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State Loses $550K to GOED-SDRC Scam… and Shrugs?

Last updated on 2013.11.24

This weekend's required reading is Bob Mercer's reporting on the results of Attorney General Marty Jackley's investigations of Richard Benda's suspicious death (officially declared suicide) financial misconduct in the Governor's Office of Economic Development, Northern Beef Packers, and SDRC, the company that ran our EB-5 visa investment program.

Update 15:29 CST: Add to your required reading list Bob Mercer's morning-after rundown of key facts we know and key questions still to be answered. Read it. Read it again. Memorize it.

Richard Benda's alleged double-billing of three airplane tickets for $5,559.80 looks like small potatoes compared to diversion of $550,000 from a million-dollar grant, approved by outgoing Governor Marion Michael Rounds, from doomed Northern Beef Packers to SDRC for "loan monitoring fees."

SDRC is run by arrogantly secretive Rounds pal Joop Bollen. Richard Benda followed that million-dollar grant straight from the Rounds Administration to a "job" at SDRC. But AG Jackley studiously avoids naming any names in the diversion of that half-million-plus.

Even more shockingly, AG Jackley says the state isn't going to hold anyone accountable for that diversion:

Jackley, who was appointed as attorney general by Rounds in 2009, said his investigation is now closed.

That indicates there won’t be an attempt by state authorities to recover the $550,000 from the bankrupt Northern Beef and its officers, or SDRC and its president, Joop Bollen, or the Hanul law firm and James Park.

“Because the EB-5 program is a federal immigration program run and controlled by federal immigration authorities, the United States Attorney and the Department of Justice have primary (jurisdiction) over federal immigration law and the EB-5 program,” Jackley wrote [Bob Mercer, "$550K in Beef Plant Funds Diverted to SDRC," Aberdeen American News, 2013.11.23].

Hold the phone, Marty. Two of the EB-5 loan funds (can we call them banks?) that Richard Benda ran for Joop Bollen through SDRC are now suing to ensure that whatever money Northern Beef Packers can raise in its bankruptcy auction goes back into their pockets. SDRC is striving mightily to recover over $60 million for foreign investors. Are you saying, Marty (and Dennis, and everyone else in Pierre) that you're more interested in letting accused scam artists get their hands on money that they say they'll return to Chinese and Korean investors than you are in retrieving misappropriated tax dollars for the people of South Dakota?

There are only a handful of explanations for such priorities, none of which sound good:

  1. The Daugaard Administration doesn't think $550,000 in improperly used taxpayer dollars is worth sweating.
  2. The Daugaard Administration doesn't want to hold accountable the people responsible for taking that money.
  3. The Daugaard Administration is more interested in keeping certain rich and powerful foreigners happy and quiet than it is in prosecuting lawbreakers.

The state's six-month investigation of financial misconduct in Governor Rounds's Office of Economic Development is not producing satisfactory answers. South Dakotans can only hope the federal grand jury that got the ball rolling with a subpoena in March can restore the public trust, if not the public checkbook.


  1. interested party 2013.11.23

    A federal grand jury convening just before the GOP primary sounds like a great idea. Go, Brendan.

  2. joseph g thompson 2013.11.23

    If the Feds decide that their was no wrong doing, can you accept that?

  3. Cranky Old Dude 2013.11.23

    Shhh...not so loud. There's an election coming. Don't startle it!

  4. Rorschach 2013.11.23

    Here's what we know about the "diverted" $550,000. It was state money - not federal money. It was a future fund grant Rounds gave to NBP on December 8, 2010. The stated purpose was:

    "to issue payment on a reimbursement basis for construction or equipment costs, not to exceed $1,000,000.

    NBP's stated commitment was:

    "to provide documentation of expenditures for equipment or construction costs incurred during the construction of their facility in Aberdeen, South Dakota."

    As Cory posted, the agreement was signed by NBP CEO David Palmer and M. Michael Rounds.

    What this means is that the money wasn't paid in December. NBP had to submit documentation of costs to obtain reimbursement from the state. If the money was diverted to SDRC for loan monitoring fees as Bob Mercer reported, then that means either that somebody at NBP submitted false documentation of construction or equipment costs, or somebody working for the state released the money to NBP either absent documentation or for purpose not authorized under the grant. And somebody at NBP improperly diverted the state construction money to SDRC. Mr. Benda didn't work for NBP, so who at NBP is guilty? And is someone working for the state also guilty or negligent? This is state money given through a state grant, not federal money. So it doesn't make any sense at all for Jackley to send anyone to the feds for answers. Is this what a cover-up looks like?

