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Daugaard, Noem, Johnson, Thune Complicit in EB-5 Wind Farm Scheme

Last updated on 2014.07.14

Jonathan Ellis has a treasure trove of documents from the U.S. Customs and Immigrations Service exposing the corruption in South Dakota's EB-5 visa investment program. Last week Ellis found the connection between EB-5 and Keystone XL. Yesterday, Ellis revealed similar EB-5 abuses related to Iberdrola's South Dakota wind farm.

SDRC Inc., the private company the Rounds and Daugaard Administrations contracted to run EB-5 in South Dakota from 2009 to 2013, wanted to turn Iberdrola's Buffalo Ridge II project in Brookings and Deuel counties into their next big money-making project. SDRC Inc. exec Joop Bollen and state economic development chief Richard Benda had lined up 200 Chinese investors. But Iberdrola completed the project by 2010, without any EB-5 money. Bollen and Benda were trying to get EB-5 money as a reimbursement for Iberdrola, showing that, much like with TransCanada and Keystone XL, Bollen and Benda weren't using their authority to promote new economic development; they were simply looking for ways to draw big commissions for themselves and their pals by making EB-5 investments happen, regardless of necessity.

Ellis reports that USCIS sensibly rejected the EB-5 request for Iberdrola's finished project. But Bollen kept pressing for his profit... and he got South Dakota's biggest politicos, Republican and Demcorat, to back him:

When U.S. Citizenship and Immigration Services delayed its decision on whether the project would qualify, SDRC's founder, Joop Bollen, appealed to the state's highest elected leaders to intervene. The offices of Sens. Tim Johnson, John Thune, Rep. Kristi Noem and Daugaard responded with a letter signed by all of them asking the federal agency to review the denials it had rendered to the green-card-seeking investors.

Meanwhile, Bollen sent a memo to the investors of the project begging them not to withdraw their money, telling them repeatedly that South Dakota's "political powers" were working on their behalf.

"I can assure you," Bollen's memo said, "that the SDRC and your attorneys, together with the state of South Dakota's governor and its senators will press for and succeed in overcoming the USCIS' erroneous denial and achieve the desired approval of all your cases."

Bollen's memo badly overstated the situation. U.S. Citizenship and Immigration Services did not reverse its denial. Many of the investors in the project withdrew their money or were redirected to other EB-5 projects sponsored by SDRC. About two dozen of them moved their money to the Northern Beef Packers project, where they lost their investments after the plant declared bankruptcy last year [Jonathan Ellis, "S.D. Political Muscle Was Tapped to Intercede for EB-5," that Sioux Falls paper, 2014.04.27].

We have Bollen trading on the authority of South Dakota's elected officials to cling to his profit-making scheme. And we have our Governor, our Congresswoman, and both of our Senators playing along.

Senator Johnson is already stepping down. Senator Thune doesn't face the voters until 2016. But we have the opportunity to fire Rep. Noem and Governor Daugaard for their complicity in the EB-5 abuse of power right now.

* * *

Your investment is safe, your achieving the green card is within reach, and the joint efforts of SDRC, Hanul Professional Law, the state of South Dakota, and its political delegation in Washington, D.C. are being marshaled to achieve victory and success on your behalf [Joop Bollen, memo to Iberdrola investors, quoted in Ellis, 2014.04.27].


  1. advocate 2014.04.28

    It's not an issue of "big government"; rather, who does your government work for?

  2. Jerry 2014.04.28

    Good point about a clean sweep of this crony corruption that we have been saddled with from all of our elected officials. We need to put all parties on notice that the corruption must stop and that should be the platform all candidates run on. This conservative, liberal nonsense speak is just a cover to keep the status quo. We must have clean government and demand it.

  3. David Newquist 2014.04.28

    A week before Richard Benda's death, the USCIS issued a fraud warning to potential EB-5 investors:

    A big question is raised by the fact that Iberdrola projects were funded. Attempts to horn in on those projects do not appear to meet the conditions specified for EB-5 investments. Iberdrola did not need the money and completed its project without it. There seems no record of what interest or return provisions were offered investors. They know that the investment is a risk, but nevertheless it is customary to offer in writing some kind of prospectus on expected returns. And one wonders what information the elected-interveners were operating on. The USCIS states that the SEC monitors these matters. Still, there is no word about federal investigations by whom and into what. Given this story, it does put one on edge about why federal news is not forthcoming.

  4. caheidelberger Post author | 2014.04.28

    Advocate, you make a good point. My point on EB-5 has never been the call for bigger government that the SDGOP wants you to believe defines the Democratic Party. EB-5 is an example of government getting too involved, of creating a program that gives schemers like Bollen and Benda too much opportunity to leverage government authority for personal gain. And here we have a stunning example of three elected Republicans and one elected Democrat using their clout to help that corruption.

