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Daugaard Trusted Non-State Employee to Carry Million-Dollar Check

Last updated on 2013.12.16

Wait a minute. Let's read that again. How'd Governor Rounds's one-million-dollar lame-duck Future Fund grant get from Pierre to Aberdeen?

[Northern Beef Packers CEO David] Palmer sent an email to [state economic development chief Richard] Benda on Jan. 5, 2011, requesting payment. The email was accompanied by bank statements, canceled checks and evidence of wire transfers totaling more than $1 million for construction and equipment.

The next day Benda submitted the paperwork for the payment to be made, according to Tony Venhuizen, a spokesman for Gov. Daugaard.

“At that time, Benda requested that the state auditor issue a paper check and deliver it to him at GOED,” Venhuizen said.

Daugaard took office on Saturday, Jan. 8, 2011. Benda picked up the check at GOED on or about Thursday, Jan. 13, 2011, for hand-delivery to Northern Beef, according to Venhuizen [Bob Mercer, "Missing $550,000 Used to Pay Benda," Aberdeen American News, 2013.12.13].
The state disburses one million dollars. It hands a paper check to a civilian, someone no longer on the state payroll, to privately hand-deliver to the recipient, who then gets shaken down by that unofficial courier's private employer for an immediate $550,000 payback.

What kind of state government lets that happen?


  1. Rorschach 2013.12.13

    What was Benda's last day of state employment?

  2. Rick 2013.12.13

    Reckless, reckless, reckless.

  3. Sid 2013.12.13

    Here are some questions, some of which are relatively benign, some of which are not, but all of which should be asked.
    What other monies did SDRC require (extort?) from Northern Beef and other recipients of the EB-5 monies? Who was selling the insurance to Northern Beef after Dennis Hellwig was ousted in 2009 until the collapse? (We know that at least one of the figures in this fiasco was involved in selling insurance and was able to buy a million dollar plane last year.) Who were the employees of SDRC other than the ones we have heard of? Was the detail on Benda's death certificate about the manner in which the shotgun was used an indication from the Medical Examiner that he was "persuaded" to rule it a suicide and desired to keep the flames of speculation burning? Why are legislators who are honest, regardless of their political ideals called "conspiracy theorists"?

  4. Rorschach 2013.12.13

    Mr. Benda may still have been a state employee when he carried the big check to NBP. I don't know what date his state employment ended.

  5. Robert Klein 2013.12.13

    I'd not think it possible to get a paper check from state government placed in anyone's hand. Wire transfer, maybe.

  6. Nick Nemec 2013.12.13

    Robert is absolutely right, why, in the 21st century, is the State of South Dakota using paper checks for amounts like this? Wire transfers, bank account to bank account, should be standard operating procedure for all amounts above some threshold.

    It would seem there are some standard business practices that are not being followed by the crew that runs things in Pierre.

  7. Rick 2013.12.13

    This fast and loose handling of money in the Rounds/Daugaard regime, now finishing its 11th year, makes me more curious about its work on the doomed Hyperion financing project. Rounds had personal and deep involvement in it starting with his decision to hide the project's intentions until landowners were pressured into deals. They had to cough up $10 billion dollars for a "green refinery" design which had never been built in the United States, and the U.S. Government was never an option.

    Considering how much got raised and muffed in the beef plant and mega-dairy operations, how can anyone know the state's involvement with the financing of this hoax? Ten billion bucks is a whole lotta money.

    The $550,000 Benda reportedly pocketed might have been hush money.

  8. Les 2013.12.13

    Epoch Star: 32,000,000.00

  9. Bree S. 2013.12.13

    Whoever picks out the names for some of these financial companies has a penchant for the astronomical.

  10. Rick 2013.12.14

    Why did Rounds authorize a half-million dollar payoff to Benda? Hush money or a golden parachute? And how many other pals got payoffs?

    Didn't Rounds pay his press secretary more than $100,000 to write press releases about what a great job he was doing? Since when do people take state service jobs as a guarantee to get rich?