  5. Charlie Johnson 2013.11.23

    Time for a new attorney general!

  6. Robert J. Cordts 2013.11.23

    Where is Thomas Nast when you need him?

  7. Jerry 2013.11.23

    Exactly old guy on why this so called attorney general must go. He is clearly involved in this up to his eyeballs and should recuse himself and set this up for a special prosecutor at the federal level. The alterations of signed documents of that order are telling. Does Rounds lead us to believe that Benda altered those? Marty needs to stand down and let the Feds handle this RICO case. Those guys have the resources to get to the bottom of this and stop the Barney Fife routine that Marty is dancing now.

  8. Rorschach 2013.11.23

    I listened to the Rounds interview that WR Old Guy linked. Rounds comes off as very shifty.

    Rounds claims at 3:25 of the audio that the agreement he signed giving NBP $1,000,000 was altered by someone by changing a date and requiring that the money be spent sooner than what the original agreement called for. Even if that were true, it's not material, because he's not claiming that the purpose (construction & equip expenses) of the agreement was altered.

    Rounds claims at 2:30 of the audio that Richard Benda delivered the check in late January 2011 to NBP and asked that NBP pay $550,000 of it to SDRC. Rounds claims at 6:35 of the audio that the actual check was issued after Rounds left office and after Benda left state employment. Is he talking about the state's check both times, or the state's check in the first instance and NBP's check in the second instance? Either way, Rounds - like Jackley and Daugaard - is careful to avoid any reference to the identity of the person at NBP wrote made the impermissible payment to SDRC, and careful to avoid implicating NBP for any wrongdoing - though it was NBP that diverted the money. Who are they protecting? And why? Basically somebody at NBP took money earmarked for construction or equipment and put it toward another purpose.

    Rounds was asked at 5:25 of the audio whether completion of the plant was of paramount importance at the time the construction/equipment money was diverted. He stutters a bit coming up with a way to avoid that question - then he talks about his concern that NBP pay its local property tax bill - although that wasn't the purpose of the money in question either.

    Rounds also failed to say who the outside party is that was apparently reimbursing Richard Benda for his travel expenses that the state was also reimbursing.


  9. Bree S. 2013.11.23

    Nobody recuses themselves in this state. They could care less if it makes Republicans look bad.

  10. Jerry 2013.11.23

    I noticed that too R, exactly as you would expect from a salesman when asked about potential flaws in the product being peddled. As Bree S states, nobody recuses themselves in this state so they must be pushed aside so we can get to the bottom of this whole sordid affair. With that amount of money and hits high stakes links to the power base of this state, there is certainly motive for doing the unthinkable.

  11. Roger Cornelius 2013.11.23

    For the old timers here on madville, do you recall when Agnew was indicted and later resigned?

    Nixon proudly proclaimed the end of the Watergate investigation when in fact Agnew's resignation had nothing to do with Watergate.

    What did happen following the Agnew investigation was a concerted effort by the media and federal investigators to remove Nixon from office.

    Could history be repeating itself with Jackley, Rounds, PP and others saying the EB-5/GOED investigations stops with Benda?

  12. caheidelberger Post author | 2013.11.23

    R, good analysis of that Rounds interview!

    Joseph, if the feds issue no indictments, so be it. Independent of questions of legality are questions of policy and character:

    (1) Is EB-5 good policy?
    (2) Did Mike Rounds exercise good judgment in promoting EB-5?
    (3) Did Mike Rounds exercise good judgment in promoting Northern Beef Packers?
    (4) Did Mike Rounds exercise good judgment in pouring $2.36 million in state grants into NBP at the end of his governorship?
    (5) Did Mike Rounds exercise good judgment in giving Richard Benda and Joop Bollen so much power?

  13. Rorschach 2013.11.23

    "Attorney General Jackley. Who at NBP diverted the state's construction/equipment reimbursement money to SDRC?"

    "Governor Daugaard. Who at NBP diverted the state's construction/equipment reimbursement money to SDRC?"

    "Former Governor Rounds. Who at NBP diverted the state's construction/equipment reimbursement money to SDRC?"

    Somebody at NBP misused the state's limited-purpose grant money. The misuse of a state grant is a state issue - not a federal issue. The governor, former governor, and attorney general are dodging this question and covering for the culprit(s). The press needs to focus like a laser on this issue.

  14. caheidelberger Post author | 2013.11.23

    R, on payment timeline, check out the approval letter for Grant #1434. Rounds signed it December 8, 2010. The copy I have shows Richard Benda's initials next to a change, striking out the ending date of the proposal time frame of December 31, 2011, and changing it to March 31, 2011.

