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Kephart: GOED/EB-5 Scandal Not Going Away, Jackley Playing Politics

Last updated on 2015.02.03

Regular readers know I enjoy Sam Kephart's commentaries. The 2008 GOP Senate primary candidate offered us his penetrating insights on South Dakota Republican Party politics and "corporate kleptocracy" in a wide-ranging interview this summer.

This weekend Kephart wins promotion from the comment section with his take on the scandal surrounding the Governor's Office of Economic Development, South Dakota's use of the EB-5 visa investment program, and Richard Benda's death. Kephart says political pressure and maybe even the Chinese Mafia are keeping Attorney General Marty Jackley and Governor Dennis Daugaard from tearing this scandal open and pursuing answers with the necessary vigor.

This entire scandal stinks to high heaven.

I know, like, and support Marty Jackley and I'm sure he is in exquisite pain over this... divided between what he knows is the right thing to do, which is to rip this case WIDE open with no holds barred and no favors done, versus having to be cautious to protect his pecking order status within the State GOP, which would suggest (or lean on him) that he give the benefit of the doubt to his political seniors... which I'm sure is going on behind the scenes.

I know some things about EB-5 investments; they can be great and legitimate, but many are fat money scams.

Has it occurred to anyone of our senior elected officials that maybe, just maybe, Chinese Mafia (Triad) money was somehow involved and scrubbed through this meat packing deal? It wouldn't be the first time.

Like the Russian Mob, these Chinese boys can play rough.

And even the FBI itself has recently been tainted with EB-5 money involving Chinese investors and some Las Vegas developers with mob connections:

The potential scandal here is WAY BEYOND anything South Dakota has experienced before and, quite frankly, is properly prepared to correctly investigate, good guy Marty Jackley and his fine staff notwithstanding.

Governor Daugaard and Jackley need to put together a Blue Ribbon panel (none of the Governor's cronies) and give them carte blanche to hire outside world-class forensic investigators, beyond the Feds and our DCI, and to secure a retired top-notch prosecutor from elsewhere to head-up the investigation and put it firmly to bed one way or the other.

This issue is NOT going to simply blow over no matter how much hand-wringing, log-rolling, and head-shaking go on.

Even if Benda did commit suicide, which I don't believe, then one must ask what drove him to do it and why? What did he know or fear that was so oppressive to his future prospects that he would take his life? Duh...

Too many deep questions and too many blandishments at this point for my satisfaction [Samuel Kephart, comment, Madville Times, 2013.11.30].

Kephart follows up noting that very little business happens in China without government involvement. He suspects the bankrupt EB-5-dependent Northern Beef Packers plant in Aberdeen was really a money-laundering operation gone awry. Kephart also asserts that political pressure is muzzling at least some of the press:

I had dinner last evening with Shad Olson (KNBN-TV) and he has expressly been forbidden from doing ANY investigative journalism WHATSOEVER on this story by the owners of the station. Why is that? Shad is very good at this sort of story (he's won a national Emmy previously); Jim Simpson needs to empower him here, not hold him back [Sam Kephart, follow-up comment, Madville Times, 2013.12.01].

Kephart is just one more example of South Dakotans across the political spectrum (Democratic Rep. Kathy Tyler, Independent gubernatorial candidate Mike Myers, the Mitchell Daily Republic, up to 90% of Madville Times readers...) who see that the story Jackley, Daugaard, Rounds, and their mouthpieces are spinning doesn't add up. Kephart's commentary demonstrates a Watergatian erosion of public trust. To restore that public trust, legislators, candidates, and voters need to demand answers and action.


  1. interested party 2013.12.01

    Rubbing Republican rhinoplasty in their own rubbish is righteous reality.

  2. vikingobsessed 2013.12.01

    Wow! Not a big fan of Shad Olson, but the fact that he is being forbidden to do any kind of story on this is BIG NEWS. It should be a wake-up call to the apathetic, rubber-stamp Republicans out here. Possibly he could do a story on not being able to do a story. I would be interested to know where the order came from...the station or a politician. Maybe an east river news outlet would do a story on west river outlets not being able to cover EB-5. That would be all kinds of awesome. Once again, our west-river head in the sand mentality is painfully obvious.

