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Rounds’s Glass Jaw: Weiland, Pressler, Howie Hammer EB-5 Policy and Scandal

Last updated on 2014.08.21

The Dakotafest debates are over. The Robinson-Noem tilt was a missed opportunity for the Democratic challenger in the House race, but gubernatorial candidate Susan Wismer and Senate candidate Rick Weiland both did Democrats proud, landing the punches that need to be landed on the Republican frontrunners. And this afternoon, Weiland got help pounding Republican Mike Rounds from his Independent compatriots Larry Pressler and Gordon Howie.

The debates were long and hot and filled with important policy disagreements. I'll get to those, but in this post, let's focus just on the ultimate issue raised in the Senate debate, the EB-5 visa investment program, also known as Mike Rounds's glass jaw.

The question offered was, simply, whether the candidates support continuing the EB-5 program, which has stirred controversy in South Dakota since last October, when we learned of federal investigations into the conduct of Rounds's deceased economic development chief and EB-5 promoter Richard Benda.

Larry Pressler (I)
Larry Pressler (I)

Pressler drew the mic first. Addressing the policy itself, Pressler said he would not be in favor of continuing EB-5 program. As for the brewing scandal in South Dakota, he said we need to investigate the state's execution of the program much more thoroughly.

Demonstrating a mental acumen that was evident throughout the debate and belies any of the insulting Republican talk of a daffy or detached Pressler, the former Senator then offered a new take on the scandal brewing in South Dakota. Pressler said that the South Dakota press is paid such low wages that they can't do real investigative journalism (every editorial page will now turn briefly and angrily against the kindly old statesman). Rounds thus won't be fully vetted unless he becomes Senator. Drawing on his experience in Washington, Pressler said the national press will dig into a newly elected Senator. When they find the connections between Rounds, Benda, Joop Bollen, and the EB-5 monkeyshines, they will tear Rounds up. That national media beating will weaken a Senator Rounds and leave South Dakota with less clout in the Senate, something we cannot afford to lose."We'll have a wounded Senator," said Pressler. "That hurts every person in this room."

With fatherly advice (and Pressler noted that Rounds's father is one of Pressler's best friends), Pressler thus recommended Rounds launch a pre-emptive strike. He called on Rounds to write a "memorandum of fact" explaining to the people of South Dakota everything about his relations with Benda. Pressler said that sitting down for a day and dictating everything he knows about EB-5 for publication would do us all a "great service."

Rick Weiland (D)
Rick Weiland (D)

Rick Weiland then took the mic. Following Rounds's earlier rhetoric in the debate about the Affordable Care Act, Weiland said we need to "repeal and replace" EB-5 with something that doesn't lead to "culture of corruption." Weiland said he was inclined to stick with discussion of the policy and avoid discussing the scandal side, but he said the refusal of the Legislature to subpoena Joop Bollen or even discuss seeking answers from the EB-5 impresario "crossed over the line." "The people of South Dakota are entitled to a real explanation," said Weiland. He said Pressler's new memorandum suggestion might be a good part of that explanation.

Weiland then fit EB-5 into his overarching campaign theme of getting big money out of government. Weiland said EB-5 solicits big money foreigners to buy citizenship. He pointed to Senator Chuck Grassley of Iowa, who fundraised for Rounds in Iowa Saturday but who thinks EB-5 should go away.

Weiland complained that (contrary to Rounds's April SDNA debate assertion) EB-5 has cost South Dakota millions of tax dollars and the life of Richard Benda. EB-5 is "big money going wild," said Weiland. Weiland said that Rounds likes to talk about "South Dakota common sense" (and Rounds used that phrase early and often in the debate). But the EB-5 program, said Weiland, is "so unlike South Dakota." "How much common sense," asked Weiland, is there "in handing Richard Benda that million-dollar check? Whose watch was that on?"

