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Legislative Committee Holding First GOED/EB-5 Hearing: All Blame on Benda

The Legislature's Government Operations and Audit Committee is holding its first hearing on the Governor's Office of Economic Development and the EB-5 visa investment program. You can listen online through South Dakota Public Broadcasting.

GOED chief Pat Costello has made two very important statements thus far. Bob Mercer reports that Costello opened his testimony by saying "This is a serious matter and deserves serious attention from state officials." Costello's line reflects Governor Dennis Daugaard's professed alarm over the GOED/EB-5 scandal and further refutes the interference that GOP mouthpiece Pat Powers offered to excuse his lack of GOED/EB-5 coverage when the story broke last fall.

But Costello and Daugaard are going to make sure the slop from this scandal does not splash up on their administration. Costello declares that the buck stops with Richard Benda:

Any alleged wrongdoing in our office is isolated to a former employee no longer with us [Pat Costello, testimony before Government Operations and Audit Committee, quoted by Bob Mercer, 2014.03.07].

Former GOED chief Richard Benda is not here to defend himself, since he died last October. We have yet to see if this investigation will branch into implicating anyone outside of the Governor's Office of Economic Development in wrongdoing related to the questionable EB-5 program.


  1. larry kurtz 2014.03.07

    sex and money go together like bees and honey.

  2. owen reitzel 2014.03.07

    blame it on the person who can't defend itself. No surprise.
    How can the Benda family stand back and not say anything?

  3. mike from iowa 2014.03.07

    What is this,the Warren Commission? Benda acted alone? Are they sure there wasn't another "bad actor" on a grassy knoll somewhere? Cory,it is Mardi Gras time. Scare up some voodoo and a seance and get Benda's testimony before the state closes the books on this crime.

  4. Nick Nemec 2014.03.07

    Who approved Benda's expenses? The current GOED and by extension the Governor are essentially claiming he set up some sort of independent fiefdom beyond oversight or audit. He was a cabinet level department head didn't he report to someone else? Possibly the Man sitting behind the desk in the big office on Second Floor? Where were you Mike Rounds? Apparently the complete hands off style doesn't work or possibly your much touted business experience is a load of crap.

  5. Nick Nemec 2014.03.07

    There is a clerk someplace in State government who was told to shut up and rubber stamp the expense account or loose her job. She needs to blow the whistle.

  6. AnnieTee 2014.03.07

    All requests for payments must go through the State Auditor's office. They are supposed to take the side of the taxpayers. It's why that position is independently elected - to serve as a checks and balances system. Nobody seems to be asking questions in that direction. The money didn't go from point A to point B without going through several steps along the way. It's impossible for Benda to have acted alone. Even if all the other parties did was just to be silent and let it happen, they are still to blame as well.

  7. caheidelberger Post author | 2014.03.07

    Annie, perhaps GOAC committee member Sue Wismer should consider changing her candidacy from Governor to State Auditor?

  8. Troy 2014.03.07

    Since Wismer is a CPA and should be the Dem point on this as she should understand the standards and practices yet admitted she didn't read the report, I think them Dems might be lining up behind a lightweight who doesn't even do the minimal work. Gotta love the Democrats.

  9. larry kurtz 2014.03.07

    That the Rounds regime colluded with Benda why should the Dems worry?

  10. larry kurtz 2014.03.07

    RT @ArgusMontgomery

    "Auditor: "Somewhere along the line, something should have happened that triggered (alarms)" over Benda's expenses.

    Costello: "Any alleged wrongdoing in our office is isolated to a former employee who is no longer with us," presumably referring to Benda."

  11. Nick Nemec 2014.03.07

    The Republicans line up behind whoever can grease their palm the fastest.

    Mike Rounds has some culpability here. He was Benda's immediate superior, if he wasn't aware of what was going on he was a negligent, incompetent administrator and if he was aware he is a co-conspirator. Either one is a disqualifying factor for a US Senator.

