Last week some of my loyal readers were talking about producing a video ad to call out Republican Senate candidate Marion Mike Rounds. It looks like 2008 Republican Senate candidate Sam Kephart has beaten us to it:

When asked about the EB-5 scandal in his administration, Mike Rounds said we have not lost any taxpayer money. That's simply just not true. According to the report from the Associated Press, state agencies show about 4.3 million tax dollars were lost. It's time for Mike Rounds to tell the truth about EB-5.

It's also time for Mike Rounds to tell the truth about his budget deficits. The Senate Conservative Fund reports these facts:

  1. Mike Rounds expanded state bureaucracy by 1500 full-time employees.
  2. Mike Rounds supported higher cigarette, alcohol, and telephone taxes.
  3. Mike Rounds supported higher Internet taxes.
  4. Mike Rounds supported the TARP bailout program for Wall Street banksters [Citibank sure liked it, but can anyone find Rounds on the record on TARP?].
  5. Mike Rounds supported Obama's "stimulus" spending.
  6. Mike Rounds supported the fiscal cliff deal, raising taxes on 80% of Americans.
  7. Mike Rounds refuses to rule out raising federal taxes in the future.

It's time for Mike Rounds to tell the truth about how much more he spent and how he made state government bigger.

The state budget nearly doubled during the time Mike Rounds was governor. Mike Rounds needs to come clean with South Dakota taxpayers [Sam Kephart, "Mike Rounds Should Come Clean," Liberty Today, 2014.05.03].

Note that Kephart's charge that Rounds increased state employment by 1,500 requires some attention to the calendar. State FTEs in FY2003 were 13,011.6. State FTEs in FY2011 were 13,644.5, for a net increase of 632.9. To get the 1,500 FTEs, you have to look at FY2010, when state FTEs were 14,556.6, an increase of 1545 before Rounds had to cut state jobs post-recession and post-stimulus.

Ditto on the "state budget nearly doubled" claim. FY2003 totaled $2.521 billion. FY2011 totaled $4.131 billion ($30M higher than FY2010). That's a 63.9% increase, shy of my "nearly doubled" threshold.

Fact-check as we will, in 90 seconds, Sam Kephart delivers the ideal anti-Rounds ad for the GOP primary. No personal attacks, all policy details, wrapped around one core message, the most damning thing you can say about a politician: Mike Rounds isn't telling the truth. Break that video into three 30-second chunks, and you've got powerful primary TV.


Sam Kephart has livened my blog up with his inside observations on SDGOP politics and his speculation about the China connection to the GOED/EB-5/NBP scandal. Now Kephart's so good, he can even make Gordon Howie's blog worth watching. In this morning's rollicking "Liberty Today" video, Kephart reaffirms a point he made here last September: he says a third party is the only way to reform politics.

Kephart tells Howie that both the Republican and Democratic parties are trapped in "insiderism" and a "lack of transparency." He says trying to bolt a few conservative reforms onto the GOP platform is like putting "chocolate icing on one of [Gordon's] cowpies... it's still a cowpie!" A third party, crafted de novo, is the only practical solution.

Barely clinging to control of the interview, Howie asks Kephart, "Are you gonna run?" Kephart pauses a little longer than his previous statements have led me to believe he would, then says "There'd have to be certain conditions in place... I don't see those conditions."

Kephart asserts that he could find support for a third party among "many people on the left side of the aisle who are good patriotic fiscal conservative Americans." This practical common-ground seeking is too much for Ed Randazzo, who goes from rolling his eyes to jumping into the frame from offstage to challenge Kephart.

There ensues an amusing battle of bleeped profanity (yes! Gordon! Go for ratings!) gracing a significant political divide: Randazzo holds that third parties simply undermine real Republicans, but Kephart says, "I don't want to run as a Republican."

Kephart recalls the guff he took from Republicans in 2006 for supporting exceptions to the abortion ban on that year's ballot. Referring to Kephart's purported allies on the left side of the aisle, Randazzo retorts, "You want me to take a fiscal conservative who wants to kill babies?" Kephart replies with eminent pragmatism that an abortion ban with rape, incest and health-of-the-mother exceptions would have passed and achieved 98.5% of what the abortion ban supporters wanted. "98 and a half percent to me is better than a hundred percent of nothing."

