Senator Larry Lucas (D-26/Pickstown) smells conflict of interest in the Mike Rounds–Joop Bollen relationship. Recall that Joop Bollen quit his state job running EB-5 investment for the Governor's Office of Economic Development on December 21, 2009, then signed a no-bid five-year contract with Rounds's GOED to run EB-5 investment for the state through his private company SDRC Inc. the next day.
Senator Lucas has proposed an amendment to state law on conflict of interest that would make such a swift revolving-door deal illegal. SDCL 5-18A-17 currently prohibits any "state officer or employee who approves, awards, or administers a contract involving the expenditure of public funds or the sale or lease of property" (like Joop Bollen, from 1994 to December 21, 2009) from having "an interest in a contract that is within the scope of the officer's or employee's official duties." Lucas would extend that prohibition to remain in effect for one year after the interested party leaves state employment. The Government Operations and Audit Committee will discuss this proposed amendment on Wednesday morning, September 24, as part of its discussion of the EB-5 program.
The GOED–SDRC Inc. contract came one day after Joop Bollen quit his state job. It thus did not violate the statute Senator Lucas suggests amending.
But remember: the state gave Bollen's SDRC Inc. one earlier no-bid contract. On January 15, 2008, Joop Bollen, in his state job as director of the South Dakota International Business Institute, signed a contract giving SDRC Inc., the company he incorporated just five days earlier, authority to manage EB-5 activities for the state. That contract, issued by a state employee to a private company that state employee owned, violated state conflict-of-interest law as written.
The Lucas amendment deserves discussion. But Bollen-SDRC Inc. contract of 2008 deserves prosecution.