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Rep. Gibson Questioned GOED in 2012 on Northern Beef Packers; Time for Reform

Last updated on 2013.11.22

Democratic women may be leading the charge in holding the Governor's Office of Economic Development accountable for the financial misconduct and whatever other corruption the feds may be investigating in the GOED/EB-5/Northern Beef Packers scandal. Rep. Kathy Tyler (D-4/Big Stone City) is ready to fight for a Legislative audit; Rep. Peggy Gibson (D-22/Huron) takes to the pages of the Huron Plainsman to explain how she's been trying to get some accountability for the state's questionable investment in now-bankrupt Northern Beef Packers for over a year.

Rep. Gibson devotes her Wednesday, November 13, 2013 column (print edition only!) to the questions she sent to the Governor's Office of Economic Development in April 2012.

Rep. Gibson asked GOED how much state money we had sunk into Northern Beef Packers. GOED gave her a list of loans, Future Fund grants, and other assistance totaling $12.6 million. Most of that money flowed during the Rounds Administration; some came from the Daugaard Administration. Those numbers square mostly with the numbers Scott Waltman reported in July 2013.

Rep. Gibson asked GOED why the state chose to favor Northern Beef Packers with all this money "when other beef plants have either failed or were unsuccessful in starting operations?" Rep. Gibson reports that GOED responded, "...the State commissioned a beef study that showed positive results for the location of this plant and available cattle. The study is available from GOED." Rep. Gibson says she requested a copy of that study but never received it.

Rep. Gibson asked GOED how many businesses that get state Future Fund or REDI Fund help are no longer doing business in South Dakota. GOED's response suggests that economic development in South Dakota operates like Sidewinder missiles: fire and forget!

"[O]nce a business has fulfilled its obligation to the State, either by repaying its loan or reaching the end date of its Future Fund agreement, GOED does not actively track each business. GOED does not have the resources to accomplish this on an ongoing basis. Furthermore, it is very difficult from a research standpoint to differentiate a company that is 'no longer doing business' from companies that change names, merge with other companies, change ownership, relocate, or restructure" [South Dakota Governor's Office of Economic Development, quoted in Rep. Peggy Gibson, "Notes from the House," Huron Plainsman, 2013.11.13, p.2].

Horsehockey! Did you guys in Pierre ever hear of a contact list? Surely you have phone numbers for the companies to whom you give money. Every year, say, on June 1, you call each of those businesses. If they answer, awesome, confirmed: they're still in business. If they don't, you call the local papers, hit the Googles, get Jason Gant to look up the corporate filings in the Secretary of State's corporate database, and in about five minutes, you'll find out if your grant and loan recipients have quit, moved, merged, gone bankrupt, whatever. South Dakota is one small town. If a business shuts down or moves out or just changes names, someone in town will be able to tell you what happened when.

GOED's 2012 response to Rep. Gibson epitomizes the lack of accountability in Pierre that insulates crony capitalism from public scrutiny. Let's hope Rep. Gibson and Rep. Tyler will lead the charge into a full Legislative investigation of how the Governor's Office of Economic Development has frittered away taxpayer dollars in favors to rich friends. And let's urge them to dedicate the 2014 Legislative session to exposing and eliminating corruption in South Dakota state government.


  1. Allen 2013.11.17

    Oh rep.Gibson. can I tell you a story

  2. Charlie Johnson 2013.11.17

    And we thought k-12 education was wasting money. For sure they(schools) answer their phones(M-F, 8 till 4). Economic development should not be about playing "Santa Claus" to favorite projects. Our best and only ED should be
    improving infrastructure at all levels and providing better funding for education.

  3. Rorschach 2013.11.17

    A full legislative investigation? You want the 2/3 Republican legislature to investigate the Republican administration? Total waste of time. I'm waiting to see what the federal investigation turns up.

  4. Rorschach 2013.11.17

    On a side note, Watertown is losing an o-ring manufacturer and 180+ jobs some of which are being outsourced to China. Apparently GOED did not see that as a call to action to drop millions of corporate welfare on that company. Maybe they already did & when the free money train dried up the company left anyway. There's something that should be looked into.

  5. Michael B. 2013.11.17

    That's a line of BS. The state tracks everything. We are left with two options.
    1. They are lying.
    2. They are grossly incompetent.

  6. grudznick 2013.11.17

    Mr. H, if the women Democrats want to put one of themselves in charge of some investigation they should pick that young Susan Wismer, not this Peggy Gibson. Ms. Wismer is the mover and shaker of the Democrats in the legislatures.

  7. Michael B. 2013.11.17

    Remember that our state government cut out money for alternative high schools for our troubled youth. Remember to ask Rounds about that at his next election campaign stop.

  8. Bree S. 2013.11.17

    From Grudz comment, we can determine that whoever Wismer is, she should not be put in charge of any investigation that might involve the Republican Establishment.

  9. Michael B. 2013.11.17

    What we need is industries that don't bring trouble and employ LOCAL people.

  10. grudznick 2013.11.17

    Mrs. S, young women everywhere would do well to emulate Ms. Wismer, exept for her liberal tendencies.

  11. Robin Page 2013.11.18

    Remember when Governor Daugaard's first budget took away millions of dollars from the education budget to enhance funding of his Office of Economic Development? Remember when he gave Manpower of Minnesota a multi million dollar contract to recruit "educated" people to move to South Dakota and fill the jobs "us uneducated hicks" don't know how to do? Remember how the Governor spent a week in the Mall of America, standing at a kiosk trying to convince Minnesotans to move to South Dakota? Remember the October, 2013 "biggest snow storm in South Dakota in the last 100 years" - and the Governor's refusal to call out the National Guard to help dig out Rapid City and help restore electricity to thousands stranded in their homes with no heat and some with no water? It is time for Governor Daugaard to pack his bags and prepare to move out of the Governor's residence. As proven by his actions, he does NOT care about the citizens of South Dakota.

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