Sorry, Jeff Barth: your lawsuit is already too late to stop the state from destroying some EB-5 evidence. Seth Tupper finds the state deleted Richard Benda's e-mails just weeks after he jumped the ship of state with his half-million-dollar life preserver from Mike Rounds... in accordance with state policy:

The policy says that when employees delete an individual email, that deleted email is retained by the system no longer than 37 days; when an employee leaves state government, the employee’s entire email account is deleted as soon as 30 days later.

So last spring, when investigators were examining records from Benda’s final days in office for evidence of criminal activity, there was no state email account of his to comb through. Investigators obtained and re-created some emails through other investigative means, according to state Attorney General Marty Jackley, who acknowledged the task was made more difficult because of the deletion of Benda’s email account [Seth Tupper, "SD Email Policy: Don't Ask, Don't Keep," Rapid City Journal, 2014.09.28].

Governor Dennis Daugaard sends his poor spokesman Tony Venhuizen out to say silly things about how hard it is to store e-mail:

Venhuizen said the state’s current email system comprises 11 terabytes of storage.

“That’s large, and for that reason, backing up the older messages is kept to a minimum to keep down the expense of storing multiple copies,” he said [Tupper, 2014.09.28].

Tupper snorts milk onto his notepad and points out that one can buy a 12-terabyte external storage unit for $2,200. But always buy for the storage you'll need later, not the storage you need now. For $2,200 we can get order one Western Digital 12-TB unit for the current e-mail system for $650 and a Buffalo 16-TB unit for the next five years of e-mail for $1,317, have someone swing by Best Buy and grab three 1-TB portable drives for $62 a pop, and still have $47 left to take our tech guy out to Red Rossa.

The technological and financial difficulty of storing state e-mails for investigative and historical purposes is trivial. Using those portable drives, we can get a terabyte of storage for $62. Try storing that much information on paper, at two kilobytes per typed page (remember, kilo- means thousands; tera- means trillion), and you'll need one million reams of paper, which at a dollar a ream would cost one million dollars. Multiply that by the 31 terabytes of storage I just priced for the state at Amazon and Best Buy, and we're going to need 64 more EB-5 investors to turn Northern Beef Packers into Northern Leaf Papers.

Archiving the state's e-mails is no big deal. Appropriations, move a decimal point somewhere and buy the governor some hard drives.

p.s.: Seth Tupper appears to be back in his element. After a few months as publisher at the Mitchell Daily Republic, he's back in the game writing political stories for the Rapid City Journal. Maybe I'm just optimistically imagining things, but I sense a certain pent-up enthusiasm unleashed in his hefty report on the state's memory-hole correspondence policy. Perhaps Tupper realized about himself and journalism what I know about myself and teaching: offer me a promotion to principal or superintendent, and I will say no thank you. Some of us are born for the front line.

29 comments

The South Dakota Board of Regents has been gathering evidence on the EB-5 scandal for over five years, ever since it discovered that the EB-5 coordinator who worked on the Northern State campus, Joop Bollen, concealed a lawsuit against the state connected to his January 2008 no-bid contract with himself. As shown by the collection of invoices from a California law firm handling the Darley v. SDIBI lawsuit and the resulting arbitration for the Regents, the Regents have a large collection of correspondence, legal pleadings, and depositions that illuminate what Bollen and his associates were doing, who in state government knew about it, and when they knew it.

Perhaps the single most illuminating document in the Regents' possession is the April 2014 deposition of Joop Bollen. According to an invoice submitted to the Regents by Garcia Hernández Sawhney & Bermudez on May 22, 2014, attorney Chaka Okadigbo spent 35 hours preparing for this deposition, then attended the interrogation of Bollen for 17.5 hours spread over three days, from April 16 to April 18 (two hours of homework for every hour in class—just like college!).

6546-Apr14-excerptp2-BollenDeposition

Garcia Hernández Sawhney & Bermudez, invoice #6546, submitted to South Dakota Board of Regents, 2014.05.22, excerpt, p. 2

6546-Apr14-excerptp3-BollenDeposition

Garcia Hernández Sawhney & Bermudez, invoice #6546, 2014.05.22, excerpt, p. 3

Garcia Hernández Sawhney & Bermudez, invoice submitted to South Dakota Board of Regents, 2014.05.22, excerpt, p. 5, showing travel expenses for Chaka Okadigbo

Garcia Hernández Sawhney & Bermudez, invoice #6546, 2014.05.22, excerpt, p. 5, showing travel expenses for Chaka Okadigbo

An invoice submitted March 27, 2014, shows that Okadigbo spent one full work day and part of another in February preparing for the Bollen deposition. At $300 per hour, plus $2,200 in travel expenses, the Regents spent over $20,000 preparing for this deposition.