Gordon Howie (I)
Gordon Howie (I)

Then Gordon Howie piled on. He disagreed with Pressler: echoing Democrats, Howie says Rounds should testify under oath as Governor Dennis Daugaard has offered to do. Howie joined in the chorus of late seconds for Rep. Susan Wismer's motion to subpoena Joop Bollen and said the failure of the Legislature to do so exposes a weakness in the SDGOP leadership against who he has rebelled. Howie says the state should release all e-mails among Rounds, Bollen, and Benda, as well as phone records, appointment logs, and other information that would help us understand who did what when and and who knew what when.

"EB-5 fosters crony capitalism and corruption," railed Howie. He repeated that $4.3 million dollars in tax dollars were lost in EB-5 and challenged an audience member who signaled disagreement with Howie's statement of fact. If Rounds deserves vindication, said Howie, we should know that now. But if "authority was misappropriated" (and that's as important a question as whether money was misappropriated), Howie said we need to know that now, too.

Partisans in the crowd cheered all three of those candidates' statements wildly. The big Weiland corps around me cheered Gordon Howie with gusto. (Pundits, pollsters, go ahead, start postulating the Howie draw from Democrats.)

Marion Michael Rounds (R)
Marion Michael Rounds (R)

Then the man taking all this fire took the mic. Rounds opened with a subdued explanation of the mechanics of the program: EB-5 is a federal program, with 500 offices nationwide using it to bring in outside investment.

Rounds said South Dakota "moved it outside" because most other programs operated as private companies. (Rounds did not say whether other states privatized their EB-5 program with no-bid contracts to former state employees looking to boost their personal profits.)

Rounds said EB-5 gives foreigners an opportunity to come to the U.S. if things go badly in their country not as citizens but on visas. That distinction matters only if Rounds is trying to deflate the semantics of critics who say EB-5 buys citizenship, but not if he's trying to defend the idea of buying one's way to the front of the immigration line.

Rounds claimed EB-5 did "over 80 different projects" in South Dakota... which I may have misheard, because I'm aware of only eight dairies, the Huron turkey plant, Northern Beef Packers, a power plant and a casino and maybe a project or two that I've forgotten, not 80. Rounds admitted that two of those projects didn't work because they didn't have enough money. From an economic development standpoint, his administration used EB-5 during the recession to bring more resources to help projects grow. But ultimately, Rounds said, EB-5 was good for South Dakota.

Turning from policy to scandal, Rounds said that if he had known what Benda was doing while he was governor, he would have fired Benda. But Rounds maintains the counterfactual position that South Dakota lost no tax money in EB-5. He repeated his argument that we gained more than we put in thanks to the taxes paid by the EB-5 projects

Rounds ended with a recital of the general facts of Future Fund grant #1434, the million-dollar check he wrote to Northern Beef Packers during the last days of his administration.

He finished with a thank-you for the opportunity to discuss the issue.

There were plenty of Rounds partisans in the audience. None of them cheered. None of them applauded. Rounds's discourse on EB-5 ended in silence.

Remember how a few months back, after the riveting autumn revelations about Benda, Bollen, and the Governor's Office of Economic Development, how EB-5 seemed to fade from the press? I wondered then if the press might just sit back on EB-5 until closer to the general election, when folks would be paying attention, until, perhaps, right before the debates began. Or maybe the candidates would wait until they got the chance to challenge Rounds face to face. Or maybe it would take some new development, say, the Legislature's rank dereliction of duty in refusing to take the logical step of subpoenaing South Dakota's EB-5 director, to snap the press's and the public's patience in seeking answers.

Whatever caused it, at the moment, I think we can say EB-5 is back, big and bad. Rick Weiland, believing he is within striking distance, is adopting a stronger attack on this front. Pressler and Howie very sensibly are focusing their fire on the frontrunner as well. All three are saying things that resonated with half of the Dakotafest debate crowd and left the other half squeamishly quiet.

And in response to this assault, the otherwise feisty and fiery Rounds could only respond with bland, technocratic explanations of things we already know that put no one's doubts to rest.

Weiland, Pressler, Howie, the EB-5 question is Rounds's glass jaw. Keep punching until he answers... or until you win.