  3. Rick 2013.12.01

    If a fraction of what Sam says is true, you can expect some resignations in high office here in South Dakota. The feds won't let a cover up be the last word.

    The EB-5 program may be a useful program, but it's clear care and caution were thrown out long ago in this state. Privatizing a state office where these kinds of sums and where citizenship papers are handled like Halloween candy was a crazy mistake.

    The difficulty here is this story has a lot of sideshows and distracting issues which help to let Jackley and the people he's covering up for get away with illegal and unethical behavior. It's important to focus how the culture of corruption got started in Pierre, and what were the catalysts to group-thinking that led many important and powerful people think they can get away with anything, including a possible murder.

    I think the starting point is the state gag law which punished whistleblowers who reveal financial scams, like the way Republicans ran the State Treasurer's Office and the unclaimed property fund. Mike Rounds led the charge to gag public officials back then. The Benda killing blew the doors off the deep and wide corruption of the Rounds/Daugaard political machine. The feds will make sure the doors are not welded back on.

    With due respect to Sam's friendship with Marty Jackley, Jackley is clearly on the side of welding the doors back on and gagging any future attempts to provide public scrutiny of Rounds' and Daugaard's dirty deals.

  4. Cranky Old Dude 2013.12.01

    Once agin: Shh! There's an election coming-don't startle it-its carrying a big trough of gravy and they don't want any of it spilled.

    Or is it, "Dinks in the wire! Fire the claymores!"

  5. Nick Nemec 2013.12.01

    The encircled powers that be are afraid of anyone breaching the wire. Claymores are being fired over at the War College.

  6. Les 2013.12.01

    Im surprised at your lack of inspiration for the reasons our State Treas Office dropped a cash infusion lately Rick. A Gov wrote the book on the SD gag, over Dick Butlers efforts to tend to SD's biz in that office. Brendan handling the current investigation and Dad running the US banking system, make banking whoopee a no no.
    Sometimes you have to realize, the only way to get out of the hole is to stop digging. I have to believe, that folks not involved are being used to distract or cover for those who were.
    Is the stick theory on Benda reaching the trigger a good excuse for not meeting the chemical test for firing a gun?

  7. caheidelberger Post author | 2013.12.01

    Claymores?! Those look nasty!

    Given that the feds seem to be our only hope for an honest investigation, maybe the Republicans were doing Rounds a favor by shutting down the government in October?

  8. grudznick 2013.12.01

    It would be shocking if Mr. Sattgass or any of our GOP constitutional officers were embroiled in this EB5 chinese mafia thing. You fellows are now just making things up and throwing them at the wall.

  9. Bree S. 2013.12.01

    I bet all the Hutterites voted for him.

  10. Les 2013.12.01

    I would look to Rich as being one of the most honorable folks in the system. Obviously Treas Dick Butler was shown how the game is played in Pierre and found out he was limited in his powers. Now is probably as good a time as any to throw some fodder for the good folks investigating our fine state to witness. Yes Grud, it would also be shocking to even think, after the current SOS, our officers actually can be held responsible for their actions and abilities or lack thereof.

  11. interested party 2013.12.01

    certainly is curious why he would choose such a rendezvous just to find the right stick.

  12. chris 2013.12.01

    KNBN probably has higher standards for their own reporting.

  13. caheidelberger Post author | 2013.12.02

    Note, Chris, that the "documents" to which Dunsmoor refers are really the counterarguments Joop Bollen filed with the court when he sued the Chinese investors. He doesn't have documentary proof that a Chinese investor was sabotaging Northern Beef Packers. He has Joop Bollen's claim, a claim on which the court never acted, since all litigants agreed to drop the case... which means some money must have changed hands.

  14. caheidelberger Post author | 2013.12.02

    I've expressed skepticism about the reliability of Shad Olson's reporting in the past. But if Kephart is right, if KNBN management is blocking Olson from even taking a swing at the story, that's a problem. It would be interesting to see what the ultra-conservative Olson would do with the story and whether his coverage would be any different from mine.

