Tea Party Blog Takes a Swing at Rounds on EB-5

Multiple eager readers have forwarded me this article by Paul Shannon of the Tea Party Tribune, who promises a multi-article exposé of M. Michael Rounds's incompetence or complicity with respect to the GOED/EB-5 scandal. Shannon launches his series by grasping at three strands of the scandal: bad business at the EB-5-funded Dakota Provisions turkey plant in Huron, secrecy in the Governor's Office of Economic Development, and suspicions about the state's investigation of Richard Benda's death.

Dakota Provisions was launched to process turkeys from Hutterite colony growers. Bob Mercer drew connections last November between Dakota Provisions chairman Jeffrey Sveen and the EB-5 program. The turkey plant has been kept afloat by three rounds of EB-5 visa investment totaling perhaps over $90 million, some of which was redirected to other South Dakota EB-5 projects, including the doomed Northern Beef Packers. Sveen has helped EB-5 impresario Joop Bollen recruit Chinese investors and structure his byzantine EB-5 business entities.

Shannon produces a February 5, 2011, letter from Jake Wipf of the Oaklane Hutterite Colony to the Dakota Provisions board complaining that the board is shorting the colonies. The Wipf letter claims that colonies not selling to Dakota Provisions were making a profit on their birds, while colonies dealing with Dakota Provisions were taking a loss. The Wipf letter says that instead of offering dividends that benefit non-producer investors, Dakota Provisions ought to pay producers better prices. This letter does not mention EB-5, but it perhaps adds to the groundwork laid by Mercer's reporting to see Sveen and Bollen's EB-5 projects as an exploitative money-making scheme.

Shannon then produces an excerpt from a state response to a Freedom of Information Act request. The state (and Shannon does not clarify which agency or agent is responding, to whom, or for what) says that it is not subject to FOIA. Shannon takes umbrage... but Shannon gets a bit distracted here. FOIA is not the issue. FOIA does not apply to state agencies. And Shannon admits that, in this case, the state still released the information requested. Work with me, Paul: there are plenty of other ways to show that GOED and other state officials are working hard to keep information about EB-5 out of our hands.

Shannon gets back on the trail by criticizing Attorney General Marty Jackley's resistance to releasing records from his investigation of former GOED chief Richard Benda's suspicious death. The Attorney General's slow investigation of Benda's apparent suicide, as well as his subsequent unwillingness to share the evidence that he says led him to the conclusion that there was no foul play in this case of enormous public interest, do leave a distasteful and distracting suspicion in the minds of almost every South Dakotan following this story.

Shannon has a lot of work to do to tie these three strands into a strong rope with which to pull down M. Michael Rounds. This first article doesn't add to our understanding of Rounds's involvement in EB-5. In general, I view the pronouncements of the Tea Party Tribune on South Dakota politics with skepticism. After all, these are folks who think that the Aberdeen newspaper is called the Times and that microphone-challenged political novice Jason Ravnsborg is the best candidate to challenge Mike Rounds and Rick Weiland.

That said, I'm glad to have more eyes on the GOED/EB-5 story. The more people watching and reading, the more chance we'll discover the big picture, and the more Mike Rounds will have to answer our questions about what went wrong with GOED and EB-5. I look forward to Shannon's further efforts to connect the dots.

Update 09:05 CDT: Ask and ye shall receive! Shannon has posted Part 2, looking more closely at the financing of Dakota Provisions.