  1. 96 Tears 2014.08.20

    YES! Mike Rounds has never had a hard election. He's never had a tough opponent. He's always had others carry him along. Glass jaw? Absolutely!

    I predict he will not participate in the KELO debate, just as he did in the primary. He might drop the other two debates. He should have had a very favorable setting today in Mitchell. It's always been a lay up for Republicans in the past. But with Pressler and Howie there to strip away portions of his support base, the boy was bare-assed naked.

    This guy can be defeated with his Benda/EB-5 Scam. Millions walked out the door and nobody has a record where it all went. The guy in charge was killed by gunshot last fall. No witnesses and a sketchy, secret autopsy report. The other guy who knows some of the answers to questions of possible criminality in the Rounds and Daugaard administrations is being protected by AG Marty Jackley and the GOP Legislative Leadership.

    The entire GOP power structure is under siege and is circling the wagons to protect Mike Rounds and his former cabinet.

    The key to dig further is to go after the cabinet member, other staff and other principles in the public and private sectors who feasted from EB-5. What did they know and when did they know it? What did they do about it, or did they turn their backs while the money walked out the door and into a secret, unregistered bank? And what about the trips abroad and Cayman Island accounts?

    Remember, the Operations & Audit Committee made this a political football. They're playing a game of cover-up. The Attorney General is playing a game of stonewalling. Millions of public money went to unknown places. A man is dead under very mysterious circumstances and his autopsy report, which took a month to produce, is still kept secret.

    What game is the press willing to play? Scribes for the Pierre power clic, or real reporters? There is a Pulitzer story waiting to be produced here. More importantly, the public should not be rewarding a crooked former Governor by making him our new U.S. Senator

  2. Steve Hickey 2014.08.20

    Initially I was interested in EB5 but was satisfied with the audits and developments. Even so I would have supported Wismers effort to issue a subpoena to Joop. Here's where I am now, I'll get interested again in EB5 when Brendan Johnson shows some renewed interest. He has the means and motive to expose anything there. Dems ought to be banging on his door. That he is quiet tells me we've come to the bottom of the matter as it relates to Rounds.

  3. Tim 2014.08.20

    More republican stonewalling Rep. Hickey? Are you an honest man of God, or a republican willing to do what it takes to help protect the state establishment? At some point you may have to make a choice, which will it be?

  4. Steve Hickey 2014.08.20

    I could care less about protecting your so called state establishment. When Brendan Johnson announces there is more to this EB5 scandal than fodder for the politically desperate I'll tune back in.

  5. Paul Seamans 2014.08.20

    I have always liked Larry Pressler, and I even like Gordon Howie, but I think that Rick Weiland is the man for the job.

  6. Tim 2014.08.20

    Spoken like a true republican, not interested in seeking the truth, willing to wait for somebody else to do the work. Correct me if I'm wrong, you are a elected state republican representative, so I think that makes it your so called establishment.

  7. Kurt Evans 2014.08.20

    Cory Heidelberger wrote:
    >"[Rounds] repeated his argument that we gained more than we put in thanks to the taxes paid by the EB-5 projects."

    As if all the people whose hard work on those projects generated the tax dollars in question would have been sitting on the couch watching TV without EB-5 ...

    Rounds is promoting an extremely anti-libertarian understanding of economics.

  8. grudznick 2014.08.20

    I, for one, was just glad that Mr. Howie didn't make his god part of every conversation. I liked how Mr. Pressler kept his dress shirt cuffs buttoned like the gentleman he is, instead of rolling them up and pretending to be a real working man like the other three did. Mr. Weiland did not play his banjo or sing, and since I missed that famous Rickfest I was hoping for some of that so I could enjoy what you all castigated me over. Mr. Rounds seemed to have trimmed his eyebrows a bit oddly before the speeches and I thought he drank an unusual amount of water.

    All in all, the overgodding Mr. Howie won todays discussion.

