When Northern Beef Packers swung a second round of EB-5 visa investment worth up to $60 million in November 2010, the slaughterhouse was already two years behind schedule. NBP took another two years to start processing livestock, and it stayed in business for a mere nine months before declaring bankruptcy, dashing the hopes and daily budgets of hundreds of Aberdeen workers.
So who blew the deal? Who is responsible for the bad decisions that let $152 million in private and public investment go for naught?
Would you believe Joop Bollen, the man in charge of the EB-5 investment program?
Read the amended loan agreement between Northern Beef Packers and SDIF LP 6, the legal fiction Bollen created to manage the second round of EB-5 funding for NBP. That March 4, 2011, document includes Section 4.37, which carries the following language over from the Section 4.41 of the original November 4, 2010, agreement. The agreement required NBP "To not change the officers, directors or managers of Borrower or other employees earning more than One Hundred Thousand Dollars ($100,000) per year, or the location of the executive office or principal place of business of Borrower without Lender's approval."
In other words, if Northern Beef Packers CEO David Palmer was making boneheaded decisions, and if general partner Oshik Song or anyone else in a position to throw weight around at NBP wanted to sack Palmer and bring in management who could look at the books, figure out where the money was going, and stop the bleeding, the EB-5 Lender, SDIF LP6, had to approve that change. And since SDIF LP6 is no one but Joop Bollen, that means Joop Bollen had the final say over who ran Northern Beef Packers.
Well, almost final. The credit agreement did not authorize Bollen to terminate any NBP staff. But it did give him veto power over any changes in upper-level management.
And it could be that, since NBP still exists as a corporation, and since the credit agreement is pretty insistent about maintaining full force and effect even if NBP defaults on the agreement, the new owners of bankrupt NBP, White Oak Global, can't clean house and bring in new management without Joop Bollen's approval.
Cory – Another excellent job of laying out information from the GOED Scam, which I am certain would have never seen the light of day if not for you and Mr. Mercer.
You posed an interesting question about timing in your earlier post. Daugaard kept the SDRC contract going more than two and a half years until last September, before the public first heard of the GOED Scam and no doubt weeks and probably months after Daugaard knew the Feds were nosing around. Your question about cancelling the contract indicates he did so not just because of bad PR, but because it gave the state an alibi from its oversight responsibilities. Isn’t two and a half years too late to be washing your hands of responsibility? The action seems to also obstruct transparency (via the GOED) to the press, the public and other investigators expecting the state to do its job of protecting the public’s interests.
Since GOED was the willing patsy in this scheme, do you think the date Nov. 4, 2010, has relevance in the Bollen/Song credit agreement? It would be two days after the 2010 election when the governorship would be successfully cinched between Mike Rounds and his hand-picked successor Dennis Daugaard, guaranteeing the fast, loose and invisible money deals could continue at least another four or eight years.
Thanks, Rick! This is a complicated document. I don't even understand all of it yet. But it seems it's an important part of understanding where all the money went.
November 4, 2010... a lot happened with NBP, SDRC, and EB-5 in the two months after the 2010 election. This agreement was signed. Rounds approved that flurry of grants to help NBP, including the $1M that Richard Benda took by hand to Aberdeen and from which Benda took his pay advance for the next two years. I can't prove a connection to the election, but the timing certainly invites questions.
I think it is also very important to realize that Dennis Helkwig fired Dave Palmer and Carl Wagner in May of 2009 and the Korean lawyers and some state personnel over handed Dennis and made it a requirement that he stayed. That was two months before Dennis sold out to Song. Palmer was everyone's pattsy because they sure didn't keep him for his smarts, that is for sure. But if you were looking for a bufoon to just spill garbage out of his mouth like a puppet then he would be your man.
When a business is under stress and receives a new round of financing, a creditor often places restrictions on the stockholders board which it deems in its interest and a condition for the injection of additional funds.
While Joop may have been the executive head of the creditor, it doesn't translate that he necessarily had "control" but that he was the representative of his investor group which had ultimate control.
Sidenote: Nothing in my words should be inferred of a defense of Joop (I have my own criticisms of him) or the merits of NBP or the wisdom of anyone involved. My only point is to say what is reported by Cory above is normal and customary for which inferences of anything improper need significantly more information.
What confounds our ability to trust is when the Attorney General jumps into a major political scandal to protect a guy who holds no public office, but who leads his party's ticket on the 2014 ballot. What confounds our ability to trust, among other things, is the bizarre set of circumstances around the "suicide" of the GOED Scam's central figure who dies, very conveniently and suspiciously, before the public found out about a federal investigation, but long after the Attorney General, the former Lt. Gov. and the former Governor were aware the shit was hitting the fan over unethical activities, and possibly illegal activities.
I don't think there is a "normal" issue in the GOED Scam. It all looks pretty extraordinary and greedy to us.
I did not consider myself in the market for slimming bathing suits until just now. If that can be useful to me, imagine how useful it might be to some others.
Rick,
I subscribe to Occam's razor and deeply discount conspiracy theories, especially ones that require as many pieces and co-conspirators as your assertion.
Troy, note that I'm not peddling a deep conspiracy theory in this post or sensationalizing anything. I'm saying exactly what the loan agreement said. I'm saying that this document essentially makes Joop Bollen and the EB-5 program partially responsible for bad management at NBP (and come on, a four-year delay in construction and bankruptcy after nine months doesn't happen under good management).