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Playing Dumb, Rounds Says He Didn’t Read GOED-EB-5 Contract

In what is likely a long-planned response to the GOED/EB-5/Rounds/Benda scandal (anyone ready to come up with a -gate name for this story?), Marion Michael Rounds is now launching Operation Plausible Deniability. He tells David Montgomery that helping foreigners buy their green cards by investing in new South Dakota businesses was a great idea, but it was all now-deceased Richard Benda's idea.

“Richard did that very hard for an extended period of time, to promote an infusion of equity through the EB-5 program into a number of South Dakota programs,” he said.

Rounds said Benda and other tourism and state development officials told foreign investors it would be in their interest to have their EB-5 investments funneled through a private company [David Montgomery, "Questions Go Beyond Beef Plant," that Sioux Falls paper, 2013.11.02].

Rounds plays dumb and says he didn't even read the contract that shifted the EB-5 visa program to from the state's hands to one private corporation:

Rounds said he remembers the pitch focusing on the value of the pooled-loan model. He said he never read the contract.

“My understanding was that this was designed to comply with the federal guidelines for the EB-5 program,” Rounds said [Montgomery, 2013.11.02].

The federal government authorizes South Dakota to use a federal immigration program to draw millions of dollars for economic development. Someone decides to hand authority over that federal program to a private company not only not subject to public scrutiny but blatantly resistant to it. And the Governor of the state doesn't even look at the contract surrendering that state responsibility? He doesn't even ask why his man Benda signed a five-year contract (technically four and a half, signed December 22, 2009, amended June 4, 2010, good through June 30, 2014) with this agency?

Here, Mike, refresh your memory. Read the contract now, the contract your lieutenant finally saw fit to cancel (quietly) this September. Are you sure you don't remember looking at this important document?

As he runs hard from the EB-5 program that was important to his big-dairy, economic development agenda, M. Michael Rounds is looking more and more like Jason Gant. Even if he didn't really do anything criminal, not reading that important DTSD-SDRC contract looks like one more example of his executive incompetence.

But Rounds is still clever enough to shift all of the responsibility to a dead man.


  1. Jerry 2013.11.03

    Incredible! Does not even come close to passing the smell test for an insurance executive. Rounds business model is predicated on the fine print, no one could possibly believe that an owner of an insurance company that reaches the entire state, could not have read the deal he was promoting. Now, as our former governor, not knowing why he was smiling next to the dude from China, that is even more unbelievable. Insurance agents as well as governors, have to live by the fine print or else they get fined and reprimanded by the Division of Insurance and you can even go to the jail for not paying attention to the fine print in a contract.

  2. Roger Cornelius 2013.11.03

    Great qualifications for prospective senator, "I didn't even read it".
    What laws will he vote on the senate that he didn't read?
    Kind of risky having a non-reader in the Senate, wouldn't you think?

  3. joseph g thompson 2013.11.03

    Rounds might make a poor Senator but a great Speaker of the House of Representatives. Remember have to pass it to find out whats in it.?

  4. joseph g thompson 2013.11.03

    Nite Cory, its been fun and I have learned a little. Thanks

  5. AmyD 2013.11.03

    I literally read this with my jaw dropped.

  6. David Newquist 2013.11.04

    When the speculating began on the death of Richard Benda and some rushed in with the counsel that the man is dead, let him be that way, it became apparent that good South Dakotans were once again going to take refuge behind a façade of niceness and let some very unpleasant facts get buried. In most suspicious deaths, the cause and circumstances of death is determined within 24 hours, and certainly within 24. As Benda was the manager of the EB-5 loans his death is not just a family matter. Any death of suspicious circumstances is a matter of public record, but in this case it is connected to a scandal. If the statement of cause is delayed, the compliant minds will let it rest and forget about it in good time.

    The other factor lost sight is the matter of money. How much money was invested in the plant and how much was actually collected for that investment. The state contributed $30.76 million in loans and grants. How much ended up from the sale of TIF bonds? How much was raised by EB-5 investments, whether direct or through consolidated loan funds organized by the South Dakota Regional Center? And there seems to be investments by private sources.

    NBP says it spent $115 million on the project. Its bankruptcy filing says its assets are worth $79.3 million, while its liabilities are listed as $138.8 million.

    The handling of EB-5 shares would seem to be just part of the NBP affair. The figures which can shed some light on it are obviously compiled. Where are they? When government agencies, both state and federal, retreat into silence on the grounds that no comment can be made on an ongoing investigation, and information does come out which misdirects public attention, the cover up is on and the fix is in.

  7. David Newquist 2013.11.04

    should read "certainly within 48."