  9. Tim 2014.08.20

    Kurt, the only economics Rounds and the rest of his group understands, is the part that fills their coffers. There is no doubt Rounds and his friends gained more than they put in, the rest of us, not so much.

  10. Steve Sibson 2014.08.20

    "I have always liked Larry Pressler, and I even like Gordon Howie, but I think that Rick Weiland is the man for the job."

    Cory, good reporting! The only part missing is that Howie is the only candidate with the solution. Big government liberalism is the source of the problem.

  11. grudznick 2014.08.20

    Mr. Sibby, please reshare your budget analysis of Mr. Rounds' tenure where you shot holes in all the math. People here would do good by reading it. But you are wrong about Mr. Howie, and I sent you yet another complaint paper about him I want you to turn your analyzing skills toward. I want you to focus on it early in the morning before your attention scattering begins and I want you to do it without praying. Can you do that for us, Mr. Sibby? It would be a service many here would appreciate.

  12. Lynn 2014.08.20

    Both Susan Wismer and Rick Weiland did an excellent job today in the debates. I'm ready to volunteer!

  13. Disgusted Dakotan 2014.08.20

    Rep Hickey, it is common knowledge that U.S. Attorney Brandon Johnson has long ago recused himself from the ongoing federal investigation into the identified corruption in the running of the EB5 visa program here in SD.

    Let us get this straight.. Establishment Republicans: Tens of millions of dollars missing, boxes of state records taken and withheld by Joop Bollen, state investigative records into the mysterious death of the former Secretary of GOED sealed on a contrived family privacy claim, etc., etc = "fodder for the politically desperate"

    YET, you go out of your way to be outspoken and unmerciful in your repeated indictment and conviction of Annette Bosworth (who has obvious and medically documented mental health issues), on less?

    Double set of standards or selective outrage over obvious misconduct?

    @Tim There were conservative Republican legislators who officially expressed concerns about the EB5 corruption. Sadly, it appears that SD establishment Republicans are as bad as establishment DC Democrats when it comes to turning a blind eye for political purposes.

  14. Lynn 2014.08.20

    Do I contact state Dem Headquarters or divide my time between the two campaigns?

  15. owen reitzel 2014.08.20

    i was at the senate debate and one's thing for sure. In watching Rounds I saw a man who is thin skin and looks like he has a temper. I'd like to see Rick go one-on-one with Rounds.
    Pressler did well and I'll even give credit to Howie. I disagree with pretty much everything Howie stands for but he did ok and he did a good job calling out Rounds on the EB-5 scandal. We had a good civil discussion after the debate as well.

  16. lesliengland 2014.08.20

    "silence." daugaard already pointing at rounds to save himself.

    whether johnson or jackley have anything incriminating in this complex set of facts, i think our debate coach has sown the seeds for a weiland/wismer ad to connect and sell voters on "kicking the bums out". johnson may now have an ethical quandary similar to the jackly/gant/haber debacle. the autopsy mis-focus is still likely a deadend, however. these races have become winnable for us. thankyou cory.

  17. owen reitzel 2014.08.20

    I didn't get a chance to ask Gordon but my question for him and Rounds is what programs do they want to cut to balance the budget? Farm programs, oil subsidies, military....etc?
    How about being specific

  18. Lynn 2014.08.20

    Owen Gordon Howie did a great job attacking Rounds. Larry Pressler was more softspoken with the "memorandum of fact" which was great!

  19. Tim 2014.08.20

    Owen, do you think if somebody was to poke that thin skin, Rounds head would explode for all to see on teevee? Maybe he opens his mouth wide and inserts both feet at the same time? Or does he pull out of the remaining debates and try to run out the clock? From what I have read at several places, sounds like he was a bit uncomfortable today.

  20. Lynn 2014.08.20

    Did any of you follow the tweet feeds from the Argus Leader today during the debate? The Rhino Mike and Flyover Country tweets were pretty funny.

    When the debate was over Flyover Country posted a photo with cars leaving and Round's Grassroots express luxury motorhome trying to move into the traffic flow. Flyover typed that Rounds was probably yelling to his driver to hurry and get the hell out of here! It was a great tweet!