It's not the price tag that makes the Bollen deposition transcript the most valuable legal document in South Dakota today. It's the fact that, as far as we know, the Regents are the only entity in South Dakota in possession of statements from Joop Bollen under oath about his management of South Dakota's EB-5 program.

It's possible Bollen didn't say much; just as he didn't want to tell the Regents about the Darley lawsuit in 2008, he expended great effort after he quit his state job to shield himself from Darley's ongoing litigation behind the façade of his private corporation. According to a May 21, 2012 invoice, the Regents were working on a legal strategy to secure Bollen's testimony.

Garcia Calderón Ruíz invoice #5446, 2012.05.21, excerpt. (Click to enlarge.)

Garcia Calderón Ruíz invoice #5446, 2012.05.21, excerpt. (Click to enlarge.)

Interestingly, in August 2013, the Regents appear to have worked to avoid a Bollen deposition. According to an invoice submitted by its California lawyers on September 26, 2013, Bollen was demanding indemnity and release from the Regents in August 2013. Attorney Okadigbo discussed this issue by correspondence with Bollen, Bollen's lawyer Jeff Sveen, and Regents' counsel James Shekleton.

6170-Aug13-excerpt1

Garcia Hernández Sawhney & Bermudez, invoice #6170, 2013.09.26, excerpt, p. 2

After further correspondence with Sveen about "antecedent conditions" to an interview, Okadigbo came to South Dakota and interviewed Bollen for four hours on August 9, 2013.

Garcia Hernández Sawhney & Bermudez, invoice #6170, 2013.09.26, excerpt, p. 2

Garcia Hernández Sawhney & Bermudez, invoice #6170, 2013.09.26, excerpt, p. 2

The Regents insist that they have made no deal with Bollen, but at the end of August 2013, Okadigbo prepared and filed opposition to Darley's application to depose Bollen.

Garcia Hernández Sawhney & Bermudez, invoice #6170, 2013.09.26, excerpt, p. 3

Garcia Hernández Sawhney & Bermudez, invoice #6170, 2013.09.26, excerpt, p. 3

The invoices do not make clear exactly what happened next, but it would appear the April 2014 deposition was part of Darley's discovery process. While the Regents may have had questions of their own about Bollen's activities, Okadigbo's attendance at Bollen's deposition may have been intended to keep as much information off the record as possible in anticipation of the Darley v. SDIBI arbitration that took place in California from April 28 through April 30, 2014.

Bollen and Okadigbo may have spent much of the April 16–18 Bollen deposition muttering "Fifth!" or "Objection!" or whatever other hurdles one can raise during a deposition. But 17.5 hours of questions from Darley, follow-up questions from the Regents, and responses and non-responses from Bollen would likely tell us much more than Wednesday's legislative readers theater did about who knew and did what when in South Dakota's EB-5 program.

Regents, even if you didn't want Bollen deposed, you have that deposition. Bollen's statements are of great public interest. Do us a great public service: help us understand the state's EB-5 program by releasing the April 16–18, 2014, deposition of Joop Bollen.

18 comments

Hey, Burt Elliott! Pat Hale! You're paying attention to this letter to the editor in the Aberdeen paper, right?

Ed Fischbach of Mellette notes that Senator Al Novstrup (R-3/Aberdeen) was all about open records when the James River Water Development District stonewalled him. Fischbach thus finds it puzzling that Novstrup, who is now running for District 3 House, isn't fighting to open records in the EB-5 scandal:

Now there is an EB-5 scandal that is bigger than life in his own legislative district, and we don't hear a peep out of him. The EB-5 scandal has no-bid contracts, no open records, no accountability, pending lawsuits against the state involving upwards of $147 million, and he says nothing. The handling of EB-5 money in this state has everything that Sen. Novstrup complained about when he went after James River Water District and more, but this open government and open records legislator is now silent.

You won an award, Sen. Novstrup, so start demanding records and accountability from Mike Rounds, Dennis Daugaard and other state officials just like you did from James River Water District. Or, return your award [Ed Fischbach, letter to the editor, Abderdeen American News, 2014.09.21

Senator Novstrup hasn't been entirely silent on the EB-5 scandal. Last December, he agreed with the need to look into affairs in the Governor's Office of Economic Development, but he didn't sound terribly eager to do so, or to expand the scope of any investigation to look into local EB-5 failure Northern Beef Packers:

...[T]o Sen. Al Novstrup, R-Aberdeen, seeking a special session less than three weeks before the start of the regular session seems like a waste of money. If it’s needed, extra digging can be called for once the session begins in January.

