Bob Mercer is trying to wrap his brain around the state and federal investigations of the EB-5 visa program overseen (perhaps not overseen enough) by the South Dakota Governor's Office of Economic Development. As background, Mercer directs us to required reading on the EB-5 program in South Dakota, a 2007 article by Emily Arthur-Richardt of the Aberdeen American News.
I've cited Arthur-Richardt's excellent story in my past coverage of the EB-5 program and the Veblen dairies debacle. I've also had her article on my desktop since Benda's shooting. As I read and re-read that seminal text, I keep coming back to this central quote about the motivation of EB-5 visa buyers from the man who ran Governor Marion Michael Rounds's second-term economic development efforts, Secretary of Tourism and State Development Richard Benda:
Richard Benda, secretary for the Department of Tourism and State Development, defended the program.
“I haven't found (getting a green card) has been the overwhelming factor of people investing here,” he said. “... These are very prudent investors. They are looking for a return regardless of whether they can obtain a green card. The overwhelming principle all of them look at is the return on the project. They've got to answer the question: Is there a possibility down the road that I get my money back? It's got to be an investment; it's not a loan” [Emily Arthur-Richardt, "Green Cards for Sale: $500,000," Aberdeen American News, 2007.10.07].
You don't need my blogging to tell you Richard Benda was putting mayo on the whopper. Let's hear from EB-5 program coordinator Joop Bollen... in that same 2007 article:
And then there are the allegations that foreign investors are basically just buying their green cards.
Bollen said he understands them, and he doesn't deny that's happening.
“These people will drop the money here, but they won't live here,” he said, meaning South Dakota. “It's their ticket over here. Most of them don't care where the money is going. The average wealth of these people is quite high. I'd say, on average, it's about $10 million. They have substantial wealth” [Arthur-Richardt, 2007.10.07].
Think about those statements in the context of the Northern Beef Packers plant, which Benda and Bollen were helping Dennis Hellwig start with EB-5 money when Arthur-Richardt wrote this article. Recall that there were local cattlemen who were interested in starting a beef plant in northeastern South Dakota. Instead of anchoring the project in that local interest and wealth, Secretary Benda and Governor Rounds steered Hellwig toward foreign EB-5 money, which almost exclusively funded the initial construction of the plant and which saved the project when local investors (strangely?) dried up.
Who benefits from basing NBP on EB-5 investment?
Well, perhaps the EB-5 coordinator, Joop Bollen. According to the 2009 contract that I'm reading between the Rounds-Benda Department of Tourism and State Development and Bollen's newly incorporated South Dakota Regional Center, Inc., the SDRC (which, as far as I can tell, has never consisted of anyone other than Bollen and sometime partners Maurice Berez and Pyush Patel) would receive a $45,000 fee.
And, perhaps, the Department of Tourism and State Development, now the Governor's Office of Economic Development. That 2009 contract says the SDRC will charge EB-5 project beneficiaries a fee of not less than 1% of the capital raised. That money was supposed to go into and "Expense Fund" and two "Indemnification Funds" under the control of DTSD/GOED.
Whatever the benefits and whoever the beneficiaries, Governor Mike Rounds's administration pushed an economic development program that preferred investors with more disposable cash and less interest in how that money would be spent than local South Dakota investors.
Reportedly, the politicos in the governor's office and the attorney general's office knew this was under investigation six months ago. That was on the heels of Bill Clay and the disgraceful scams in the Secretary of State's office, which got the whitewash treatment from the attorney general. Now the whitewash bucket is being applied by the attorney general on Mike Rounds, which is backfiring as it becomes clear Rounds was up to his eyeballs in the money game. How could he NOT know? Was the chief of staff asleep month after month? C'mon!
Keep in mind that Rounds, Dick Wadhams, Jackley, Daugaard's politicos and the Pierre power clic have had a six-month jump on knowing there was a federal investigation ... and certainly have known who did what back when the dirty deeds got done. By now, they've memorized their alibis and are working their voodoo on the press to downplay their routine practice of putting our government on the auction block.
I believe you Rick. But where are the democrat leaders of SD? It really seems the only one that has sparked an outcry is Cory Heidelberger (and has done a good job of it at that). Hunhoff has stayed low and out of the way. What's up with that? Business as usual? Since I don't live in SD, I'm not familiar on who the democrat legislators are, but this is an opportunity for them to expose the corruption and demand public legislative hearings on it. Stace hasn't even jumped in.