    No wonder Daugaard/Rounds is Scrooge to expanding Medicaid, an idea that would save money for South Dakota. They're too busy putting state money in the pockets of friends and family.

  11. Bob Mercer 2013.12.14

    Regarding some of the questions above:
    1) Richard Benda arranged for the payment during his last week of state government employment. That also was the last week of the Rounds administration. The check was processed during the first week of the Daugaard administration. Once the paperwork for a payment goes to the state auditor, the governor is out of the picture. That is the way our state government has functioned since its start. The auditor is independently elected (as is the treasurer).

    2) Whether the payment was made by paper check seems irrelevant (although it stirs curiosity). Whether the payment was by paper check or electronic transfer, the $1 million would have been deposited in the account of Northern Beef Packers. From there, the $550,000 was transferred to an escrow account for payment to SDRC's SDIF No. 6 loan pool to pay Richard Benda to be the SDIF No. 6's monitor on the money being loaned from SDIF No. 6 to Northern Beef. SDIF No. 6 was a pool of immigrant investors organized through SDRC under the federal EB-5 visa program.

    3) I have attempted on a number of occasions to obtain information about SDRC's staff. The most I can show comes from public records, the now-defunct SDRC Internet site and from some EB-5 blogs operated overseas. These facts have to be built piece by piece without cooperation from Joop Bollen at SDRC. This is difficult territory.

  12. Jenny 2013.12.14

    So what does all this mean for the Rounds campaign? Will South Dakotans look the other way and still think this is all some democrat conspiracy to keep Rounds from getting reelected? Rick, I never heard that story about Rounds paying his press secretary $100,000 for press releases - what is that about? Cory have you heard that one?

  13. caheidelberger Post author | 2013.12.14

    (I believe Rick is referring to Mitch Krebs, whose press-secretary salary, according to the state payroll database, was $111,394.50... for writing probably half as much text and a tenth as much truth as what I produce on a daily basis.)

    The impact on the campaign depends on how well opposing candidates can explain this story and focus on the real violations of public trust. It also depends on what comes down from the federal investigation, about which AG Jackley finds himself obligated to remain awkwardly silent.

  14. Rick 2013.12.14

    From Mitchell Daily Republic's Republic Insider blog in 2008:

    "(Joe) Kafka is as different from previous press secretary Mitch Krebs as anybody could be. Whereas Krebs was an appearance-conscious TV personality, Kafka is a no-nonsense print reporter. Because of that difference, I’ll be interested to see what kind of salary Kafka gets. Krebs made $111,394.50, which is way more more than most press secretaries in neighboring states are paid."

  15. Jenny 2013.12.14

    Holy, Moly! $111,394 to be a secretary to the governor plus all the state perks? That's only $9,000 more than MNs governor makes which is $120,303. It's also ABOVE what the SD governor makes - which is under $100,000, I believe. What the ____ is going on?

  16. Jenny 2013.12.14

    Mitch Krebs made only $9000 less than what the MN governor makes, I meant.

  17. Nick Nemec 2013.12.14

    Bob, my comment on the paper check for $1,000,000 was simply wondering about the business practices of our state, like you say it stirs curiosity.
    Does SDRC have other staff, or is it a one man shop?

  18. Nick Nemec 2013.12.14

    Jenny, you must realize that South Dakota government exists in part to enrich those who are in power. Krebs' wife, Shantel, is a well connected Republican State Representative who is currently running for Secretary of State and stands a good chance of winning that office. Sadly she has also expressed support for policies that would reduce Native American vote by reducing early voting opportunities on the reservations.

  19. Rick 2013.12.14

    And the spree continues, from Aug. 1, 2013, Political Smokeout:

    "Mike Rounds continues to gradually build a campaign staff. Today he hired Mitch Krebs, his former gubernatorial press secretary, as a campaign spokesperson. Krebs is married to state Sen. Shantel Krebs, Rounds’ campaign treasurer."

    So when they get their new federal and state government jobs after the election, imagine the perks and incomes from your state and federal taxes.

    Little wonder the Rounds/Daugaard regime dropped the ball with a $127 million debt.

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