  15. chris 2013.12.02

    Yeah, that's right. KELO read it as if it was fact.

  16. Troy Jones 2013.12.02

    Things that cause me to roll my eyes:

    "Barack Obama is a Muslim"
    "Dusty Johnson was once a Democrat"
    "I don't think Rich Benda committed suicide" (unless they think it an accident which without a note is hard to distinguish)

    Conspiracy nuts are just that- nuts.

    Very few people close to a person who dies by suicide have any clue. They even dismiss statements of suicide thoughts as expression of frustration and not the despair they feel deep inside themselves.

    Further, the statement we need to know what pushed him to do it shows ignorance of the mind of on who dies by suicide. Suicide is a state of irrational despair not associated with a single moment or cause.

    Maybe Rich did something illegal or immoral associated with the beef plant. I have no problem with the federal investigations running their course. But, I roll my eyes when some conspiracy theory he was murdered without a shred of evidence.

  17. Bree S. 2013.12.02

    You're right Troy. It makes a lot more sense that he drove 3 hours to pretend to go hunting at dusk - and decided to off himself by "securing" his shot gun to a tree, turning sideways to the gun and pushing the trigger with a stick. Benda was tall enough to just be able to bend over the gun and push the trigger if he had the sudden urge to shoot himself in the gut with a shot gun. Never mind that his friend and person who received his last text said he didn't even like to hunt. Never mind that investigators told that person that they were only investigating Benda's death as suicide or a hunting accident, not murder. Never mind that it took more than a month to get the death certificate.

    Never mind that shot guns only account for 5% of firearm related suicides.. which makes them uncommon enough that investigators arriving at the conclusion that Benda shot himself IN THE SIDE with a shot gun SECURED TO A TREE?? by pushing the trigger WITH A STICK!! without ever even considering the POSSIBILITY that it could have been a murder is just plain weird and incompetent.

  18. caheidelberger Post author | 2013.12.02

    Thanks, Troy, for the comment (and I hope you don't mind that I deleted the earlier version from the other thread, per your statement that it was on the wrong thread).

    I remain uneasy about the official story... but I acknowledge the validity of what you are saying. A lot of reasonable people (not just us crazy blog folks) look at the circumstances around Benda's death and think there's more to it than what AG Jackley is telling us. At the same time, it is far from unreasonable or incredible that an ambitious, reasonably successful man, somewhat unmoored from stable family life, and faced with a loss of reputation from revelations of wrongdoing and the failure of projects (NBP, SDRC) that he'd championed, would step out into a South Dakota autumn afternoon, prop a shotgun between a tree and himself, and poke the trigger with a stick.

    Troy is correct to say we have no concrete evidence to back Kephart's suggestion that the Chinese mafia could be involved (either in directly killing Benda or in creating a pressure beyond the fines Benda might face for misplacing state or EB-5 money). But we do have a lot of circumstances, including the disappearance of a much more money than three airline tickets and one $550K misappropriation) that warrant scrutiny. I'll bet the FBI and whoever else is doing the real investigation says crazier stuff than what Sam says above in their discussions of the evidence they have and their brainstorming about investigative avenues to pursue.

  19. Bree S. 2013.12.02

    Not a conspiracy theory:

    Hong Kong is a major world money-laundering capital and has an estimated 200,000 Triad members in residence in several different "families." The Triads are known to engage in bank fraud, human trafficking and prostitution and have known well-established ties to the Chinese Communist Party. Also the Philippines is a known operational base for the Triads.

  20. Rorschach 2013.12.02

    Speaking of conspiracy theories. There was this conspiracy theory floating around for years in which 2 teenage girls disappeared in 1971, neither them nor their car ever being seen again. But decades later, somebody dreamed up (and I'm not even exaggerating here) the idea that a 17 year old boy must have offed them and disposed of their bodies and their car in the absolute perfect crime. His sister through hypnosis even recalled seeing him with their bodies. Inmates recorded the suspect's confession. Murder charges were brought because the evidence was piling up even without bodies or the missing car. But it turns out just to be one big conspiracy theory. The girls crashed their car into a creek - right where they were last seen - and nobody bothered to carefully search the area either at the time it happened or for the next 40 years. Much easier to believe a hypnotically recovered "memory" than to pursue the most obvious explanation.