  8. rollin potter 2013.11.04

    Mr.Newquist, you just compressed what Mr. Heidelberger has been saying over the last few days!!!!! Do you feel better now?

  9. Rick 2013.11.04

    Does "Anderson Seed Company" and sloppy oversight by the GOP regime ring a bell here? If investors in South Dakota want a better deal, they should not trust state agencies and they should just put the money on the blackjack table at Flandreau.

  10. owen reitzel 2013.11.04

    We already have a congresswoman that won't read anything and now we want a Senator doing the same thing?

  11. hmr59 2013.11.04

    I shudder to think that, due to a lazy press and South Dakotans' good Christian "forgive and forget" ethos (especially with GOP pols), that MMR will somehow survive this and take home the prize in 2014. Meh.

    This whole deal reminds me a bit of Iran Contra back in 1986-87 when the GOP laid the blame on fmr CIA director William Casey, who had just died of cancer (I believe), while President Reagan claimed to be unaware of anything going on in his own building. Just wonder who will play the Ollie North role and fall on his sword for Marion??

  12. joe 2013.11.04

    You should try to contact the secretary of ag during Rounds first term, I dont remember his name but I was up in Pierre in 06 and we talked to the Sec of Ag avout this program

  13. Rorschach 2013.11.04

    As our senator, Mike Rounds will read every bill in its entirety before voting on it to the same extent that Rep. Kristi Noem and Sen. John Thune do.

    Actually I don't think it's possible for congress members to fully read and understand the entirety of thousand-page bills. They simply don't have enough time or expertise for that. That's what they have staff for who are experts in different areas of public policy - to explain the details to them. Those congress members and candidates who point fingers at others and jump around complaining about others not reading the whole of bills are completely full of hooey, as well as hypocritical. Nobody in congress reads all of each bill. And if Mike Rounds didn't have to personally sign this contract with the Joopster it doesn't surprise me that he didn't read it. But it would surprise me if it wasn't explained in detail to him.

  14. caheidelberger Post author | 2013.11.04

    Joe, are you thinking of Larry Gabriel?

  15. Jerry 2013.11.04

    I wonder if NOem read the fine print on this corruption while she was an elected official? How about Stace Nelson, or the other Rounds guy? As they were all involved in the Ag portions of the legislature, they certainly knew of what the program was all about, they cannot claim to be dumb as that would be grounds for incompetence in the view of taxpayers.

  16. interested party 2013.11.04

    i went to bed unable to shake it from my mind, cah.

  17. DB 2013.11.04

    "As they were all involved in the Ag portions of the legislature, they certainly knew of what the program was all about, they cannot claim to be dumb as that would be grounds for incompetence in the view of taxpayers."

    I can't help but laugh when reading this while I hear Pelosi's shrill voice in the background. I don't get what Democrats were thinking when they came up with EB-5. California is loving the program though.

  18. Jerry 2013.11.04

    Pelosi's shrill voice whispering in Rounds ear? While doing what? Wow dee bee, the time change has certainly taken its toll. Me, I see visions of the 9 million dancing in his big head. So maybe that is where this mysterious 9 million he blathers about for his campaign came from. Maybe Rick should ask him about it just to make sure of how far East it may have come from. Through Yaun window pane perhaps or maybe over yaunder??

  19. DB 2013.11.04

    Just pass it to see what's in it Jerry. You guys just keep coming up with scenarios. It makes you all look smart.

  20. Bree S. 2013.11.04

    Yeah, I have a feeling that fundraising is about to slow down for the Rounds campaign. No wonder he's been begging 24/7 at every doorstep for the last 6 months.

  21. Jerry 2013.11.04

    Speaking for myself, thanks for making me look smart dee bee. Again, trying with the Pelosi innuendo's. It amuses me to see the fear that you have for women. You know, if you treat the women folk with respect, they will act in kind. The ladies are not so dangerous when you know they are equal, so calm yourself down and get some sleep.

  22. caheidelberger Post author | 2013.11.04

    Wow. The GOED/EB-5/Rounds/Benda scandal is so not about Nancy Pelosi. Let's keep it at least semi-real here.

    Rounds is saying he didn't oversee a surrender of important federally granted authority to a secretive private company... more realistically, to one man. Why would the Governor allow that to happen without his knowledge?

  23. Rorschach 2013.11.04

    Bob Mercer has a good story about how much state money went to/for NPB and what the conditions of it all were. Hint: millions of $$ of grants to the Joopster.

  24. caheidelberger Post author | 2013.11.04

    How does Joop rate to get that kind of favor from the Rounds Administration, R? Are big dairies and meat plants (and that casino in Deadwood... that keeps nagging at me) generating revenue and taxes really all that GOED expected out of the deal?