  12. Bill Dithmer 2014.03.07

    Democrat to Republican, "how do you get so much out of the people you represent?"

    Republican to Democrat, " Astroglide."

    The Blindman

  13. Jim 2014.03.07

    Troy, now it is wismer's fault bc she is a CPA and can't figure it out from the sidelines on the first day of hearings? More disgusting arrogance from the party in power. You know deep down this thing is rotten to the core. People at the core are still alive, and your soft sell on this is a discredit to an honest man as yourself.

  14. DB 2014.03.07

    Are you guys still upset over 10k?

  15. Rorschach 2014.03.07

    Troy's just watching from the sidelines enjoying the shell game that goes on in our one-party government. Here's the secret. The ball isn't under any of the three shells the Republican administration puts on the table. It's up to Democrats and the public to figure out what other shells there are besides the ones the Republican administration is offering up. After you figure out what other shells there are, then you have to figure out where those shells are. Then you can look under them.

    Both the Rounds and the Daugaard administrations had all of the documents for years that are now coming to light. But did they ever say anything about Benda & Bollen's shenanigans before they were forced to? They pushed everything under the rug. This is a kangaroo hearing. The Republicans don't want to publicly uncover anything that implicates other Republicans (at least living ones). And the Democrats either aren't going to know what questions to ask or the Republicans running the inquiry aren't going to let the Democrats ask the probing questions.

  16. David Newquist 2014.03.07

    From the day Benda was found dead, honest observers of South Dakota’s single-party rule predicted that blame for any nefarious business uncovered by the investigations would be placed on him. There is a long, accessible history of secret and devious business dating back to when Janklow refused to the tell state treasurer, Dick Butler, of secret bank accounts and the amounts in them that he colluded with the credit card companies to establish. Then through his legislative chum at the time, Mike Rounds, he got a statute passed to make it a crime for any state official to publicly mention that any criminal investigations were taking place regarding private corporations’ relationship with government agencies and officials.

    While the EB-5 program may have its problems, the essential matter is how it was used in South Dakota and who was involved. The scheme embraces local economic development agencies, corporations that work through them, prominent law firms associated with the state GOP, and members of local governments Benda was just one player in a large array of people involved. He was not the only perpetrator and he operated under the direction and influence of a GOP power elite. It may be identified by perusing the lists of officers and counsels of the companies, organizations, and officials involved in EB-5 development efforts.

    The South Dakota GOP mindset has come to believe that the right to corruption is one of the spoils of winning elections. There is too much accessible information and documentation, much of it collected by Cory, to let denials by state officials and specious but malevolent blog commenters divert attention away from the network of corruption that runs this state. And no Democrat should utter the crap about these being good people who just happen to possess different opinions on how government should work. These are devotees of the Richard Nixon school of public service who intend and do ill whenever they can get away with it.

  17. caheidelberger Post author | 2014.03.07

    10K? I'm upset about $550K... and crony capitalism, and unchecked authority arrogated by a private agency, and refusal to answer questions, and the state's efforts to drive small dairies out of business, and the absence of any list of Philippine and Vietnamese EB-5 investors recruited during Benda's intense recruiting trips... is that enough?

  18. John Tsitrian 2014.03.08

    I'm not saying anybody lied, but I wanted to share this here. Re: "Slaughterhouse EB-5" From a reader of my piece in the Constant Commoner who mulled over Richard Benda's suicide: “I think you guys are going to have to come up with a lot of wonderful new lies, or people just aren't going to want to go on living.” --Kurt Vonnegut, Jr. Slaughterhouse Five.

  19. Tara Volesky 2014.03.08

    I am concerned with the Federal investigation. Who are the names of the people investigating and how many are on the case, who has been interviewed, subpoenaed, indicted. Pretty secretive. Dick Butler should have been one of the first people called. He has so much information, it's unbelievable. He can give the background of the culture of corruption in SD politics. I don't think he will suggest it's just one-sided. He served as treasurer from 1995-2003. I believe this investigation is going to turn out like the so called audit on the GEOD, pretty much a review. Our congressional politicians will make sure of that. Just look at who Thune is endorsing. Like I said I don't trust any beaurecrat unless it's an outsider that has no affiliations to any party in SD. This is all going to be covered up if we don't electe a new governor. The media is doing a great job silencing the EB-5 scandal except for Cory and the investigative reporter who is working on the story.