    But more importantly, look at the bottom. There's a handwritten annotation reading "OK to Pay $1,000,000 — DK 1-6-11."

    Mike Rounds handed the governor's office to Dennis Daugaard on January 8, 2011.

    Does that tell us anything? Does that challenge anything Rounds said in his KELO interview?

  15. Rorschach 2013.11.23

    If Richard Benda changed the ending date, that is immaterial. Completely immaterial. The agreement stated the money was for reimbursement of construction and equipment expenses only. So:

    1) somebody at NBP diverted the state's construction/equipment money to SDRC. Who did it?

    2) Did somebody at NBP submit false expense payment documentation to obtain payment of the $1 million? Or did somebody at the state ignore the requirements of the grant and issue the payment without proper documentation? The identity of "DK" may shed some light on this question.

    How did NBP get the money? Who at NBP wrongly turned the money over to SDRC? And why are the governor, former governor, and attorney general covering up this wrongdoing and trying to change the subject?

  16. Anne Beal 2013.11.23

    “Because the EB-5 program is a federal immigration program run and controlled by federal immigration authorities, the United States Attorney and the Department of Justice have primary (jurisdiction) over federal immigration law and the EB-5 program,”

    If I understand this correctly, that means Brendan Johnson is supposed to be investigating it. And you lunatics here in Madville don't think he's up to the job??? Is that what you're saying? You're mad because Jackley is passing it off to Johnson? Are you saying Johnson won't do as thorough a job of investigating the matter as Jackley would, so you want Jackley to continue?
    Or you don't want Johnson to investigate?

  17. Rorschach 2013.11.23

    Can't you read, Anne Beal? The issue being covered up by the governor, former governor and attorney general is the misuse of state money by NBP. This has nothing to do with the EB-5 program. Who at NBP diverted the state's construction/equipment money to SDRC?

  18. Bree S. 2013.11.23

    Now we need a copy of his handwriting. lol.

  19. Rorschach 2013.11.23

    So now we know who authorized the payment from the state to NBP. Which brings us back to the main question.

    Who at NBP diverted the state's construction/equipment reimbursement money to SDRC?

  20. Jana 2013.11.23

    Thank you Mr. Mercer.

  21. Bree S. 2013.11.23

    I want to know who traveled to China in Nov of 2009 and handed out the fraudulent Offering Memo to the Chinese investors who started a lawsuit against Joop in 2011. Since they're suing Joop.. I'm assuming he's one. But there's two because of the double billed travel voucher. Benda? Park? Rounds? I think its safe to say that Joop Bollen is under federal investigation, due to coinciding dates for travel voucher and Offering Memo in lawsuit. So, since Joop is most likely under investigation, he's be a likely person to have diverted the money if it wasn't Benda.

  22. Bree S. 2013.11.23

    Since the lawsuit says the investors didn't speak English, Joop & Park would be likely.

  23. Rorschach 2013.11.23

    Neither Joop Bollen nor Richard Benda worked for NBP, Bree S. They worked for SDRC. The state money did not go directly to SDRC. It went to NBP. Somebody at NBP diverted the state's construction/equipment money to SDRC. Who did it? Why are the governor, former governor, and AG covering for that person(s) and trying to change the subject?

  24. Rick 2013.11.23

    Republicans manage money like drunks ... as long as it's someone else's money. This is government run by Mike Rounds. These are his highest trusted, closest advisors and pals. Too bad there were no whistle blowers, thanks to the state gag law Rounds led through the State Senate.

  25. Bree S. 2013.11.23

    Well we got two likelies Rorschach then:

    Oshik Song, General Partner
    David Palmer, CEO

    I imagine the AG is covering because somebody just "committed suicide." lol. We wouldn't anymore suicides.

  26. Bree S. 2013.11.23

    And since it's $550,000 - about the same amount as a person would put invest for citizenship, my money's on Oshik Song. I'm guessing they don't want to mess with him.

  27. Deb Geelsdottir 2013.11.23

    Keep it up, you investigating folks! You're all my heroes! (Except Ann Beal.)

  28. Rorschach 2013.11.23

    Somebody at NBP misappropriated $550,000 of the state's money. Should we have to guess who did it? They have announced where it ended up, but not how it got there or who wrote the check. People get arrested and convicted every day in SD for misappropriating a lot less than $550,000.

  29. Roger Cornelius 2013.11.23

    Ann Beal,

    There have been numerous references through out this story about Brendan Johnson investigating and I think most believe he is. We're anxious to hear any results or his calling for a grand jury investigation.