  25. Roger Cornelius 2013.11.04

    So, if some other Senator or Congressman/woman doesn't or didn't read a bill, it now justification for a potential new Senator not to have it read?
    Oddly, I have never found Nancy Pelosi's voice to be shrill, there are times when I have to turn the sound up on the tv to hear her.
    Apparently if Pelosi is a supporter or creator of EB-5, she didn't allow for it be burglarized by South Dakota Republicans.

  26. Rick 2013.11.04

    Cory - Rounds had to have known. Certified Beef was and is one of his signature feats. More so, his Chief of Staff had to have known. My guess is Rounds' appointees in his office, the ag department and GOED knew what was going on and monitoring it very closely. Does the state's gag law, which Rounds spearheaded in the State Senate, preclude the feds from access to emails, phone records, bank records and other documents that would show who was in the loop?

  27. Bree S. 2013.11.04

    I think its time for Rounds to be audited. lol

  28. Jerry 2013.11.04

    The EB-5 program went into play in 1990, completely bi-partisan and generally thought of as a stimulus when that word was not a dirty word. Under President "read my lips" Bush, the plan went into law. It seems to me that if there were issues with it, EB-5 could have been removed during the period of 23 years and several congress changes.

  29. caheidelberger Post author | 2013.11.04

    No way, R! State law can't block a federal investigation, can it?

  30. DB 2013.11.04

    " It amuses me to see the fear that you have for women. You know, if you treat the women folk with respect, they will act in kind. The ladies are not so dangerous when you know they are equal, so calm yourself down and get some sleep."

    I'm just using your and Corey's standards of executive incompetence to show how stupid the leaders of the democrat party are for supporting bills they haven't even read. You could have just screamed "racist" and that would have made just as much sense as trying to act like i am sexist.

    "Rounds is saying he didn't oversee a surrender of important federally granted authority to a secretive private company... more realistically, to one man. Why would the Governor allow that to happen without his knowledge?"

    Maybe I am missing something, but where does it say he was unaware? You are projecting to get to the conclusion that you want.

    "Under President "read my lips" Bush, the plan went into law."

    Created by Democrats. I guess they should have been more partisan back then and smacked down the murderer Ted Kennedy's stupid ideas.

    "So, if some other Senator or Congressman/woman doesn't or didn't read a bill, it now justification for a potential new Senator not to have it read?"

    IF you can blindly follow your current leaders who are doing it, how can you expect any different out of any future or past leaders? It's not logical by any means, but that doesn't seem to stop Democrats for being so hypocritical about it.

  31. Dave 2013.11.04

    DB: If you're going to wear out the Pelosi quote, at least provide some background (unlike Fox has) to put it in proper context. Pelosi said “But we have to pass the [health care] bill so that you can find out what’s in it....” in her March 2010 speech because, at that time, there was no Senate version of the bill. Her contention was that until the Senate produced an actual piece of legislation that could be matched up and debated against what was passed by the House, no one truly knew what would be voted on. Her statement continues to be terribly miscontrued -- her words have nothing to do with passing legislation without knowing what it entails. It is pretty ridiculous to think that the Speaker of the House wouldn't know what is included in the House version of the health care bill when she was in the trenches working with both parties and the White House to help craft the bill. Of course, Kristi ran the quote, out of context, ad nauseum, to bamboozle the public and win election, and you, DB, are just as dishonest and mistaken when you keep repeating the lie.

  32. Roger Cornelius 2013.11.04

    Thanks for the explanation on the Pelosi statement, I never knew that, what I did know is somehow that comment didn't sound right coming from someone with such integrity.

    DB, you may follow your leaders blindly, I don't.

  33. DB 2013.11.04

    "DB, you may follow your leaders blindly, I don't."

    Yet, you blindly follow the lynch mob who have no concrete evidence or even know what criminal activities may have taken place.

    Dave, Welcome to US politics......where an out of context "Mission Accomplished" sign can be used as political criticism just like an out of context comment about legislation. One sided narrow mindedness is the norm around here. There is no subjective approach to topics on this blog, simply what looks best for democrats, and what looks worst for Republicans. It's why bloggers are not journalists.

  34. caheidelberger Post author | 2013.11.04

    DB, I understand that you are scared. I understand that a politician whom you respect and defend faces the threat of scandal, and that's upsetting to your young worldview. I understand that you need to believe that your guys can't have done wrong, and that you thus need to protect yourself by throwing up this smokescreen. I thus understand why you are talking about national-level politicians who have nothing to do with the issue at hand: you don't want to face the issue at hand.