  21. Lynn 2014.08.20

    Sorry I mean't Flyover Wire

  22. 96 Tears 2014.08.20

    Owen and Tim,

    Interesting observation and question regarding Rounds' tense body language and manners. Mike likes to give an exterior image of cool calmness and affability. Yet the people around him seem to run a very tight ship. He also exhibits a sense of royal entitlement, which is mystifying. He was raised in a large family that would have floundered without his dad's state government paycheck in the transportation department. Government is the well spring that nourishes the Rounds family, from Don's career with the state and then as an oil lobbyists to Mike and his family members. His sister was an oil lobbyist and her husband was a government rep for corporations lobbying to mine uranium. Mike gave his brother Jamie the job of heading the Governor's Office of Economic Development before Mike hired Richard Benda for that position. Jamie landed a job later at the University of South Dakota. His other brothers got favorable legislation, thanks to Mike's influence, to start a vodka distilling business in South Dakota. They also benefited from state contracts while Mike was King. And so on and so on and so on.

    Sucking on the government nipple is all these people know. So when the opportunity came up to jimmy the system to use public money through EB-5 to create a secret bank to fill the pockets of pals and their ventures, Mike thought nothing of abusing state government to take what he wanted. Keep in mind, Mike led the Senate charge to pass the state gag law to put anybody in jail who would tell tales from inside state government. What could go wrong?

    The fly in the ointment was the criminality of the Rounds administration, this absurd sense of self-entitlement, spread to those Mike hired in his administration. Criminal thinking is flawed thinking. People who engage in it think they are invisible and invincible, and they are if nobody says anything.

    Again, this is why I say stop aiming at only Rounds, Daugaard and Jackley. Sveen is a good target. But think lower down the chain of command.

    This is why I find Steve Hickey's whitewash attempt so insulting. If you've worked in a government setting, you would know that the chain of command in a Governor's office is tight. Information is currency. When Mike Rounds said today "if I had known ... I would have fired him," he lets the cat out of the bag. Whose job was it to know and why didn't they know it? Who wrote that check for $1 million to Benda and who gave it to him? Who was in charge of overseeing the transfers of millions of dollars in this program? Where are their reports to Rounds, his chief of staff and others who needed to know (ag secretary Larry Gabriel seemed to have been a player in the mega dairies and the Aberdeen slaughterhouse)? What is the auditing process for the administration and what did Rounds' budget czar Jason Dilges do to make sure millions were not being misused?

    Folks, if this is only going to be about Rounds, Daugaard and Jackley, you're going to get the Sgt. Schultz laughline until after the election. Dig a little deeper. Find out who were the players and find out what they are doing now.

  23. Nick Nemec 2014.08.20

    Rep. Hickey, it's common practice and maybe even official Justice Department policy for US Attorneys to make no comments about ongoing investigations unless and until there is an indictment. That US Attorney Johnson has issued no statements on the EB-5 affair other than to confirm his office is investigating is standard procedure and should not be interpreted one way or the other.

  24. Roger Cornelius 2014.08.20

    I haven't seen the debates yet, but will look for them.

    Thanks Gordon for doing a good job on Rounds

    We have all read and heard about the state grant money that was given to NBP and have a pretty good idea of where it went.
    For sometime now, I have been wondering where that $170 million of foreign investment money went. Was that account ever audited?
    Mike Rounds said today that NBP was basically under financed and that being the cause of the failure. I ask you,
    how does a business fail that has had a cash injection of $4.5 million in state taxpayer and an additional $170 million of Chinese investments.
    It happens because of no-bid unmonitored contracts, lawyers and consultants, and flat out skimming off the top.
    Excuse me, who in the hell runs a business in that manner and expects success?
    I still believe that there is a money trail leads right to GOP candidates, that is why we call it crony capitalism and why we are consistently ranked in the top ten of most corrupt states.
    I'm ecstatic with Rick's performance today, he is getting some serious attention and raising questions that need to be answered.

