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State Low-Balled Bollen’s SDRC Salary to Avoid No-Bid Contract Law?

When Joop Bollen took South Dakota's EB-5 visa investment program shadily private in 2009, he took what looks like a pay cut.

When Bollen ran the program under the South Dakota International Business Institute on the Northern State University campus, SDIBI's FY2009 contract with the Department of Tourism and State Development specified his salary as $87,000. The contract specified that Bollen would spend 70% of his time promoting "foreign direct investment activities"—i.e., EB-5 visa investment—meaning that NSU was spending a whole lot of money on a staff member who was spending a majority of his time doing something other than promoting education on campus. So perhaps it's a good thing that Bollen took the EB-5 program private and allowed the Board of Regents to axe the SDIBI director position from Northern's FY 2011 budget.

The December 22, 2009 contract between the state and Bollen's newly incorporated SDRC specified that the state would pay SDRC just $45,000 a year for its services. Why would the state cut Bollen's straight salary so sharply, and why would the clearly entrepreneurial Bollen accept?

One explanation lies in the note attached to the end of one copy of that contract:

Excerpt from SDRC-DTSD contract, December 29, 2009
Excerpt from SDRC-DTSD contract, December 29, 2009.

"In reference to HB1260 (SDCL 5-18-55 through 5-18-62), this agreement is exempt from the requirements of the law because it does not exceed $50,000." This footnote refers to legislation passed in 2009 that required the state to put any contract for over $50,000 up for public bid. Since Bollen and DTSD chief Richard Benda agreed to let the rest of Bollen's compensation hinge on fees collected from EB-5 visa investors, the state could keep Bollen's official state payment low, offer him a no-bid contract, and avoid public competition and scrutiny.



  1. Nick Nemec 2013.12.12

    Crooked as can be. But no-bid, sweetheart contracts for their friends are part of the game plan for the Republicans who run the show in Pierre. What use is it to be in charge if you can't enrich yourself and your friends?
    Right Mike?

  2. Sid 2013.12.12

    In Paragraph 12 of the Agreement, SDRC was prohibited from entering into any agreements with any "foreign agent, attorney, accountant, etc." without the express written consent of the State. So, has anyone sought to get hold of the records from GOED relating to the contracts that SDRC had with entitities such as Henry Global, Jeff Sveen (or his law firm), accountants, Hanul Law firm, Michael Gibson, Maurice Berez and all the rest of the gang?

  3. Roger Cornelius 2013.12.12

    This makes me wonder how many more of these type state contracts are out there waiting for Republican cronies.

  4. Lora 2013.12.15

    Since Joop got sued by the Chinese 3 months after the Dept of Tourism delegated (the word used in the contract) their Regional Center Operations to Joop....does anyone think the State was playing "hot potato" and Joop has no one to throw it to? BTW does anyone know what happened to this lawsuit?

  5. caheidelberger Post author | 2013.12.16

    Lora, if you're thinking of Zhen v SDRC, both sides petitioned to dismiss in early 2012. No one has said publicly why.

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