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.