  20. rick 2014.03.08

    Rorschach and David sum this up neatly and provide the warning that nobody outside the airtight environment on the 2nd Floor has access to all records. The alleged Attorney General and Gov. Daugaard's junkyard dogs will show only what they think they can minimally get away with. Their trusted sycophants in the blogs and coffee shops all over the state are working hard at telling us this is just a tempest in a teapot and there is nothing that's going to stick to Rounds or Daugaard. Just relax.

    They take comfort in the truth that dead men tell no tales and that the party out of power, the press and 99 percent of the public have no capability of challenging the alibis and narrative they have manufactured. As David and Rorschach say above, this small group of political insiders have known for months the cat was out of the bag. They've been working on how to manipulate the press and the public to get off the hook.

    None of the statements on the GOED Scam from Daugaard and Costello would have ever been uttered had they not been caught.

    Tara, I agree with you. I don't expect the politically cautious Brendan Johnson to push his way into the 2nd Floor sanctum and produce anything beyond what Cory, Steve Sandven and Bob Mercer are able to produce.

  21. Robin Page 2014.03.08

    FOLLOW THE MONEY! Of course there are others who have financially benefited from this scandal. Thank you Cory for your ongoing reporting of this matter. We the CITIZENS have a right to know the truth.

  22. Bill Dithmer 2014.03.08

    I think it would be fun to know
    1. Who the trustees are that have power of attorney for Mike Rounds blind trust, and what their connection to EB-5 might be.
    And 2. What connection the carriers for Fischer Rounds and Associates might also have.

    I'm not saying there's anything wrong, just that things have been pretty easy for Smiling Mike for a long time now. Who was really in control?

    The Blindman

  23. Lanny V Stricherz 2014.03.08

    How many of you have called Brendan Johnson's office and asked about having the results of the investigation so far, made public before the June primaries? When I called I was given the phone number of an attorney in his office to contact. Her name is Connie Larson, 357-2362. She passed my concerns on to Mr Johnson. Got to make that wheel squeak, if you want it to be greased.

  24. Troy 2014.03.08


    You are really suggesting the following?

    1) The US Attorney should use his position to accelerate the process of a matter under their jurisdiction for political purposes?

    2) The US Attorney should respond to phone calls to affect the process?

    Personally, I would consider both an abuse of power. The US attorney should proceed on this case with the same diligence and speed they do when pursuing any case.

  25. John Tsitrian 2014.03.08

    Are you suggesting that the U.S. Attorney should be insulated from public input?

  26. caheidelberger Post author | 2014.03.08

    I don't think the U.S. Attorney should be insulated from public input. But if I were U.S. Attorney and I were fielding calls like what Lanny suggests, I would ask the same question I ask blog sources: what new information do you have? What documents and other evidence can you show me that will advance the investigation (assuming there is an investigation, which I can't comment on, because I'm the U.S. Attorney)?

  27. Tara Volesky 2014.03.08

    Is Johnson even investigating the case or did he recuse himself because of his close ties to Marty Jackley. This investigation should be wide open to anybody that knows any information. They should have subpoenaed dozens of people by now. This goes beyond NBP. Look at all the investors that were scammed. Has anybody mentioned Ridgefield Farms in Huron? They came in and fleeced the town, state and investors for millions. I believe Dakota Pork received 2 1/2 million from the state and shortly after that, they closed. This is a racket that has been going on for several years and all we're talking about is Richard Benda's expense account. I am very disappointed with the press and whoever happens to be investigating this mess. There should be news conferences providing us with information. That is why my trust with government officials is gone. I want some answers......NOW!

