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Legislator Nygaard Wanted EB-5 Dollars for His Own Vineyard

Eldon Nygaard (third from left) raises a toast with Dakota Natural Meats organizer Brian P. Fredericks (second from left) at "Thankful Dinner" among Guangdong TongYee Law Firm, Dakota Natural Meats LLC, and State of South Dakota EB-5 Regional Center Project, August 26, 2013.
Eldon Nygaard (third from left) raises a toast with Dakota Natural Meats organizer Brian P. Fredericks (second from left) at "Thankful Dinner" among Guangdong TongYee Law Firm, Dakota Natural Meats LLC, and State of South Dakota EB-5 Regional Center Project, August 26, 2013.

Last November I reported that former legislator Eldon Nygaard from Vermillion was helping to promote EB-5 visa investment in South Dakota as recently as August 2013, when he traveled to China with leaders of Dakota Natural Meats, the last known (and still unrealized) project approved for EB-5 recruitment before EB-5 became a political liability for South Dakota's leaders last fall.

Nygaard was apparently interested in EB-5 money for his own business, too. Among the documents Rep. Kathy Tyler presented yesterday to support her allegation that the Rounds administration and Board of Regents countenanced fraud in the EB-5 program is this request for amendment to South Dakota's EB-5 Regional Center, filed by the South Dakota International Business Institute in January 2008. This document was SDIBI's justification to the U.S. Citizenship and Immigration Services to expand South Dakota's use of EB-5 from dairy farms to a variety of economic development projects.

I've cited this document previously to show that SDIBI employee Joop Bollen and state economic development chief Richard Benda planned to use the failed Hyperion refinery as a profit pool for EB-5 investor recruitment. This document also promotes a $10,000,000 expansion of Nygaard's Valiant Vineyards:

SDIBI is currently considering a proposal from Valiant Vineyards, South Dakota's first winery established in 1996 which produces over twenty different wines. Valiant vineyard [sic] ( is proposing to build a new winery in south east South Dakota near the intersection of I-90 and I-29. The new winery would consist of a modern building including a small convention center, gift ship, tasting room and 30 acres of vineyards for which land will be purchased. Wine initially, until the new vineyards becomes productive, will be sourced from Valiant's existing winery which's [sic] wine often is blended with imported varieties from California and other states. Valiant would be hiring educated winemakers and marketers to produce a South Dakota wine in a professional package that will be distributed nationally. Valiant estimates new job creation to exceed 155 jobs which is in line with the RIMS II Multiplier numbers. Twenty percent of the jobs will consist of skilled labor and 80 percent of unskilled labor. This $10,000,000 winery would generate 153 jobs (15.3910 per million X 10 million) allowing 15 EB-5 aliens (15 aliens X 10 indirect jobs per EB-5 alien) to contribute $7,500,000 ($500,000 per investor X 11 [sic] investors) Valiant is committed to provide $2,500,000 to arrive at a total project cost of $10,000,000. The entire project will be constructed in 18 months when the entire $10,000,000 is invested and at which time the jobs, as per definition of the RIMS-II Final Demand Multiplier, are created [SDIBI, Request for Amendment to DEDR, January 2008].

Nygaard's proposed I-90/I-29 wine complex seems not ot have materialized, and no public documents indicate that any EB-5 investors signed on to his operations.

In 2008, Nygaard was a Democratic member of the South Dakota House. That same year, the Legislature performed its first review of SDIBI and the Governor's Office of Economic Development's EB-5 program. The Legislature's Government Audit and Operations Committee, chaired by then-Senator Jason Gant, missed an opportunity to exercise strong oversight over the program, even as Joop Bollen privatized EB-5 and turned his state job into a profit center.

And while GOAC slept at the switch, a fellow legislator hoped to make bank on EB-5.

Maybe that's why we can't count on GOAC to conduct a rigorous investigation of GOED and EB-5 today, even as evidence of malfeasance mounts. Perhaps the Legislature just can't bring itself to investigate a cookie jar for which its own members were eagerly reaching.


  1. Jenny 2014.09.09

    Well this is turning into South Dakota's own Solyndra, isn't it. I thank Rep Kathy Tyler for trying to get to the bottom of this mess.
    SD voters need to take a good hard look at who they decide to vote in for their next Senator in Nov.

  2. Bill Fleming 2014.09.09

    So they didn't want little dairies because the cash cows weren't big enough?

  3. Nick Nemec 2014.09.09

    Senator Nygaard has shown himself to be an immature opportunist. When the Senate Democrats failed to elect him leader he immediately switched parties and became Senator Nygaard (R). At least now he provides rock gut swill for Lincoln Day dinners rather than McGovern Day Dinner.

  4. caheidelberger Post author | 2014.09.09

    And according to SDIBI's amendment request, Nygaard's product was actually a combination of locally grown wine and imported wine.

  5. jerry 2014.09.09

    Solyndra indeed. Solyndra generated energy while the EB-5 generated corruption. One would have the possibility of lighting homes with green technology furnished by the light of day. The EB-5 functioned in the dark backrooms of political fraud, theft and corruption at the highest levels of state government. Both were the ideas and were first implemented by republicans. George W. Bush put the wheels in motion with loan guarantees for Solydra and Mike Rounds put the corruption in motion with cash in his pocket to put his motley crew together for the EB-5. I actually think George W. Bush was looking down the road for the taxpayers to help take the demand off dirty coal pollution. The thinking of Mike Rounds was how much of a cash cow this would bring for him and his mob and how long could they loan shark it.

    Solyandra sunk because of cheap Chinese competition. EB-5 sunk because of millions of Chinese dollars pumped into a ponzi scheme of sorts promoted, backed and energized by the State of South Dakota. This scheme was led by Mike Rounds and Dennis Daugaard along with others who have also enriched themselves at our expense. This was never designed to be a business deal. The only thing remotely designed in these projects that had to do with agriculture was the fleecing of the sheep, in this case Chinese, Korean business investors and South Dakota taxpayers.

    Think of the millions that have gone missing in South Dakota, but are they? Look further, I think they are still here hiding in plain sight. Now, if we think of those millions and we know who was behind their disappearance, why would we want to put a governor back into the office that stole them in the first place? Why would we send the capo di tutti capi, the boss of bosses, to Washington to further line his pockets with an even greater access to our taxpayer monies? Put a number under both of their names just like Rick Perry down in Texas, birds of a feather.

  6. caheidelberger Post author | 2014.09.09

    Little dairies not big enough cash cows? Yup, pretty much. Remember during GOAC's review of SDIBI in 2008, NSU's interim president Laurie Nichols (who is still at SDSU and available to asnwer questions from today's GOAC) told Chairman Gant et al. that EB-5 investors were only biting on big (i.e., $50M and up) and that the dairy projects were "just too small and require too much bank financing to be competitive."

  7. 96 Tears 2014.09.09


    Title 18, Section 1961 of the United States Code sets forth a long list of racketeering activities, the repeated commission of which can form the basis of a RICO Act claim. These underlying federal and state offenses exist independently of the act, and include the crimes of homicide, kidnapping, extortion, and witness tampering. Racketeering activities also include property crimes such as robbery and arson. A number of financial crimes are also listed, such as money laundering, counterfeiting, securities violations, as well as mail and wire fraud.

  8. grudznick 2014.09.09

    Doesn't this Mr. Nygaard fellow grow his wine in district 30, home of some insaner than most legislatures?

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