One thing the state doesn’t have the authority to do is scour the finances of Northern Beef. It’s a private company, and even if there were fraud, the Legislature wouldn’t have that power, he said.

With EB-5 being a federal program, it seems appropriate that Johnson, a federal prosecutor, is looking into what happened, Al Novstrup said. But, he said, the Legislature can take a look at whether the state’s contract with the SDRC to do EB-5 work was properly followed. If it wasn’t, there might be penalties the state can impose, he said [Scott Waltman, "More Answers Wanted: Area Lawmakers Call for More Investigation of State Economic Development Efforts," Aberdeen American News, 2013.12.15].

Open-records crusader Novstrup certainly isn't among those calling now for Novstrup's neighbor Joop Bollen to testify under oath about his questionable profiteering as the state employee in charge of EB-5 from 2004 to 2009.

Elliott, Hale, Tornberg, Nelson, Page, Nordstrom, this is how you tune the EB-5 scandal to your local legislative races. Ask your Republican incumbents why they aren't fighting for more answers about a scandal that may have cost this state more than Mike Rounds's structural deficit. Ask your Republican incumbents why they aren't asking who knew what was happening in the Governor's Office of Economic Development and when they knew it. Don't let them hide behind their reheated stammerings of "But EB-5 is federal!" Legislators' willingness to investigate or ignore the apparent corruption in our state's economic development program raises a fundamental question of character that every candidate should answer this fall.

5 comments

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!

8 comments

Rep. Kristi Noem has chickened out of debating Corinna Robinson this weekend, but she will still be lurking around the State Fair. At 2 p.m. today, she will accept a "Friend of the Prairie" award on the Freedom Stage from the South Dakota Grassland Coalition.

If you want to talk to Congresswoman Noem about what she's done to deserve such an award (cutting subsidies to farmers plowing virgin prairie, but reducing the CRP maximum CRP acreage from 32 million acres to 24 million acres and CRP funding from $400 million to $250 million?) or to ask her questions that she might have faced in a debate with Robinson, the Princess directs you to contact her staff.

Worth nothing is the fact that Team Noem sends out notice of her appearance at the State Fair one day before it happens. Sometimes it seems as if Rep. Noem just doesn't want attention. Rep. Noem visited Madison Tuesday, but it was another of those surprise, invitation-only, elites-only visits that doesn't make the paper until after it's done. Her staff appear to have posted notice of that event the day it happened, minimizing the opportunity for the press and other interested citizens to come see their Congresswoman.

11 comments

Bob Mercer knows how to strike when the iron is hot. The South Dakota journalist asked Attorney General Marty Jackley to release the records of his investigation of Richard Benda's suspicious death last December. AG Jackley rebuffed Mercer on extra-legal pretense and got a state hearing examiner to back him up last May.

Now, just as the EB-5 scandal, which was torn open by Benda's death, begins to rain real fire on Jackley's political pals, Mercer shovels more coals into the furnace with a lawsuit to get the Benda death investigation records.

How a court will rule is up in the air. But for those of you keeping score at home, Mercer's lawsuit has already caused Jackley to commit two unforced errors in the form of two unnecessary and absurd statements.

First, Jackley claims to be a champion of openness:

"I would have been operating within my statutory authority to just flat-out deny access, and I did not do that," Jackley said. "I chose the route of openness and have been nothing but criticized for that" [David Montgomery, "Lawsuit Seeks Access to Benda Death Reports," that Sioux Falls paper, 2014.08.22].

Openness? Openness?! Please, Marty, don't hurt yourself. And the rest of you, don't hurt yourself laughing.

Second, while Independent gubernatorial candidate Mike Myers engages in a macabre re-enactment of Benda's death based on an allegation that Myers himself admits is "an undocumented, unsupported assertion," AG Jackley responds with an incredibly injudicious walk-back of his conclusion on Benda's death:

Jackley said he is confident in the suicide ruling but declined to expand on any evidence that supports that ruling except to site the number of entities involved in investigating Benda's death. The suicide ruling itself was made by a forensic pathologist, not by him or his investigators, Jackley said.

