Faced with criticism of GOP Senate candidate Mike Rounds's failed Northern Beef Packers plan and his administration's use and abuse of the federal EB-5 visa investment program, the South Dakota Republican Party responded last week with the claim that "The EB-5 program has brought more than $600 million in private capital investment to South Dakota creating more than 5,000 jobs."
Let's look for those more than 5,000 jobs.
Governor Mike Rounds got South Dakota into EB-5 investor recruitment in 2004. Governor Dennis Daugaard put EB-5 recruitment on hold in South Dakota in 2013, when he canceled the state's contract with Rounds's pal Joop Bollen to run the program. so to get a sense of how many jobs our use of EB-5 may have created, it would seem logical to compare employment figures from 2003 and 2013.
According to the South Dakota Department of Labor, the number of jobs in South Dakota grew from a 2003 average of 408,090 to a 2013 average of 431,260. That's 23,170 more jobs, 5.7% more over 10 years. During that same period, South Dakota's population increased by 10.6%, with 81,148 more South Dakotans.
Of course, by no stretch of the imagination did all of those jobs come from the dairies and other projects funded by EB-5 money. So let's at least try to narrow down the new jobs by the location of EB-5 projects.
To identify businesses funded by EB-5 money, I turn to Emily Arthur-Richardt's seminal 2007 "Green Cards for Sale" article, which lists the big dairies that Rounds and his Governor's Office of Economic Development favored with EB-5 money during the first few years of the program, and GOED's own 2013 EB-5 report, which lists Northern Beef Packers, Dakota Provisions, the Basin Electric Deer Creek station, the NextEra wind farm, and the Deadwood Mountain Grand Casino as EB-5 projects. I'm leaving out the Vendrig Dairy, because that Kingsbury County project appears not to have launched, as well as Jersey Dairy of Union County, which does not appear to exist.
Let's look at the 2003 and 2013 job counts for the counties in which those projects are located. This comparison is far from perfect, because, as with the entire state, it seems unlikely that every new job in, say, Lake County, was created directly or indirectly by the Swier Dairy. But this comparison also leaves out indirect jobs that may have been created in neighboring counties, such as a gas station in Belle Fourche hiring more cashiers to take care of all the gamblers from North Dakota zooming down to Ron Wheeler's big new casino in Deadwood. So those two errors will cancel each other out to some extent.
| County | Business | Jobs 2003 | Jobs 2013 | change |
| Beadle | Dakota Provisions | 8,690 | 9,580 | 890 |
| Brookings | Basin Electric—Deer Creek; Global Dairy | 17,005 | 18,185 | 1,180 |
| Brown | NBP | 19,800 | 20,700 | 900 |
| Clark | Winter Dairy | 1,835 | 1,905 | 70 |
| Day | NextEra wind farm | 2,920 | 2,660 | -260 |
| Hamlin | Drumgoon Dairy | 2,710 | 2,820 | 110 |
| Kingsbury | Wilma Farms | 3,020 | 3,015 | -5 |
| Lake | Swier Dairy | 6,390 | 6,430 | 40 |
| Lawrence | Deadwood Mountain Grand | 12,095 | 12,355 | 260 |
| Marshall | Veblen Dairies | 2,010 | 2,125 | 115 |
| McCook | Van Winkle Dairy | 2,865 | 2,635 | -230 |
| Moody | Moody County Dairy | 3,675 | 3,700 | 25 |
| Turner | K&K Dairy | 4,470 | 4,130 | -340 |
| total | 87,485 | 90,240 | 2,755 |
Wow: Brown County still came out ahead, despite Northern Beef Packers collapsing after just nine months and laying off around 400 people.
I readily acknowledge that I'm offering assumptions on stilts. But I'm still beating the SDGOP, which so far has offered no data to explain where it gets "more than 5,000 jobs" from EB-5 projects.
And if we get up on my stilts, which I say are being pretty generous to the effort to attribute job growth to places where the state used EB-5 to fund business growth, we find 2,755 more jobs after ten years of EB-5 activity. That job growth is 3.1%, less than the contemporaneous statewide job growth rate.
"More than 5,000 jobs"? I don't think so, Mike.
ounds did not refer to the investigations but defended the state’s use of the EB-5 program, saying it helped him create 28,000 jobs as governor. No taxpayer money was lost, he said.
Flyoverwire-April14,2014
Name three things Mike Rounds did as Governor that you could call a unique accomplishment (presiding over weather events is not an accomplishment) that improved our state. How about two things. One thing?
Apparently, we're going to see a lot more of these overblown claims because Mike accomplished little as Governor except to cook up crooked schemes to fill the pockets of family, pals and cronies.
Why is Mike Rounds smiling? Your data show about a 3% increase in jobs. Nationally, jobs increased by about 5% during the period. http://en.wikipedia.org/wiki/Jobs_created_during_U.S._presidential_terms
96 Imagine what Rounds will be like as a US Senator. He will be an empty suit taking care of his cronies, family and corporate sponsors similar to Kristi Noem. Meanwhile the rest of South Dakotans will be absent any representation.