    As for the "lynch mob" (that's hilarious), remember that the leader of the lynch mob may be Dennis Daugaard. He's the one who announced this story. He's the one who canceled the contract Mike Rounds claims not to have read. He's the one demanding that Joop Bollen surrender documents and money to the state.

    Now, DB, please clarify for us: are you trying argue that the 1992 Congress and President George H.W. Bush enacted a bad law? We can certainly discuss the merits of the law. But the GOED, SDRC, and NBP aren't being interrogated about the merits of the law. They're being investigated to see if anyone broke that law.

  35. Roger Cornelius 2013.11.04

    Wow! DB sure seems to be informed about lynch mobs, I wonder where he learned it?

  36. Anne 2013.11.04

    Although I no longer work in South Dakota, I come to Aberdeen once a month in the process of transferring my former duties to other people. This case captures my attention because I heard so much about NBP and the constant financial and govenmental turmoil surrounding it. The big issue here is how much devastation the project will bring down on Aberdeen. In today's paper, there was an indication. Some landlords asked for a meeting with the head of the city housing authority. They claimed they were experiencing very high vacancy rates because the public housing was luring away their renters. The authority head did mention the large number of apartment units constructed in recent years, and the comment section had many comments, largely from students, about what the moderately-priced market was really like. But what lingers is that early in the NBP plans, concern was expressed over the lack of housing for an influx of workers. More than 400 workers were employed at NBP with about 1,500 projected. If the new construction was built to accommodate them, one must wonder what will be the magnitude of impact on the real estate market alone. As I drove around Aberdeen over the weekend, I noted an unusual number of houses for sale.

    The failure of NBP and the far-reaching investigations have very deep implications. And when the final result is felt, it won't be a matter of speculation.

  37. Rick 2013.11.04

    Cory - Naw, I knew that the state gag law is irrelevant in a federal investigation. Rhetorical question. Except it serves as one of many examples of how thorough the "culture of corruption" has become after 36 years of one-party, total control. The more sophisticated manipulators disappeared with Bill Janklow. The Rounds years were rife with jobs and fat cat contracts for family and pals, secret donors and favors, and an "in your face" comfort that the press would do little or nothing to do their job as the fifth estate.

    This scandal, one of many, follows a pattern of pathalogical disregard for ethics and law. The Pierre power clic of Rounds/Daugaard continues to Daugaard/???. The passage of Mike Rounds' gag law opened a Pandora's box and set the bar ridiculously low for decency in governance, and Rounds and the GOP Capitol Gang have conducted themselves accordingly ever since.

    There's a long, ugly story to be dragged out of the Rounds years in the Senate and governorship. I was surprised he thought a national press corp would soft-soap or ignore the record and give him the same pass he got from instate media. Twelve months are going to feel like 12 years.

  38. John 2013.11.04

    Who were the legislative committee chairs who were apparently derelict in their duties of oversight of the GOED, its public funds, and monitoring what apparently became this fiasco? We deserve the names so those folks never again have a position of public trust. Likely this roster of infamy will span more than one legislature.

  39. caheidelberger Post author | 2013.11.05

    Anne, thanks for that on-the-ground perspective. During that building period, didn't Joop Bollen own/acquire a lot of rental properties? And didn't he liquidate his holdings in 2011? Good timing.

  40. caheidelberger Post author | 2013.11.05

    Rick, our local reporters—the Aberdeen team in particular, as well as Montgomery and Mercer—appear to be getting on the case. Still, I'd love to see what happens with the story when national reporters decide it's worth covering. What would have to happen for ABC, NYT, etc. to send a reporter?

  41. caheidelberger Post author | 2013.11.05

    John, funny you should mention Legislative oversight. The Legislature's Government Operations and Audit interim committee reviewed the South Dakota International Business Institute's activities on behalf of the state in 2008. Evidently they found no problems.

    Chairman of that interim GOAC was Senator Jason Gant. Vice-chair: Rep. Deb Peters. GOAC 2008 included Democrats Scott Heidepriem, Dan Sutton, Garry Moore, and Maggie Gillespie.

    Joop Bollen incorporated SDRC Inc. on January 3, 2008.

    The GOED contracted with SDRC for all EB-5 work on December 22, 2009, arguably removing the EB-5 program from the Legislature's direct oversight.

  42. Jenny 2013.11.05

    Cory, I'll e-mail this story to MN public radio. This is a worthy story and a lot is at stake here with the Senate race.

  43. Jenny 2013.11.05

    I'll notify the Star Tribune also. They had an article about the NBP closure back in July, I know.

  44. Jenny 2013.11.05

    Lets really make the Rounds team and SDWC nervous!

Comments are closed.