"God wants all," says Randazzo softly.

Kephart shoots back, "We don't even havee an argument there. I'm talking about practicalities. You can be an idealist or an ideologue... there's a distinction."

An idealist or an ideologue... indeed, that strikes me as a distinction worth discussing, for any serious politicians trying to get elected and solve real problems. Thank you, Sam, for prodiving Gordon Howie with some rare good television!


Regular readers know I enjoy Sam Kephart's commentaries. The 2008 GOP Senate primary candidate offered us his penetrating insights on South Dakota Republican Party politics and "corporate kleptocracy" in a wide-ranging interview this summer.

This weekend Kephart wins promotion from the comment section with his take on the scandal surrounding the Governor's Office of Economic Development, South Dakota's use of the EB-5 visa investment program, and Richard Benda's death. Kephart says political pressure and maybe even the Chinese Mafia are keeping Attorney General Marty Jackley and Governor Dennis Daugaard from tearing this scandal open and pursuing answers with the necessary vigor.

This entire scandal stinks to high heaven.

I know, like, and support Marty Jackley and I'm sure he is in exquisite pain over this... divided between what he knows is the right thing to do, which is to rip this case WIDE open with no holds barred and no favors done, versus having to be cautious to protect his pecking order status within the State GOP, which would suggest (or lean on him) that he give the benefit of the doubt to his political seniors... which I'm sure is going on behind the scenes.

I know some things about EB-5 investments; they can be great and legitimate, but many are fat money scams.

Has it occurred to anyone of our senior elected officials that maybe, just maybe, Chinese Mafia (Triad) money was somehow involved and scrubbed through this meat packing deal? It wouldn't be the first time.

Like the Russian Mob, these Chinese boys can play rough.

And even the FBI itself has recently been tainted with EB-5 money involving Chinese investors and some Las Vegas developers with mob connections:

The potential scandal here is WAY BEYOND anything South Dakota has experienced before and, quite frankly, is properly prepared to correctly investigate, good guy Marty Jackley and his fine staff notwithstanding.

Governor Daugaard and Jackley need to put together a Blue Ribbon panel (none of the Governor's cronies) and give them carte blanche to hire outside world-class forensic investigators, beyond the Feds and our DCI, and to secure a retired top-notch prosecutor from elsewhere to head-up the investigation and put it firmly to bed one way or the other.

This issue is NOT going to simply blow over no matter how much hand-wringing, log-rolling, and head-shaking go on.

Even if Benda did commit suicide, which I don't believe, then one must ask what drove him to do it and why? What did he know or fear that was so oppressive to his future prospects that he would take his life? Duh...

Too many deep questions and too many blandishments at this point for my satisfaction [Samuel Kephart, comment, Madville Times, 2013.11.30].

Kephart follows up noting that very little business happens in China without government involvement. He suspects the bankrupt EB-5-dependent Northern Beef Packers plant in Aberdeen was really a money-laundering operation gone awry. Kephart also asserts that political pressure is muzzling at least some of the press:

I had dinner last evening with Shad Olson (KNBN-TV) and he has expressly been forbidden from doing ANY investigative journalism WHATSOEVER on this story by the owners of the station. Why is that? Shad is very good at this sort of story (he's won a national Emmy previously); Jim Simpson needs to empower him here, not hold him back [Sam Kephart, follow-up comment, Madville Times, 2013.12.01].

Kephart is just one more example of South Dakotans across the political spectrum (Democratic Rep. Kathy Tyler, Independent gubernatorial candidate Mike Myers, the Mitchell Daily Republic, up to 90% of Madville Times readers...) who see that the story Jackley, Daugaard, Rounds, and their mouthpieces are spinning doesn't add up. Kephart's commentary demonstrates a Watergatian erosion of public trust. To restore that public trust, legislators, candidates, and voters need to demand answers and action.


