Last updated on 2013.11.12
Here's another reason Marion Michael Rounds may have thought EB-5 visa investment was a good program for South Dakota: his lawyer friends stand to make some extra money.
The companies that have sprung up nationwide to administer EB-5 visa programs, like the now federally-investigated SDRC Inc. that then-Governor Rounds and current Governor Dennis Daugaard allowed to handle South Dakota's EB-5 recruitment and investment without oversight for three years, have their own industry lobbying group, the Association to Invest in the USA or IIUSA. This group (which is avoiding mention of the South Dakota EB-5 scandal as assiduously as local Republicans) posted data in September showing that in 2010 and 2011, foreign investors buying their green cards through EB-5 programs plunked $1.75 billion into the U.S. economy. Those EB-5 visa buyers spent $66 million on legal fees.
According to United States Customs and Immigration Service data, those two years saw 5,760 EB-5 applicants. That works out to each EB-5 investor shelling out about $11,500 for lawyers.
If that average held for the 160 Asian investors who saw their money go poof in Northern Beef Packers, the lawyers shepherding those investments into oblivion in Mike Rounds's favorite EB-5 project did an extra $1.84 million in business.
That's nice work if you can get it... and it's easier to get when your governor embraces foreign investment over local financing.
"That's nice work if you can get it... and it's easier to get when your governor embraces foreign investment over local financing."
And foreign investment in foreign jobs as in the case of the Dairy CAFOs, when the same amount spent on local startups could have provided at least 100 young dairy farming families a means to get started.
Has anyone looked into Northern Beef LP? A Limited Partnership is a way to protect assets. In a LP there are two kinds of Partners...Limited Partners (who only have a limited liability...they can only lose the $ they have in the business) AND they have a General Partner....who is the fall guy who takes the brunt of any bad investment.
So how do they further protect this business? Northern Beef 's General Partner is not a person....its another entity....Northern Beef Management LLC. Nice job of entity structuring by Lawyer Kenneth Gosch his partners. It is also interesting how legislators bring entity structuring legislation to Pierre....has anyone checked into this?
Joop Bollen and the Aberdeen lawyers are very good at creating lots of corporations, presumably for exactly that sort of insulation from legal accountability. A similar structure appears to exist around the turkey plant in Huron, where we have Dakota Turkey Growers LLC, which does business as Dakota Provisions in Huron but on its Sep. 2013 report to the SDSOS lists its executive office as Jeff Sveen's office in Aberdeen), and Dakota Gobblers, which is incorporated by the same Hutterite players. Lora, you may want to line up some legal and financial experts to study these corporations and help you formulate some issue briefs for your campaign.
Entity Structuring is a legitimate way to protect your assets from suit-happy lawyers...but as with anything...once you get PRIVATE business cozy in bed with GOVERNMENT (who can change any law to fit their "business" dealings)...the people get ripped off.
Government (including Friends and Relatives of Government) should not be on the playing field, carrying the ball for one team and not another. Government should be the impartial referee!
I've taken the mega thousand dollar courses in Minneapolis, Chicago and elsewhere on how to structure your business...I know what they are doing. But it looks like they are playing loose with the rules...imagine that. I'm hoping the Feds will figure it out if they have pierced their corporate veil or not.
But that is a different message than what I want to portray...
My message is that City, State or Fed government should paly a limited role in business...not an active one. I also question if Northern Beef were truly a private business, where someone spent their life savings and sleepless nights making sure it would work...(which NB is not, it's a team of government and private players), would a caring private owner have allowed the animal cruelty to escalate before the USDA stepped in? (October 19, 2012...about a year ago)