Cory: curious whether the French cheese factory is reliant on dairies financed this way and if it could be touted by the Rounds/Daugaard camp adding to the numbers.
Lynn - No doubt Rounds will set new standards for slack results and taking advantage of every legal and illegal perk of the office, just as he did as Governor (state airplane, how soon we forget). He's going to have to work hard at being the biggest congressional deadbeat. Kristi's got a pretty running start:
https://madvilletimes.com/2014/04/noem-working-hard-at-great-wall-of-china/
If EB 5 was such a great job creator why did current Gov. Daugaard cancel it in September of 2013? One problem surely wouldn't scare off a Gov. in regards to a fantastic job creating mechanism, would it? I don't believe former Gov. Rounds has a choice but to embrace it. His Govenorship is wrapped around it. He does however, have a choice in being thruthful about the numbers. It seems accuracy is just not his forte.
Tyler news conference:
http://www.argusleader.com/story/news/politics/2014/09/08/eb-5-news-conference/15285971/
Larry thank you for the link to the presser! It was a good presser and raises more questions.
I really appreciate Rep. Kathy Tyler's persistence on EB-5 and hope she is not blocked in the executive committee from moving this forward.
Here's Monty's story:
http://www.argusleader.com/story/davidmontgomery/2014/09/08/south-dakota-eb5/15293521/
If I heard right, the accusation is that a state employee (Bollen) created a company and contracted with it (basically himself) while continuing to draw salary from the state.
So he was basically paying himself privately through the contracting office where he was employed. i.e. making money both as a public employee and as contractor, having essentially awarded a state contract to himself. Is that correct?
And did I also hear they then Governor Rounds is on record as knowing about it? Does that happen much? Is it legal? Ethical?
Was Montgomery awake during the presser? Thank God there is video camera rolling so people have a chance to learn what happened without the Mitch Krebs filter!
The link Bill provides fails to mention Gov. Mike Rounds key role or the accusation of $140 million in fraud, both of which Rep. Kathy Tyler mentioned several times.
This is the problem with the Argus' reporting on this issue since October. They seem very reluctant to link Mike Rounds to the scam when Rounds is in the center of it. Piss poor reporting.
Note to Tara Volesky: This is how a professional politician manages a press conference. She was direct with her facts and stayed on topic the whole 25. She emphasized her findings several timings to gain the proper attention.
Montgomery failed in his first report to highlight the $140 million fraud perpetuated by Bollen and Rounds, hopefully he will provide a better report.
Cory does this fit your own timeline or add to it in respect to the contracts signed by Bollen and others?
Kathy's presser today and your reposting Sibson's article are providing documented evidence of the lies and distortions perpetuated by Rounds, Daugaards, and apologist Troy Jones.
Sorry, I'm not getting how the $140 million was fraud. Help me out here. Who was defrauded? I'm not sure even Tyler made that clear.
They aren't sure yet, Bill, right? Monty seems to suspect some politics afoot in $140 million number.
EB-5 is all you got on Mike Rounds.
You realize that if the US Attorney has anything on Mike Rounds - You know the attorney appointed by the current president and son of the guy keeping the seat warm for Rounds - he would probably have done something by now, or not?
Finally Cory, its good to see you are using good sources - my wife - in your blog. I am thinking she should get some sort of royalties or something :)
"EB-5 is all you got on Mike Rounds."
Wow. That is the worst attempt to wave away the issue at hand since "Aside from that, Mrs. Lincoln, how did you enjoy the play?"
DR - You're not paying attention. Rapid City attorney Patrick Duffy put your theory about the federal investigation to rest at the beginning of his presser Aug. 22 in Sioux Falls:
"First of all I would like to put one idea to rest, or to bed, and that is some journalists have written or have said that we would have some sort of October surprise. That we will see indictments in this case before South Dakota voters go to the polling booth. I want to assure that that cannot possibly happen.
"Many of you already know this that Brendan Johnson is strictly forbidden from taking any actions at all that might influence an election. Prosecutors cannot take steps to influence elections. Prosecutors cannot reveal what their grand jury is doing."
Whoever told you that was wrong. They would also be wrong that Brendan Johnson would officiate the investigation as U.S. Justice Department policy requires the case would be handled by Justice Department officials from outside South Dakota who would not have the appearance of a conflict of interest.
As to "all you got on Mike Rounds," there is a litany of material which has appeared in the news, in blogs and elsewhere over the years that demonstrate a central corruption in Rounds and his inner circle. Until Oct. 22, nobody knew the corruption was this deep and wide, but when you look at the string of abuses of his office, nobody should be surprised.
Larry, I'd have to watch it again to see how that $140M number gets put together. From listening to it on the fly, it sounds like there may have been some hefty admin fees collected by the State before the office got "privatized." And after that, those fees (which would otherwise have gone into State coffers) went to Bollen instead. But I also thought I heard Tyler say that nobody knows for sure about any fees "before the privatization (presumably because Bollen took all the records?)
I'm sure there will be more well documented detail on this coming up from other sources. And I certainly don't want to add to the confusion. Just trying to capsulize what I thought I heard.