Here's lucky #7, the last portion of my interview with Sam Kephart. He ran for the GOP Senate nomination in 2008 but got beat by party favorite Joel Dykstra, who in turn got beat by Tim Johnson.

(By the way, Dykstra is now off making probably more money than a Senator as chief financial officer of Swift Fuels and fiddling with the Broin family assets in RMB Associates. Kephart says he's making videos and Web content... but I think he's really a shadowy operative for the anti-Illuminati.)

Kephart's one and only run for office came before the 2010 Citizens United ruling, which opened the door for corporations and labor unions to spend all they want on political speech. Kephart doesn't think Citizens United would've have helped him win, since he wasn't exactly preaching to the corporate choir. Kephart is open to overturning Citizens United (Ken! don't shut Sam off yet!), but he proposes a raft of much larger reforms to save us from our corporate fascist overlords.

Heidelberger: The Citizens United 2010 ruling lifted restrictions on independent campaign expenditures by corporations, labor unions, and other organizations. Would that ruling have made a difference in your 2008 campaign? Did this ruling hurt the political process?

Samuel Kephart, 2008 GOP U.S. Senate candidate

Samuel Kephart, 2008 GOP U.S. Senate candidate

Kephart: That’s hard to say whether that ruling would have helped my campaign. I’m not aware of any organizations who “got” what I was about and that were ready to step-up and aggressively support my candidacy, had that option been available.

Insofar as whether this hurts our political process, I’d have to say “yes.” While I’m a big free speech proponent, I’m not so convinced that those rights extend to corporate, union, and special interests.

Big money, from any source, has essentially destroyed our democratic republic and replaced it with corporatist fascism masquerading as democracy.

It’s all total theater of the mind bull---- packaged to give us, the voters, the appearance of real choice... when in fact there is none. You can pick A or B, but in reality you are always getting C, who stands behind the curtain and runs our shadow government.

Heidelberger: Should we amend the Constitution to overturn Citizens United and restrict political speech by corporations?

Kephart: No, we need a major overhaul of lots of things in the Constitution, like overhauling our existing tax system and replacing it with the “Fair Tax” or something close to it.

Let’s set-up term limits and institute public funding of campaigns, while eliminating donations from special interests.

How about instituting a balanced budget amendment?

Let’s resolve to become more insular and less likely to deploy troops all over the world. Our sticking our nose into much of the world’s political business is costing us dearly in lives and treasure with little long-term positive effect. It’s simply breeding more terrorists who want to take us down. [Editor's note from CAH: Kephart made this comment well before the President announced his intention to seek Congressional approval to attack Syria.]

How about getting rid of that fat, ugly monster... the military-industrial complex?

How about a Constitutional amendment that says our borders must be tightly closed and monitored carefully?

Sadly, you can’t make chicken salad out of chicken s--t, no matter how much mayonnaise and mustard you add. That’s where we are now legislatively... and it just gets worse with each new Congressional session and President.

Heidelberger: May I redirect on the final question about Citizens United? Are you saying that we should not amend the Constitution to over turn Citizens United and restrict political speech by corporations? Or are you saying that you'd support such an amendment but that we have to tackle other, much larger problems either first or in tandem with such an amendment to solve the problems it's meant to address?

Kephart: It's the latter; Citizen's United needs to be undone and go away.

There are so-called larger fish to fry if we're going to re-jig the US Constitution.

Obviously, Citizens United is important, but I think it pales in comparison to some other vexing issues.

* * *

In my interview with him, Kephart offered a pretty stiff critique of what he views as a failed two-party system that puts forth beauty queens instead of problem-solvers, that excludes newcomers in favor of insiders who are good at being cogs in a bigger, mostly behind-the-scenes machine.

Might he just be grumpy that he lost in 2008? Kephart dismisses that dismissal with these closing words:

Kephart: Some people accuse me of having sour grapes about not winning my primary; that’s simply not true.

My ongoing public criticisms of politics, both here in South Dakota and in Washington, D.C., are my way of trying to wake folks up to how totally rigged our so-called democracy is; its a disgrace and getting worse by the day.

As I like to say, those who fail to watch the pot will end up in it. That’s where we are and soon to come events will prove me a truth-teller.

