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.
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 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?"
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.)
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.