    The EB-5 scandal crosses party lines. It needs to be investigated. It needs to be stopped. And everyone involved needs to be held accountable.

  5. caheidelberger Post author | 2014.04.28

    David, on no forthcoming news on the federal investigations: should we be on edge because that silence suggests more is coming or because it suggests that the powers that be on both sides are trying to shut down the investigations and protect themselves?

  6. Curt 2014.04.28

    So the plot thickens. SDRC was enlisting the assistance of the state's chief politicos to act on behalf of SDRC to deliver for its clients. USCIS examined the application and appeals and denied SDRC's request. All of that appears to me to be nothing more than each actor in this tragedy acting in its proper role.
    The fishy stuff comes in when the state and federal legal beagles start applying pressure to SDRC principals and one of them ends up DOA in a shelterbelt. It's just a hunch on my part that the hunting accident had nothing to do with any wind farm. The whole mess IMO is related primarily to the demise of NBP in Aberdeen. The sad fact, however, is that we are all limited to acting on our hunches until facts are fully disclosed to everyone. Even sadder is that SD voters are forced to decide on the political future of some of the actors without the benefit of info turned up by those investigations. The question becomes this: Are you satisfied that Person X, Y, or Z is a candidate worthy of your faith and trust? Because that seems to be what they are banking on: "Trust Me."

  7. David Newquist 2014.04.28

    Cory, the latter possibility. And if so, would cause huge disappointments.

  8. Les 2014.04.28

    Is it conceivable that SD has anything to big to fail besides it's banking industry? That thought would lead me to believe, they are somehow involved if this just goes away as a possibility Newquist suggests.

  9. Winston 2014.04.28

    Interesting, as soon as Berez left the USCIS in January of 2009, Bollen lost his control over the USCIS, obviously. Sure, he had Berez working for him in South Dakota and China under the auspices of the SDRC after January of 2009, but with the "Architect" of the Bush43 EB5 program no longer in control, their financial scheme began to hit a brick wall under the new Obama administration, didn't it?….. Like I have blogged multiple times, the 800 pound gorilla in the room with this EB5 scandal is not Benda, nor the circumstances surrounding his death, nor Bollen, nor the Caymen Islands, or NBP, rather its Benez and when I ask, when will the State Government Operations and Audit Committee realize it is time to subpoena him, and when will the fourth estate in South Dakota begin to track him down for questioning and reporting as well….. When?

  10. Lanny V Stricherz 2014.04.28

    Hell Winston, When Kathy Tyler wanted to set up a legislative investigation last December, before the session started, she was dumped on like an old garbage heap. THen when the legislature finally did get around to EB-5 on the last week of the session, not even a suggestion of a subpoena to Bollen. How in the world are we ever going to get the truth on this whole thing unless as David and Cory suggest, we get if from the feds? And I might add, we need it before the primary elections.

    It is amazing to see this come out the day after the Democrats honored Johnson for his longevity in Congress. I personally think that other than a few vets issues and a little help to farmers, he has been a go along to get along worthless person in DC, so much like what we see from all over the US today, party first, State second and Country last, if at all. His part in overturning Glass Steagall, his votes on the wars and on the tax cuts, to me say we could just as easily have sent a cardboard Timmy to DC and saved ourselves the salary and huge pension to say nothing of great healthcare for the rest of his life that he will get for nothing,

  11. Lanny V Stricherz 2014.04.28

    I might add, that Kathy Tyler had posted on her blog yesterday her meetings for the week and she mentioned meeting with the Coddington County Dems. The most questions and first issue was EB-5. We need to keep pumping that issue and get the truth out so that we don't end up sending either of two Republicans, complicit in EB-5 to DC, Rounds and Rhoden.

  12. Roger Cornelius 2014.04.28

    I'm inclined to give Noem, Thune (did I say that) and Johnson some wiggle room on this. Generally these letters of support are pretty vague as to specifics of a request and are routinely signed by congressional representatives.
    In 2009-2011 there was little known what an explosive scandal was really all about.
    Daugaard likely knew the depths of EB-5 and all that was going on with the scandal. Is it likely that Daugaard misrepresented to our congressional leaders the true details of what they were supporting?

  13. lesliengland 2014.04.28

    tim earned his health care (like most of us used to have that privilege) and he has a battle injury to show for his effort.

  14. Joelie Hicks 2014.04.28

    who was the rep. from Iberdrola? i need to know.

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