* * *

Friends and neighbors, let's thank Sam for taking time to think through these issues and write his thoughts down for us. And Stace and Rick, maybe you both should call Sam about shooting some videos for your campaigns.

1 comment

The point of my interview with Sam Kephart was to tap his experience as a GOP Senate primary candidate in 2008 to offer guidance to candidates walking that road in 2014... and to get some smart and salty quotes.

Kephart does not disappoint. In Part 6 of our conversation about South Dakota politics, Kephart says he sees a GOP primary electorate becoming disenchanted with its own machine. To beat the "weak buffoons" currently winning our beauty contests, Kephart says serious candidates should bolt from both parties and start a third party.

And in clear proof that he's not running for anything this cycle, Kephart says we voters are generally uninformed dumb-asses. Primary candidates, here's Sam uncensored!

Heidelberger: Has the GOP primary electorate changed since 2008? If so, in what ways?

Kephart: Yes, I believe the GOP primary electorate has, indeed, changed since the 2007-2008 primary season. I know at least a dozen very savvy and hard-working former party loyalists, officers, and elected officials who have walked away from the party. I did in August of 2010. I no longer attend ANY party functions, nor do I give ANY money to the State GOP. It’s an utter waste of time and resources.

While there are many dedicated individuals and candidates (many of whom I still support) within our party, the GOP group-think is now simply utterly repulsive to me. Both major parties, D’s and R’s alike, are completely dysfunctional and out of touch with America’s all to obvious “real and present dangers.”

The Tea Party-types have splintered off from the conservative Republican wing. Their hearts and minds are in the right spot, but it’s been damnably tough for them to field enough successful candidates to wrench back control from the hideously compromised leaders who fill most of the power slots in D.C.

Traditional GOP party loyalists view the Tea Party folks with a healthy dose of both grudging respect and arrogant disdain. They are admired for having the strength of their convictions, but dissed at the same time for being too doctrinaire and uncompromising.

HINT: How can you be too tough when it comes to protecting the inherent values and rights enumerated in the U.S. Constitution?

Here in South Dakota, the Tea Party is strong enough to give wishy-washy phony conservatives and RINOS primary competition. But they seem to have a very difficult time organizing their efforts for the long haul.

Aside from the Tea Party folks and a handful of other serious players, I’d say we have a generally uninformed electorate here in South Dakota. Our election results skew towards looks and likability, rather than vision and substance. How do I know that?

Ask yourself WHO was the last statewide or Federal elected official whose vision, words, and follow-through actions actually touched, moved, or inspired you. I’ll bet you’ll be stumped for an answer.

According to the latest Rasmussen Poll (July 5th. 2013), just seven percent (7%) of likely US voters think Congress is doing a good or excellent job. This shameful number says way more about the dumb-ass folks who stupidly vote without doing their due diligence than it does about the weak buffoons they keep re-electing. As a group, we don’t like what’s going on, yet we keep sending the same party players and insiders back to their jobs.

Duh! How’s that working for us?

I’m totally convinced that both major parties need a clean sheet re-design of their entire power structure and players. That’s very unlikely to happen. In its absence, I think the ONLY possible salvation for our country is for some savvy and well-heeled folks to launch an effective third-party effort.

Our current two-party system is an abject failure. How do I know? Just look at where we are. As the Bible clearly states, you shall know a tree by the fruit it bears. Our Federal governmental fruitage is clearly rotten and poisonous.


2008 GOP primary Senate candidate Sam Kephart has a lot to say about this year's primary race. After getting his advice on how much money it takes to run a serious campaign (million, million-five, says Kephart), I asked the former candidate and current gadfly what he'd do if he were running in the already crowded 2014 field and what those candidates can learn from that last big Senate primary in South Dakota.

Heidelberger: If you were running in the 2014 GOP Senate primary, what would you do differently from your 2008 campaign?

Samuel Kephart, 2008 GOP U.S. Senate candidate

Samuel Kephart, 2008 GOP U.S. Senate candidate

Kephart: First off, I wouldn’t run in this cycle without having one or more “Daddy Warbucks” behind me... period!