  25. Roger Cornelius 2014.08.20

    I got an email from the Democratic National Committee soliciting my monthly donation, I sent them an email that said in effect that if Harry Reid will not financially support Rick, or at least shut his pie hole, no more donations.

    We have state Democratic candidates that aren't getting any support, financial or otherwise, from the SDDP. If Democrats want to be elected, directly support the candidates.

    Two candidates come to mind, Elle Spawn for District 12 representative and Robin Page for District 32 senate could use your financial help.

  26. Jenny 2014.08.21

    Just the body language in the photo here of Rounds shows a tense man with his hands clasped. A gesture like this means frustration, anxiety and his face shows a slight discouraged frown. He won't go to anymore debates from the look of his body language here. He didn't like the humiliation and he's ticked. Thank goodness he can get back to his safe campaign people after this.

  27. caheidelberger Post author | 2014.08.21

    Jenny, you should have seen the body language when Rounds repeated that false claim about the ACA taking $700B+ from seniors on Medicare and members of the audience, myself included, shouted, "Lie! Lie! Lie!" More on that in an upcoming post.

  28. caheidelberger Post author | 2014.08.21

    Roger, the total investment, public and private, that NBP made disappear was $167 million, and yes, it is darned curious that we haven't had a full accounting of where all that money went. The audits did not touch that figure, because Daugaard et al. refuse to demand the books from Northern Beef Packers, because private records are sacrosanct.

    Rounds's assertion that NBP and the Veblen Dairies failed because they didn't have enough money is peculiar and debatable. It opens up the very question you pose: how can we know if NBP was simply underfinanced or if it actually wasted money and diverted EB-5 investments and tax dollars to private pockets (as happened with the incredible $550,000 Richard Benda diverted for the service of monitoring one company's loans. That question is crucial.

    Mike's defense of NBP as underfinanced sounds like Chad Haber's finances. You have a doctor able to make bank, plus you take $200,000 loan from a friend that you never pay back, and still you have to sell your house and lose three other properties to foreclosure? You had plenty of money; where the heck did it all go?

  29. Jenny 2014.08.21

    Cory, is this debate available online anywhere? I'd love to watch it.

  30. Lynn 2014.08.21

    Roger I have never been a fan of Harry Reid being in any leadership position. This could actually be an opportunity for Rick to show his independence from Harry Reid and show he will work for ALL of South Dakotans. The Republican Party may try to spin it as Rick being a Harry Reid drone in the Senate but what has happened proves otherwise.

  31. advocate 2014.08.21

    I thought Rick came off as a really capable, articulate candidate. What a miscalculation by Harry Reid - great candidate, vulnerable opposition. Not a smart move by the national Dems.

  32. bearcreekbat 2014.08.21

    I did not suspect that the eb-5 concern could get such interesting legs. It will be interesting to see if it can continue to gain momentum.

  33. Jenny 2014.08.21

    Thanks Lynn, I am looking forward to watching it tonight.

  34. lesliengland 2014.08.21

    Shouting ‘Liar’ in a Crowded Congress
    James Joyner · Thursday, September 10, 2009 · 139 Comments

    idiot bill o'riely just called a ferguson witness one too. (shakes head)

  35. Roger Cornelius 2014.08.21

    Good point about Harry Reid. I have bee posting as often that I can that Rick not taking PAC money, including Reid and big business, is a part of Rick Weiland's promise to South Dakota voters.
    When Rick is elected to the senate, he won't be beholden to Harry Reid, unlike Mike Rounds who will be in political debt to PAC's and big business that don't represent South Dakota. They will own his very soul, if he has one.

  36. JeniW 2014.08.22

    I wonder if the Rounds-Daugaard-Jackley team is maybe starting to sweat a little knowing that they may not be able to as easily take SD voters granted?

  37. caheidelberger Post author | 2014.08.22

    Maybe they'll be wishing they hadn't backed off that nine-million-dollar fundraising goal? They're going to need it.

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