"I never said specifically it was a suicide. I said our findings are consistent with the cause and manner of death determined by the forensic pathologist," Jackley said [Denise Ross, "Gov. Candidate Doubts Benda's Death a Suicide," Mitchell Daily Republic, 2014.08.20].

Jackley's statement is factually, technically true. I noted the absence of an explicit declaration of suicide in Jackley's own words last November when he released the state's report on Benda's death. But why give the doubters and blog sensationalists who so grate his cheese with their speculation and misinformation a line like "I never said... it was a suicide"? The Attorney General has gone from saying "there are absolutely no credible facts or evidence calling into question" the suicide ruling to opening the door for Sam Kephart to come back and talk about the Chinese mafia.

Doubts linger, but the press has mostly adopted without caveat the interpretation that Benda committed suicide. Governor Daugaard has said Benda committed suicide. Why say any little thing to back away from that mostly accepted fact?

People say stupid things for a variety of reasons. Stupid people say stupid things, but I think we all agree Marty ain't stupid people. People may be tired from an exhausting statewide blog tour, but Marty is no blogger.

People also say stupid things when they are scared, under assault, and stressed out. And you know, with a political scandal dominating the news and the debates, with his pals and his own office getting bad press, with the ACLU and his buddy U.S. Attorney Brendan Johnson challenging South Dakota's Indian Child Welfare Act violations, Attorney General Marty Jackley just might feel a little harried.

128 comments

With the Nuclear Regulatory Commission coming to the Black Hills next week to hear public comment and consider evidence in the challenge to Powertech/Azarga's application for in-situ leach uranium mining in Fall River and Custer counties, Powertech watchdog Jim Woodward comes up with a couple of curious new developments:

  1. Back in May, Powertech bought some Tennessee Valley Authority data on over 4,000 boreholes and three aquifer pump tests that the TVA conducted in the Dewey-Burdock mining area in the 1970s and 1980s. Boreholes—i.e., paths through which water and pollution from in-situ leach mining could leak.
  2. That data could have some bearing on the contention of the Oglala Sioux Tribe and other official intervenors in the mining permit process that the final environmental impact statement on Powertech's proposal (completed before Powertech got that TVA data) lacks sufficient hydrogeological data on the impact ISL mining could have on the area. The data may also offer more perspective on more serious natural leakage at the site.
  3. The NRC told Powertech to show the tribe that data; Powertech is resisting that order, saying the TVA data is (in Woodward's words) "irrelevant to the evidentiary hearing."
  4. Even if the data is irrelevant, by balking at releasing the data up to this point, Powertech makes it difficult for opponents to see for themselves and study the data in time to effectively comment on it at the August 18 NRC hearing.
  5. And in business new that John Tsitrian will find interesting, Azarga was supposed to complete its reverse-takeover of Powertech by July 31. Azarga and Powertech have not completed that maneuver; instead they have extended the acquisition deadline to September 15.

Powertech uranium mining proposal, as well as its business arrangements with Azarga, are complicated. The public deserves as much data as possible to understand the risks and benefits. Powertech, help us out: let us see the TVA data.

4 comments

Hey, New Yorkers! Want a reason to be a bit miffed at South Dakota? Try reporter Joe O'Sullivan's list of the states that got the most Homeland Security dollars per resident in 2011. New York, where al-Qaeda terrorists killed 2,977 Americans and ushered in the police-state era, ranks tenth, at $4.70 per person. South Dakota, where terrorists haven't killed anyone since, well, ever (AIM debate, anyone?), ranks sixth, at $6.20 per person.

O'Sullivan notes that we'd have a hard time proving to our New York neighbors that South Dakota is really combatting terrorism with all that anti-terrorism money:

All that spending came in a state that arguably has very little threat of terrorism. According to a 2010 Washington Post report, South Dakota is one of 15 states that federal intelligence agencies ruled has "no specific foreign or domestic terrorism threat."

...a federal government report released in May has questioned South Dakota's ability to even measure whether the homeland security money is being put to good use.

"We were unable to determine the extent to which the [federal homeland security] grants enhanced the state's ability to prepare for and respond to disasters and acts of terrorism," according to the Department of Homeland Security Office of Inspector General Report. "The state does not have a system to measure preparedness" [Joe O'Sullivan, "State Gets Millions in Homeland Security Grants, But Where Does It Go?" Rapid City Journal, 2014.06.08].

We have a state government demanding more tests and more accountability before they'll deign to give schools any more money. But scare us with terrorism, and we'll throw all sorts of money at the police and never ask for proof that that money is addressing real threats and making us safer.

43 comments

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