  28. Earl Hanson 2014.03.08

    Mr. Reitzel, you asked why the Benda family is so quiet. Could it possibly be because the $550,000 is in the Benda estate account. Unless someone out here has a better idea where it is. It might also explain why the next of kin won't release the results of his death investigation.

  29. Troy 2014.03.08

    John, insulated no. But I also think one should make decisions with regard to speeding up or slowing process based on political considerations. We are nation of laws and expect the enforcers to be blindly pursuing justice. Lanny's admonition to call to serve a political agenda makes enforcement arbitrary.

  30. John Tsitrian 2014.03.08

    Troy and Cory, Democracy makes a lot of noise. As long as the discourse is civil, citizens can approach any public agency's office freely and merit no admonishment for doing so. Why shouldn't a govt attorney know about the urgency or the public interest in a case or investigation that is ongoing? As Lanny notes, the wheels of justice can sometimes use a little grease.

  31. Troy 2014.03.09

    John, we have a law in SD that it illegal (outside official channels, ala both parties present) to try to influence jurors and judges about matter before them.

    Bit, what you are advocating will in effect allow the mob to get justice while the lonely and broken gets put in the "tomorrow pile." Whether I agree or disagree with a prosecution, I think what Lanny is advocating is an attempt at mob justice. And, an US Attorney who responds would in my mind be succumbing to mob justice.

    Frankly, I believe and hope Brandon Johnson is ignoring the calls. Justice is to be blind.

  32. larry kurtz 2014.03.09

    I'll bet you are, Troy.

  33. larry kurtz 2014.03.09

    Anyone believing that Marty Jackley is not politically motivated and spying on South Dakotans is delusional.

  34. Jerry 2014.03.09

    @Earl Hanson, that half million is just part of the moolah missing in action. That kind of money could make anyone mourn a little easier.

  35. Lanny V Stricherz 2014.03.12

    Darn, I never got a notification or forgot to click the notify button. I only think that it is appropriate that the public have all the information that is available on the EB-5 investigation, before the primary election, so that if there is wrongdoing uncovered, that the public would be able to have that information before voting. So if there is wrongdoing, Troy and Cory, should that info be kept from the public until after the primary, and then if Rounds is the nominee and implicated in the wrongdoing, it is too late and the election is ceded to the Democrat?

  36. caheidelberger Post author | 2014.03.13

    Lanny, I'm torn. In investigating another U.S. Senate candidate, I have taken the position as an investigative journalist that it is important to expose the malfeasant candidate as soon as possible to prevent that candidate from usurping signatures and campaign donations, enriching herself off campaign contributions, and denying legitimate candidate their fair shot at being elected.

    But a journalist plays a different role from a prosecutor. In general, I am uneasy with the idea of a government official using his position and government resources to influence an election. The EB-5 investigation should proceed according to its own timeline, independent of the election calendar. If Brendan Johnson is still gathering evidence, he should keep quiet until he's done. If he has all the evidence he needs and all the indictments written up but is keeping those indictments locked in his safe until after the primary just for political impact, then we have a problem.

  37. Lanny V Stricherz 2014.03.13

    So, in other words Cory, you don't think that the politician who is term limited, should endorse his lieutenant or a person from his own party for the election. So would the same apply, when a person runs for an office and wins, but then is wanted for another office, so resigns the office for which he was elected to fulfill the other office, such as Dustin Johnson on the PUC and the governor wants him for chief of staff, and then gets to appoint someone who was defeated for another office to fill Dustin's position?

    I have termed politics in SD as incestuous and that is the reason. If I as a citizen cannot ask for release of information so that I (and by default others) can make an informed decision as to how to vote, we don't have democracy. We have totalitarianism, and we get the government we deserve.

  38. grudznick 2014.03.13

    Mr. H, I thought you were a teacher. Do you work for a newspaper now? I would rather you be a teacher there in your new state because you seemed to be a caring one.

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