Jenny,I have a democratic? senator from my district 26,his name is lucas, I still think he is a republican in disguise but either way he is a DUD!!!!! rollin Potter
Interesting first paragraph Rick. Do you apply that same, he should have known criteria, to our President? Not pertinent I know, just curious as to how you apply should have known.
I just read Mercer's eggs without salt editorial in today's Journal and was struck more by what he didn't say than by what did say.
All he really did was give us a partial list of the players, no mention of Joop or EB-5 or other items brought up on Madville.
He did include Senator Johnson and his son Brendan, implying that the Senator was somehow influencing the federal investigation, if there is one.
Now, I know we have been doing a speculating here on this recent scandal, but it seems to me that a guy that with a weekly editorial column would provide more substance.
Rassmussen must really be sitting on the editorial boys!
Jenny, I can't say with any authority whether any legislators are loading shells. They may be waiting until the feds yell, "Pull!" and we can see what we're shooting at. It is possible that legislators have somehow been kept entirely in the dark. It is possible that the only legislators who know what's up may have their hands in the cookie jar and thus aren't the ones we can expect to speak up.
Again, I wonder: can the Legislature convene a special investigative hearing, like the 1987 Iran-Contra hearings? If they can, what could they do: vote to defund the GOED? If the malfeasance took place in the Rounds Administration, the Legislature doesn't have anyone to impeach. What can happen here?
Roger, it may be that Mercer, perhaps sitting on a mound of tips that he can't quite act on yet, is choosing to write just enough to interest the general audience. They don't know who Joop Bollen is. The Johnsons are a familiar, easy hook to hang the story on for readers and to whet their interest for the big, complicated stories to come.
And note that Rasmussen didn't call the final shot on that editorial. Mercer placed the same somewhat vague text in the other papers (Spearfish, Aberdeen, etc.) that carry his columns.
Maybe things have changed since I left around '06, but I wrote a weekly op-ed column for RCJ for nearly 20 years, many of them when Randy Rasmussen was my editor, and he never intervened when it came to subject matter, opinion or any other aspect of the way I wrote or handled a piece. I doubt that he'd do anything like that on something submitted by Bob Mercer.
Of course you kid now Mr. Tsitrian. Mr. Rasmussen is not in the business of equal and fair at the RCJ, those days seem to be long gone from not being able to read comments from columnists that provide weekly input to the Journal (you can read them here, but not there) if that is not censorship, then what is?
Jerry,
What the Journal does is not necessarily censorship, it is blatant partisanship. It is a rarity that they post any of my comments that remotely critical of Republicans or their issues. I finally got one by them today.
Thanks for the information Cory, but their ominous silence is questionable
You say potato and I say potato. I guess that when you take a weekly columnist that submits a column and you won't run it not because of politics, what is it then? If that is not censorship to deny comments because of political content, what is? Why have a comment section if you cannot comment freely as long as you do not put the foul language or lies, newspapers should welcome it.
Jerry,
Not long ago a Jim Kent editorial on Native American government and church boarding schools was not published because he compared them to Nazi death camps. The editing of his article caused a brief protest at the Journal by Native Americans.
Rassmussen was at the helm.
That is what I am speaking of Mr. Cornelius. To me that is not partisanship, that is censorship. Mr. Rasmussen has his opinions and that is not out of line for being an editor, but he is making those opinions most times, in my opinion, with no dissenting voices to show differences. My last direct response to Mr. Rasmussen was in late December of 2009 about his comments published in the RCJ. I told him that I thought that he was a hater and a complete racist with his remarks and then I had enough of that. It is clear that Mr. Rasmussen is not really very fond of folks of color and especially Native American's.
Jerry,
I will concede the point after thinking hard about it, the Journal does censor not only editorial comments, but comments on news articles. It happens to me frequently when I take on their tea baggers or challenge their journalistic or editorial content.
For a publication to call itself a "newspaper" when they practice both censorship and blatant partisanship is nothing more than a paper FOX "News" for western South Dakota.
The RC Journal printed a column that was utter nonsense about global warming and Obama wasting money on research to fix the broken sound barrier and as far as I have been able to tell never apologized for printing that hogwash.