I would spend much more time in the I-29 corridor doing retail politics, I’d hire Bill Hillsman to put together my media campaign, and I‘d hire the David Winston Group, out of D.C., to assist me in polishing my messaging and platform.

[CAH note: Hillsman helped Paul Wellstone and Jesse Ventura campaign in Minnesota. He also put together this blunt ad with Vikings punter Chris Kluwe in opposition to the gay-marriage ban Minnesotans defeated last year. He's been working mostly for Dems, so Stace Nelson might have a tough time hiring him.]

I’d do much more hard sell, yet fair, politics; soft sell and/or the thoughtful approach don’t really work for the masses of voters who don’t know you and won’t take the time to study the issues.

Many voters are, in my opinion, “fatally ignorant” of the reality that’s manipulating them; an unknown candidate must find a way to blast through that ignorance and indifference in a catchy, simple way that’s memorable.

I failed to do that in 2008, primarily due to the lack of cash to fund a proper media blitz.

Heidelberger: What can Mike Rounds learn from the 2008 primary to protect his GOP frontrunner status?

Kephart: Mike Rounds in 2013-2014 is a much more engaging personality and is more naturally charismatic than Joel Dykstra was back in 2007-2008.

If I’m Mike Rounds, I’d be doing everything I could, action-wise, not in words, to keep affirming and EARNING the public perception of my inevitability as the “chosen candidate” and presumptive winner in the minds of the voters.

However, there’s also a palpable risk here; there seems to be a certain smugness or arrogance that the likely winner takes on as the primary season matures. Joel Dykstra certainly exhibited that attitude that on some occasions.

I hope Rounds is both seemly and savvy enough NOT to fall into that trap. It really quietly pisses-off the folks who notice it and it could disaffect his supporters, because they expect some degree of respect and fair play for the competitors in the field during the campaign.

Heidelberger: What can challengers learn from the 2008 primary to help them upset Rounds?

Kephart: If I were running against Mike this year, I would directly, clearly, and repeatedly challenge his statement, which was the “teaser” headline of a recent fundraising letter I received, that he wants folks to “help me change Washington”.

I like Mike personally and I seriously respect how he’s successfully fought his way up the political ladder, but that phrase, “help me change Washington”, is the biggest, most inauthentic promise he’s ever put his name behind.

Mike, whether you love him or hate him is an accomplished and “certified” MASTER of inside political dealing.

No, I’m absolutely NOT accusing Mike Rounds of doing anything illegal. [CAH: That emphasis is in Kephart's original response.]

However, Mike has completely figured out, and has refined to a high art, how government can and does work with big business, how to capitalize on that nexus, and how to monetize the resulting symbiotic relationships.

Part of me deeply admires Mike’s street-smart abilities here, but morally I find it repugnant; it goes against my sense of fair play for Main Street and the “little guy.” But then again, what’s “fair” in politics? It’s a blood sport and, demonstrably, I was too damn naive, high-minded, and well-intended to figure that out ahead of time :(

Mike Rounds has many clear strengths and some substantial administrative experience, but any attempt on his part to position himself as an “outsider” championing the “little guy” or Main Street against Washington and the Feds is just plain bull---- and laughable.

Mike’s messaging folks need to go back to the drawing board and come up with something more believable. That particular headline and tagline is pure, unadulterated fantasy and denial of what’s so on their part.

Mike Rounds has some well-established, significant, relatively easy-to-prove vulnerabilities from his operating as an “insider” during his 8 years as Governor.

Those vulnerabilities could be made into a big, sticky negative by the right creative team, given the current American zeitgeist and emerging awareness of the corporate kleptocracy that has it’s boot on our collective necks. However, those Rounds vulnerabilities would need to be exploited surgically, competently, cleverly, and repeatedly by his opponents; I doubt they will be. There just isn’t the deep political savvy here to pull it off.

After he got elected, it took 3 or 4 years before John Thune got seduced by the power structure in D.C., became a protege of Senator John McCain, and got ‘hard-wired’ into the Beltway’s Machiavellian deals.

