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Northern Beef Packers: State Gives $4.3M, Gets $3M Tax Boost…

Last updated on 2014.05.22

...Contractor Still Out $2.1 Million; Workers Unpaid

I have frequently cited Scott Waltman's July 2013 summary of the costs of building Northern Beef Packers to discuss how much money that failed EB-5 project made disappear. Dirk Lammers now offers updated figures showing the state lost more than I was saying. His breakdown of the $4.3 million we handed to the now bankrupt and fire-saled plant includes the $2.1 million that then-Governor Mike Rounds hurriedly shoveled toward NBP in his final days as Governor.

  1. $67,600: Future Fund grant to Mentor Group in November 2010 for plant appraisal;
  2. $150,000: Future Fund grant to Aberdeen Development Corporation in December 2010 for economic impact study and marketing;
  3. $1 million: Future Fund grant to Northern Beef Packers in December 2010 for construction costs (actually to fill Richard Benda's golden parachute);
  4. $200,000: Future Fund grant to Brown County in December 2010 for road construction;
  5. $582,000: portion of $843,000 Future Fund grant in January 2011 for workforce training;
  6. $300,000: grant to South Dakota Department of Agriculture in January 2011 for the South Dakota Certified Beef Program (another Rounds failure);
  7. $1.2 million: grant in June 2010 "to provide a conditional loan to Northern Beef Packers for construction costs and employment recruiting";
  8. $845,000: state construction tax refunds.

Lammers's total: $4,344,600.

Now that's a small portion of the $167 million in total investment that Northern Beef Packers made go poof. Neither figure is the $80 million that Senate challenger Jason Ravnsborg offhandedly said during last Saturday's debate that we had lost. Senate candidate Mike Rounds tells Lammers that the state loss figure is actually zero, because NBP generated tax dollars and will generate more tax dollars in the future.

The Governor's Office of Economic Development estimates that Northern Beef would account for at least $3 million in sales and use taxes and contractors excise taxes paid to the state, based on filings made during the bankruptcy proceedings.

Rounds added that he expects that the plant will eventually be processing cattle.

"In essence, the taxpayers of South Dakota did not lose any taxpayer money on the bankruptcy of the Northern Beef plant," Rounds said. "And we still have the plant. It has been built, and it will be operational" [Dirk Lammers, "South Dakota's Help for Northern Beef was About $4.3M," AP via AgWeb, 2014.04.17].

Evidently did not means will not, and balancing a Mike Rounds budget requires a time machine.

Rounds also does not account for the losses suffered by Scott Olson Digging, which is still suing to get the $2.11 million it says NBP (now bankruptcy raiders White Oak/New Angus) owes it for work done in 2007. Rounds does not account for the paychecks that hundreds of NBP workers did not get last year.

Rounds of course is playing word games, as seems his wont. He forgets (check that; he wants us to forget) that had we not poured money into the NBP money pit, we could have invested in other projects that might still be operating and employing hundreds of South Dakotans. Instead, he wasted money on an unsustainable business plan that satisfied his dreams of a legacy on which to run for Senate in 2014.


  1. mhs 2014.04.18

    Pretty sure #7 got repaid. Might want to double-check, Bob Mercer had that in his accounting, I think.

  2. Disgusted Dakotan 2014.04.18

    Mike Rounds brazen dishonesty is down right scary.

    Where is Mercer? Rounds claims he didn't have a deficit, said he only increased state employees by 5-600!? Etc., etc.

    Bosworth commits perjury with Rushmore PAC and Rounds supporter Joel Arends and Mercer, Ellis, Dunsmoor, etc., etc., report on fish in the river!

  3. mike from iowa 2014.04.18

    Figures don't lie,but......

  4. Roger Elgersma 2014.04.18

    When I took business courses the worker always got paid first in a bankruptcy. Did our laws decompose or is this still just flat out illegal. When Dan Nelson car company went broke they bank started a charity fund for the workers. I thought the bank just wanted charity to cover some so they bank could get more.

  5. jerry 2014.04.19

    Fuzzy math and double speak have been the hallmark of republican administrations for decades. Think of Wild Bill and the concrete plant in Rapid City and you can easily see why Rounds and his sidekick Daugaard still do the old smoke and mirror trick. These crooks watched Nixon do it and they figure if a president can do it, is it really against the law? Not in republican politics, that is for sure. Want to notarize your own signature, go ahead and you can become the speaker. Want to jack up foreign investors, go ahead, you are the governor man, who is gonna stop you. If one column of figures is different than the other, no big deal, just tell your lying eyes to believe the former governor. Then simply toss some moolah about and get yourself appointed. As the researchers from Northwestern and Princeton have recently pointed out,
    American democracy is dead man. Maybe, just maybe, this time around, these clever mafioso may get skinned by their own corruption.

  6. Disgusted Dakotan 2014.04.19

    I spoke too soon. Instead of calling Rounds out? Mercer writes a puff piece basically saying Rounds has all those millions, guess we should just accept the purchase of our U.S. Senate seat by East Coast lobbyists.

    Way to lower the bar, Bob!

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