smiling Mike's twelve reasons:

Hmm, just 139,999,981 more, and he’ll have offered more reasons than Kathy Tyler offered for voting against Rounds on Monday [CA Heidelberger, attempted comment, KELOLand.com, 2014.09.11].

I guess Rick Weiland already has 140 million reasons to vote for him. Susan Wismer is offering the same 140 million reasons to vote for her for Governor: she says that, if elected, she'll sue to get that money back, and she'll fire anyone who knew about the fraud and corruption going on in the Governor's Office of Economic Development and elsewhere in state government.

How many more reasons do you need not to vote for the current one-party regime?

75 comments

You want to talk about recycling old news? Forget Pat Powers's blogular burpage trying to distract us from a new and important piece of the Rounds Administration's facilitation of Joop Bollen's rule-breaking exploitation of the public trust. Let's look at KELO TV's late-to-the-party coverage of EB-5.

Tonight KELO reporter Ben Dunsmoor whoop-dee-hoos "his" discovery of a letter from U.S. Senator Charles Grassley (R-Iowa) that he asserts may have led to the federal investigation of South Dakota's use of the EB-5 investment program. "His" discovery results from a review of over 700 pages KELO received from a FOIA request this summer.

700 pages, and all KELO can find is recyclage of a story Bob Mercer broke with much deeper context ten months ago:

[Texas lawyer Kirby] Roberts said in an interview Wednesday that he contacted the office of U.S. Sen. Charles Grassley, R-Iowa, in late 2012 with the same information he had given to the FBI.

Roberts said he did so because it appeared to him that the FBI investigation had paused or stopped in its investigation and wasn’t looking at the Huron plant.

Shortly after receiving Roberts’ information, Grassley’s office sent a letter to the U.S. Citizenship and Immigration Services on Feb. 7, 2013, regarding “an EB-5 Regional Investment Center in South Dakota.” The only Regional Investment Center was the South Dakota Regional Center based in Aberdeen.

Grassley included a letter from another person with his letter. That second letter hasn’t been publicly released by Grassley’s office. The public copy of the Grassley letter has that person’s name blacked out three times.

Grassley’s letter told USCIS: “(Blacked out) has outlined possible violations associated with the EB-5 program. I would appreciate any assistance you could provide pertaining to this matter. Please contact (blacked out) with questions regarding this letter” [Bob Mercer, "FBI Probe of Meat Plants Evolved from Church Dispute," Rapid City Journal, 2013.11.15].

Mercer was tracing the evolution of the federal investigations from Roberts's investigation of matters pertaining to the Hutterville Hutterite dispute and connections to the Dakota Provisions turkey processing plant in Huron. KELO reports none of that fascinating angle of the story. Dunsmoor only spices the story with mention of Senator Grassley's political affiliation with South Dakota's sagging Republican Senate candidate Mike Rounds, an angle already spotlighted on this blog since November 1, 2013 (see here, here, and here).

Dunsmoor committed similar rescoopage on August 18 when KELO ran his story on the exclusive no-bid contract Rounds's economic development office handed to Joop Bollen the day after Bollen quit his state job at NSU. Dunsmoor's story addressed the same details I reported on December 12, 2013. The only value Dunsmoor added to my reporting was getting Rounds spokesman Rob Skjonsberg to trot out the claim that EB-5 added over $600 million to South Dakota's economy... which seems about as reliable as Rounds's claim that he'd raise $9 million for his Senate campaign.

By no means should KELO ignore the EB-5 story just because Bob Mercer or I or other reporters discover and explain certain details of it first. It is an important and complicated story, and as many reporters as possible should be telling as many South Dakotans as possible about it. But there's no need to reinvent the wheel. Had KELO paid better attention, they wouldn't be playing catch-up ten months later.

47 comments

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