  21. Bree S. 2013.12.02

    Were state investigators working on Benda's case following a hypnotically recovered memory when they decided not to investigate his death as a possible murder?

  22. Bree S. 2013.12.02

    An honest thorough investigation doesn't just rule out possible tracks at the beginning of an investigation, when they're still conducting interviews.

    An honest thorough investigation would also find the time over a five month period to actually question Benda about the travel vouchers and $550,000 before closing the investigation.

  23. caheidelberger Post author | 2013.12.02

    And who floated that conspiracy theory, R?

  24. Les 2013.12.02

    This could very easily have been put to bed. As Gov Janklow used to say, prove me wrong. 30 days to bits and pieces of news guarantees no control on quality investigative work or citizen comfort.
    Ror your comments relate well to how a poor investigation promotes theory.
    As to what a rational mind really is, well, I'll leave that for someone braver than I to cast the first stone on.

  25. Bree S. 2013.12.02

    I doubt anything will come up in the journalistic review by Mercer/Montgomery to seriously question the suicide conclusion. I think this will stay in the books as a suicide, true or not. I'm not trying to be pessimistic, but the state investigators spent a month not investigating this as possible murder. Who knows what possible evidence was missed due to that mindset.

    Hopefully the federal investigation into the money trail goes better.

  26. Douglas Wiken 2013.12.02

    My son worked for a time selling ads for KNBN. The guy who hired him left for a much bigger, better job in Denver and what was left was a bunch of lunny wingnut right fueling their venom with ignorance. Simpson and the oil company that probably owns the station is not interested in real news. It is a vehicle for Faux News and a few inane, irrelevant local interviews.

  27. Anne 2013.12.02

    When government and business are caught in collusion over some business ventures, they create the ideal breeding ground for conspiracy theories. When I was working in South Dakota, I was familiar with a number of well-established businesses that spurned offers to expand into South Dakota because of the reputation the business community has earned and what kind of "enterprises" government economic development organizations have catered to.

    With the horrible stench lingering over the state, one would have to be more than little batty not to believe that the rot is deep and widespread. It does seem contradictory that someone who commits a desperate, unreasoned act would reason such an elaborate plan to commit it. But the moral condition of the state could certainly inspire unreasoned acts.

  28. interested party 2013.12.02

    south dakota: the pink slime state.

  29. Douglas Wiken 2013.12.02

    "Pink slime" might be an apt name for South Dakota business, but I think the attack on the "food" called "pink slime" may have been essentially wrong. It was one less waste of food.

  30. Deb Geelsdottir 2013.12.02

    Doug, Pink Slime is just gross. Human beings should not consume a food whose name includes the word, "slime." This has nothing to do with science or health or anything rational. "Pink Slime?!"

    Feed it to pets, not people! Gross!

  31. Troy Jones 2013.12.02

    Rich is my friend as he was the "manager" on a softball team 25 years ago on which I played.

    Nobody who has posted or Kephart knows anything remotely considered evidence but they have a lot of crazy conspiracy theories. When we question the integrity and competence of out law enforcement, we question the fabric of our ver society.

  32. Bree S. 2013.12.02

    No, when we question the storyline we question the fabric of your society.

  33. interested party 2013.12.03

    Troy apparently acknowledges Eric Holder's infallibility as Top Cop.

  34. Roger Cornelius 2013.12.03

    Troy Jones, "When we question the integrity and competence of OUT LAW Enforcement..........."

    Boy, did he get that right!!!

  35. Bree S. 2013.12.03

    Ha Ha Roger, I didn't even notice that. Maybe Freud deserves more respect.

  36. Roger Cornelius 2013.12.03


    Sigmund is chuckling!

Comments are closed.