DR, the failure of Northern Beef Packers, the inattention to Bollen and Benda and GOED details, and EB-5 are only the best, most emblematic examples of Rounds's fecklessness. Your problem is that you don't have anything good on Rounds. His legacy is zilch. He achieved nothing.
And he sure as heck didn't achieve "more than 5,000 jobs" with EB-5.
Larry, the Bel Brands factory is in Brookings, so if it has created any jobs, it's already included in my data above. But it's not open yet, is it?
By the way, I just got home from work. I will be reviewing Rep. Tyler's performance in detail this evening.
This is the first time the SDDP is putting together an investigation on EB-5(that I am aware of). Why? B/c their candidate may be lucky to get 2nd place. How many investigations have the SD Republican lead legislature put on the FEDERALLY Run EB5 Program. The number is 4. Actually it was 5 but the dems didn't like one so they through that out.
The EB5 program is federally run. The states have nothing to do with this. And really the only thing Rounds should have been in control of was the 5,000 Benda embezzled from the state on travel vouchers.
Cory, do you believe that A). This investigation will prevent Rounds from winning and B). Do you think any sort of charges will come of this?
Finally, and be honest here Cory, you are a smart guy, do you think Rounds is going to lose?
@ArgusMontgomery 2m
Many were in a records request filed by attorney Steve Sandven. All had been reported by some combo of myself, @pierremercer & @coralhei.
DB - The only thing Mike Rounds is worth of winning is a chance to spill what he knows in front of a federal grand jury.
DR, be careful when drinking the republican kool-aid, I hear that stuff can be dangerous.
Did Ms. Tyler lie like Mr. Weiland did...er...exaggerate...er...politically and incorrectly state things that are inaccurate even if they know....er...did she say "sell citizenship to the highest bidder?"
$140,000,015?
That is probably more than all of that crazy lottery stuff nets us and we could abolish that heinous tax on stupid people if we were to engage in more E-B5!!!
DR, you're asking the wrong question. The issue here is not whether Rounds will lose. It is whether he deserves to be trusted with any public office given the magnitude of the fraud perpetrated in Northern Beef Packers and EB-5. I'll report the facts, offer my analysis, and let the voters read and decide.
And whatever they decide, we will then see what the courts say about Rounds, Bollen, and other players in this mess, now that we're getting a better picture of what they were up to.
So DR, do you think they should be punished? Do you think Mike Rounds should be trusted?
If this was an education program/school, there would be a demand to show the data driven increases over the period of time the program was in place. When it is for businesses, we can make up whatever figures we want and not have to prove their effectiveness. If it is to improve a school and help recruit teachers to deal with a shortage, we get the argument that increased funding is a waste.
Will Mike Rounds win? I admit the odds are in his favor. But consider the fact he had a tough time getting half the vote in the primary. Those are his people, throw in the dems, the libertarians, constitutionalist etc. Will they support Rounds? All he can hope for is to be a mild victor in a multi-candidate race.
joelie,
If Mike Rounds wins, that does not end the EB-5 investigation, it will only become more intense.
If Mike Rounds wins, he will take the 5 day old dead fish stink with him right into the senate, where is won't be ignored.
Unlike the South Dakota legislature, the senate has an ethics committee and investigators.
This seems to be a matter the state level cannot, for some reason, deal with properly. There are so many clearly fraudulent acts, but everyone is in it for self serving reasons, that the real issues get all distorted. And those involved are just ignoring and disrespecting people who want the truths. Perhaps the law of the land in SD is special. In other parts of the country or even the world, as an employee if you abscond with government property, or a company's property - that is called theft. Joop Bollen absconded documents with intellectual property that belonged to NSU. He pocketed fees during his employment at NSU in the tune of $30,000 per EB5 applicant over many years. Rep. Tyler presented the most accurate context so far, however conservative. Kudos!
DR, the EB5 is a federal program which permits states to run locally or the state level. Please read all the information.
BTW, the five finger lift is illegal in all states.
Jane, the state (at least the state GOP) cannot admit it did something wrong. It cannot bring itself to take down the stone wall and put good government over partisan interest. We need to keep hammering at that wall.
The Republicans who say we can't subpoena Bollen because he's a private citizen running a private business ignore the fact that he was a state employee through 2009. We need to investigate Bollen's finances to determine whether he collected or arranged to collect those fees while he was a state employee. We'd be investigating any old professor or bureaucrat who used his or her office for this purpose; the evidence before us gives us reasonable suspicion to investigate Bollen.
Cory, If anything by Rounds was illegal, then yes he should be punished. Will there ever be 100% proof that he knew what was going on? Doubtful. That's up to the prosecuting attorney, which is Brendan Johnson(right? I am not sure I guess). Should Joop Bolin punished? Yes, probably. Was Benda in trouble - well he knew that.
By virtue of Bendagate, hackers and sleeper cells have been introduced directly into the Homeland: the hacks of UPS, Home Depot, Target and others lay at the feet of Mike Rounds, Denny Daugaard because they became addicted to Chinese access.
Benda's death/crime scene was taken over by the US Marshal's Office because he and Bollen had been testifying to a federal grand jury.
For months I have seen what businesses did not make it, but is there a list of any that did? Did any of the EB-5 program work in SD?