    Rorschbach, good job of keeping this on point.

  30. Bree S. 2013.11.23

    The world is full of greedy fools who will one day steal from the wrong people.

  31. caheidelberger Post author | 2013.11.23

    Sure, Anne, Brendan Johnson could manufacture all those papers Rounds and Benda signed. Brendan Johnson could make all those millions of dollars disappear. Brendan Johnson gave Joop Bollen and SDRC unsupervised authority over EB-5 dollars.

    Do you realize how absurd that sounds?

  32. Bree S. 2013.11.23

    Gee, we got a RICO investigation, federal grand jury involving money laundering, fraud, human trafficking, "suicide," and obvious evidence that Jackley deliberately ignored the fact that the Feds are clearly investigating Rounds with that 2010 travel voucher... and PP has a clip of Nelson saying he wouldn't support Rounds in the general and a circus of outraged trolls. Shocking.. ly boring tabloid trash.

  33. Bree S. 2013.11.23

    She's not even a real person. She's another Julie Gross with a different "personality."

  34. Lynn G. 2013.11.23

    Anne Beal whomever that is always seems to drop a grenade of insults and crazy accusations and then disappear on many of the forums ironically very similar to Julie Gross(NE) Both are mostly ignored.

    Sorry back on topic? lol

  35. Bree S. 2013.11.23

    It's the crazy part that gives "her" away.

  36. interested party 2013.11.23

    pot: meet crack.

  37. Bree S. 2013.11.23

    Yeah, and Rand Paul is a fascist right Larry? lol.

  38. Roger Cornelius 2013.11.23

    Anne Beal, is that another of Bosworth's cutouts?

  39. Bree S. 2013.11.23

    Bosworth and "Beal" are birds of a feather. Both crazy. But not the same person.

  40. grudznick 2013.11.23

    It gets a little creepy when most of you people are insaner than me and Sibby.

  41. Troy 2013.11.23


    There are three reason your post is nonsense.

    1). NBP is bankrupt. Spending money to get nothing is "pouring good money after bad."

    2). The $1 million grant was a REIMBURSEMENT. They had already spent their own money for the equipment. They were not going to put the money in the bank. They were going to use it for other legitimate business purposes.

    3). Prepaid expenses is common in business. Ever made a rent deposit? Same analogy.

  42. Steve Sanchez 2013.11.23

    "However, $550,000 of said one million dollars was redirected from its intended purpose and purportedly used to pre-pay for EB-5 loan monitoring fees for the South Dakota Regional Center, Inc." - Marty Jackley's Thursday, Nov 21, letter to Gov. Daugaard

    *purportedly* - The AG's intentional use of this very interesting and little-used word should raise BS flags everywhere.

    The reveal: "I can't disclose further where it went," Jackley said Friday.

  43. Bree S. 2013.11.23

    Why don't you go back to the Dakota Ministry of Truth to continue your nonsensical ranting.

  44. Bree S. 2013.11.23

    Previous comment was to Grudz and Troy, not Steve.

  45. Bree S. 2013.11.23

    Good catch, Steve!

  46. Bree S. 2013.11.23

    Wasn't the fee on top of the $500,000 supposed to be 5-10%? In which case the $550,000 going to pay one of the eb-5 investors back before the bankruptcy makes sense.

  47. Rorschach 2013.11.24

    Steve & Bree, I think you're getting somewhere with your investigation. Somebody at NBP diverted the money to SDRC, and it could very well have been an investor in the know who wanted out before bankruptcy.

    Pay no attention to Troy. If the $550,000 of state money was truly just reimbursement for legitimate construction and equipment already purchased, Attorney General Jackley would not be claiming that the money was diverted from its intended purpose, which was to help the company complete construction.

    Interestingly, the Argus article today about Benda says that the other $450,000 - or at least some of it - was used by NBP to pay taxes. So when Rounds talked about wanting NBP to pay local taxes, he was a bit shifty because he didn't disclose that the state was giving NBP - a private company - the money to pay its local taxes. Will the state give my business money to pay its taxes?

  48. caheidelberger Post author | 2013.11.24


    (1) Are you saying Joop Bollen and the EB-5 investors and White Oak and Scott Olson's excavating company are foolish to be fighting in court to win priority for their claims as creditors?

    (2) NBP purportedly didn't use the money as a reimbursement for equipment. Over half of the money allegedly somehow went to pay SDRC's loan monitoring fees. What obligation was Mike Rounds under to reimburse NBP for any costs? And what right did anyone have to take state money that was explicitly designated for documentable construction or equipment costs and use it for other purposes not included in the agreement?