Mike, Rounds, if elected, will be going to D.C. already “LFB”... looking for business.


...But if you know your Twitter, maybe half that.

In our ongoing interview on his 2008 GOP Senate primary experience, Sam Kephart has weighed in on Republican insularity, insider advantages, and fundraising. Today he tells Nelson, Rhoden, and Venner that they'll need a million to a million and a half to wage a serious challenge against nine-million-dollar man Rounds... though Kephart offers a discount for those who know how to Tweet.

Heidelberger: Money isn't everything, but it matters. How much does a candidate need to mount a serious statewide race? How much money would it have taken for you to beat Dykstra?

Kephart: I ended up raising about $60,000, which was a pittance. However, I managed to get roughly 25% of the statewide vote for that. Joel spent just shy of $400K in the primary, so clearly I was the more effective candidate on a dollar-spent-per-vote-gotten basis.

If Joel and I had had equal amounts of money to spend, I think the race would have been much closer, but I believe he still would have beaten me because of his prior history with the party and the margin or edge his insider status in Pierre gave him.

If I had had say $1 to $1.2 million to spend in the primary, I believe I could have won it. I had some pretty big media plans with a seasoned and successful “guru” to run them.

My wife, Sammie, and I had dinner in early August of 2007 with Bill Hillsman from Minneapolis. Bill had run the wildly successful, out-of-the-box campaigns for both US Senator Paul Wellstone and for Governor Jesse Ventura. [See this link for his insightful book on campaigns for mavericks, Run the Other Way.]

Although I was way more conservative than either of those two Minnesota progressives, Bill liked my direct approach and outspokenness and thought an effective media campaign could be launched that would take my name recognition way past Joel in fairly short order... and have some fun in the process. Further, I have personally produced and hosted hundreds of TV projects over the last 30 years; I think I would have had a huge advantage over Joel in any air campaign, had I been able to foot the bill. Cory, you can just imagine the spots ;)

Sadly and very realistically, guys like Hillsman need six-figure down payments and I couldn’t pull my socks up, because I didn’t have any... at least money wise.

Today, I think someone would need at least a million to one and a half million dollars in their campaign kitty to stage an effective statewide primary, particularly if they are an unknown and they need a media blitz; while effective at building name recognition, TV and radio spots are very expensive and there are ZERO discounts for political campaigns because of the regulations.

Having said that, I suppose it might be possible to do it for half that amount if someone was REALLY a whiz with social media such as Facebook, YouTube, and Twitter, which really weren’t a factor in 2007-2008.

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Hey hey! Now that the blog is working again, I can resume my series with Sam Kephart on the 2008 GOP Senate primary. In Parts 1 and 2, Kephart talked about where he found support despite the efforts of the GOP machine to squeeze him out as an uppity and unorthodox outsider. In Part 3, Kephart attests to the need to get big donors in the chute early. Primary candidates, pay attention!

Heidelberger: Dykstra outfundraised you in the primary. What kept you from tapping bigger donors and bigger donations?

Samuel Kephart, 2008 GOP U.S. Senate candidate

Samuel Kephart, 2008 GOP U.S. Senate candidate

Kephart: One of the biggest mistakes of my primary campaign was to underestimate the need for a “sugar-daddy” and to not have a ready stable of already-groomed large donors who could prime the pump with several hundred thousand dollars. Realistically, Joel Dykstra suffered somewhat from the same issue, although he certainly knew way more wealthy people in the state than I did.

I very naïvely thought that the power of my ideas, my direct approach, and my ‘fresh eyes’ would bring out the donors, once they heard my campaign pitch. Boy, was I wrong.

I tried to go from 0 to 60 in one jump; I had no prior campaign experience, I was new to the state, and I was scary to some people.

I did have a couple of total strangers give me the maximum donation of $2,600 based on a 30-minute talk, however, many prospective donors were defensive, at least initially.

More folks started warming up to me towards the last 6 weeks of the campaign, but it was too late then. I was completely unprepared and inexperienced, donation-wise, to ask for the “big give”... and I didn’t have the down payment necessary to hire the proper outside fund-raisers.

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