    (3) Did NBP pay the state a rent deposit for construction costs and equipment? Will the state write me a check for my next rent deposit if I'm losing money?

  49. caheidelberger Post author | 2013.11.24

    Bree, Anne Beal is real, and I appreciate her willingness to share her full name with us all. Unlike Pat, I welcome speakers from all sides, as long as they are willing to discuss the issue at hand and not devolve into personal attacks (which is what I'm seeing above in response to Anne's incorrect statements).

    Anne Beal is also mistakenly viewing this story through partisan blinders. The problem here is not so much that Marty Jackley is a Republican as that he is part of an entrenched good-old-boys club that appears determined to defend itself against any revelations of its corruption. Brendan Johnson is the perfect guy to investigate in this situation, because he is not part of that club.

  50. caheidelberger Post author | 2013.11.24

    And hey, on those airline tickets: is it possible the double-billing really happened, but that Benda was working the system to cover the flight costs for James Park or someone else who couldn't get direct state reimbursement? Could it even have been an arrangement that Rounds approved as a simple way to reimburse someone for legitimate work on behalf of the state, but which now on paper is a convenient way to hang Benda?

  51. caheidelberger Post author | 2013.11.24

    Owen, that's an important comment from Benda's sister Dorothy Hallman. It suggests that, if the Jackley non-investigation is a cover-up to make Benda out as the fall guy, Benda's family and friends may become strong allies in the effort to find out what really happened.

    I wonder if any of those family and friends have access to a diary....

  52. Bree S. 2013.11.24

    Makes it worse. Haven't got anything nice I can think of to say, so I'll just be Thumper.

  53. Disgusted Dakotan 2013.11.24

    @Cory great job on the coverage of this corruption. It is not just this obvious corruption that makes good Republicans' skin crawl, but the ugly machinations of Troy Jones and Pat Powers defending it and trying to distract from the real issues.

  54. Roger Cornelius 2013.11.24

    And Atlas Shrugged!

  55. Troy 2013.11.24

    There is much of this entire matter I don't defend. My point, except for the double billing may not be illegal.. We don't have enough facts yet and so far the speculation is unfounded.

    What is the real issue?

  56. Bree S. 2013.11.24

    How about the speculation that Nelson is *somehow* involved with the robocalls that disabled veteran Willard placed informing voters about their legislators voting to end the educational benefits for in-combat National Guardsman, for which the state fined Willard $250 under a state statute that was repealed? Is that unfounded speculation, Troy?

  57. Disgusted Dakotan 2013.11.24

    @Bree Daugaard violated the same statute, then he and Jackley have a major press conference claiming the calls were lying. They then spent tens of thousands of dollars just to go after their political opponents resulting in a whopping $$250 fine! Compare the damage control Jackley has done with this millions of dollars of lost tax payer dollars and the weak response to people like Jones to this actual crime and the venom he and Powers expended at Nelson who was cleared of all active involvement in the crime of a disabled veteran exercising his freedom of speech to protest these corrupt crooked politicians!

  58. Bree S. 2013.11.24

    The vile filth and lies posted by hypocrites who call themselves Republicans in order to protect their power base.. how they can look at themselves in the mirror everyday railing about "anonymous robocall attacks" that actually included an appropriate disclaimer (Veterans Against Unethical Politicians) and told the truth about legislator's votes.. and then amazingly claim some sort of unfair speculation over a federal grand jury subpoena and a missing half a million dollars that "purportedly" went somewhere? These despicable politicians care more about whether a phone call included an address than the mishandling of taxpayers money and corrupt cronyism in the government. This Attorney General is a bought and paid for shill and I refuse to be associated with him as a Republican.

  59. Bree S. 2013.11.24

    And PP, despicable lying shill, is not only calling everyone who posts on his tabloid "Stace" he's now saying "Anonymous" commenters are me. If I post on his blog I pick a pseudonym (Typical Anon) since he's banned me for pointing out his tornadic spin. I don't post as Anonymous.

  60. caheidelberger Post author | 2013.11.24

    Troy, that did not sound like an answer. The real issue is that a whole lot of money is missing, due to a remarkable lack of oversight, and we need to find out where all the money has gone and make sure it hasn't been used for ill.

  61. db 2013.12.03

    Don't think anyone likes greed, and in the end, this likely will end in an outcome that shows politicians, yet again, padded the wallets of their cronies.
    Meanwhile, our poor children are working as housekeepers. Hang em all if it is the outcome.

  62. gad 2014.01.22

    This is a fun read---federal grand jury indicts former governor yesterday (1/21/2014). Could this happen here in SD?

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