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Rounds Responds, Pretends 5000+ EB-5 Job Claim Is Reported Fact

We have Mike Rounds's responses to the Government Operations and Audit Committee's questions about his Office of Economic Development's use of the EB-5 visa investment program. The answers are by turns combative (he accuses legislators of defamation) and evasive.

Let me leap immediately on one persistent bit of hogwash. Asked how closely he worked with Richard Benda and Joop Bollen in the state's use of EB-5, Rounds offers no new information, simply saying as he did last week that he received "updates." He then launches into his hyperbole about EB-5 bringing over $600 million and over 5,000 jobs to the state. But check out the important addition to his phrasing:

The federal EB-5 program was a tool that, as reported, helped create more than 5000 jobs and $600 million in capital investment in South Dakota [emphasis mine; Mike Rounds, response to GOAC questions, 2014.09.22].

Rounds repeats this phrasing in his crafty non-response to the question of whether any beneficiaries of the EB-5 program made campaign contributions to any elected officials overseeing South Dakota's EB-5 program:

The "beneficiaries" of the federal EB-5 program number in the tens of thousands. As reported, 5000+ jobs, $600 million in capital investment, local property tax payers, schools, 27 or more projects in almost as many different communities, utility users, investors, indirect jobs created, service providers, and spin-off business. Where, precisely should we draw the line with "beneficiaries"?

If the questioner has a specific person in mind, political contributions are public information for both state and federal candidates [emphasis mine; Rounds, 2014.09.22].

The press has probably reported that the Rounds campaign has claimed that EB-5 created over 5,000 jobs. But the press has not reported any independent confirmation of this unsubstantiated claim. The only analysis of this claim that I've seen in the press is mine, which finds that counties where EB-5 investment has supported business projects have seen a total job growth since the inception of EB-5 of only 2,755.

It has been reported that Mike Rounds claims that EB-5 had great economic impact. It has not been reported that EB-5 really had that economic impact. Mike Rounds is trying to alchemize his airy campaign claim into a reported fact.

p.s.: Speaking of evasive, Mike Rounds has ignored Bob Mercer's 20 questions about EB-5 since May 4. Mercer says Rounds's campaign manager is promising a meeting between Mercer and Rounds to answer any questions not addressed in the GOAC responses.


  1. moses 2014.09.22

    Good post, any more on that senator from Baltic Tidemann when is he bringing Bollen up .

  2. 96Tears 2014.09.22

    Mike Rounds, to suggest "more than 5,000 jobs" you should have the insight or at least the courage and the evidence to prove your claim.

  3. David Newquist 2014.09.22

    A significant evasion arises in his second response. He places all responsibility for overseeing the activities if Joop and the SDIBI on the regents. Although the governor has oversight on the regents, they did impose the SDIBI on NSU with the Business Department as willing participants, but the governor, who appoints the regents, has the right to review BOR activities. However, Rounds' evasion does identify the regents as active players in the economic tamperings of the state. Perhaps citizens will finally realize that Bill Janklow transformed the BOR into an economic development arm of state government.

    His efforts to implicate the GOAC seal Rounds' reputation as, at best, an incompetent governor. His responses are very damning documents in their evasion of responsibility.

  4. Tom W 2014.09.22

    Im sure Kathy tyler can give us all the answers, shes the know it all on this subject. cant wait for NOV to get her out of office
    Go rounds, go wiik, go FredD

  5. Paul Seamans 2014.09.22

    Mike Rounds' claim of 5000 jobs created by EB-5 is quite similar to John Thune's claim of 42,100 jobs created by the Keystone XL. They have no research to back up their claims and have the attitude of, "so, prove me wrong".

  6. caheidelberger Post author | 2014.09.22

    Tom, you prefer corruption and fake numbers to asking questions and seeking accountability? How much have you contributed to the Rounds campaign, and have you seen any of those EB-5 jobs?

  7. caheidelberger Post author | 2014.09.22

    David, you identify the overarching theme of Rounds's response: if good things happen, he deserves credit, but if bad things happened, it was someone else's fault. He will lay the blame on NSU, the Regents, Benda, even the Daugaard Administration. In none of his responses does he take ownership of any of the problems in EB-5.

  8. Steve Sibson 2014.09.22

    "Although the governor has oversight on the regents"

    Based on the number of times Jewett entered the governor's office during the Rounds administration, there was indeed oversight.

  9. Roger Cornelius 2014.09.22

    Well, I didn't expect much from Rounds and got what I expected, nothing.
    The obvious of course, is telling us that EB-5 was a federal program that he had no responsibility for, and at the same time taking credit for these mysterious 5,000 jobs and bringing $600 million for the state. Ok, where'd that $600 million go?
    Anybody know if Susan Wismer will be at the meeting or has she been replaced? I'm hoping she'll be there and show the public and the media some more of that "fire in the belly" she is capable of in responding to Rounds fiction.

    If anything at all, Rounds raises more questions than he has answered, no wonder he refuses to debate.

  10. Roger Cornelius 2014.09.22

    Where can I find Mercer's 20 questions for Mike Rounds?

  11. Roger Cornelius 2014.09.22

    Thanks to my main man Larry!

  12. Steve Sanchez 2014.09.22

    What a joke. If former Governor Rounds alleged responses weren't so misleading and evasive, they'd almost be laughable. Not once did he name the state agency with all the specific transactional details leading to the extensive investigations.

    As reported, the state agency in question is - and was - the Governor's Office of Economic Development.

  13. larry kurtz 2014.09.22

    Mercer is in a precarious position: as an observer of the creation of the Governor's Club he straddles the tiny line between a former boss's legacy and knowing too much.

  14. Roger Cornelius 2014.09.22

    John Tristan as usual has an excellent thread on the Rounds non-answers.
    And over on the dump site, Troy Jones the chief apologist for Mike Rounds is pinch hitting for Powers. Jones is sending out an alarm that if Rounds isn't elected to the senate, we'll be stuck with Harry Reid. The rest of his thread explains and justifies how Rounds has exonerated himself from EB-5.
    Mike Rounds feeble answers today is why Tidemann should of had the courage to subpoena Rounds.

  15. Peermudd 2014.09.22

    How about a $ total for the existing SD businesses that lost money when they had to subordinate their liens on the NBP plant. Plus how many had their business go down or otherwise negatively impacted. Did this decrease economic activity?

  16. Jane Smith 2014.09.22

    Dodge Ball!
    1. He contacted himself by saying he got updates, yet he is so removed on the factual details = incompetence.
    2. He cut Bollens pay in half, and then uses a state agency as a shield to deny any participatory knowledge. = manipulation.
    3. He claims credit for a federal program, yet he allowed a lucrative state management of the program to be privatized and loose all the fees (revenue for the state). = guilty by association.
    4. He states that the dems are politicizing the issue. But this is a real issue / problem of fraud. Of course it should be discussed, answers demanded, truths be told. = real democracy!

  17. Big Daddy 2014.09.22

    At the risk of bringing up yet another question; isn't the EB-5 program specifically designed for matters of economic development? If so, isn't the fact that half of the $60 million that went to Northern beef Packers was to refinance a $30 million loan from a Cayman Islands shell company way out of the scope of the program? I believe there was also money that went refinance a loan for Basin Electric. How is that economic development?

  18. Dave 2014.09.23

    Mike Rounds claims that EB-5 has great economic impact. If it's so great, why does Dennis Daugaard prefer a kiosk in the Mall of America to try to attract jobs rather than keep EB-5 going in South Dakota. I'm guessing Rounds loves it because the program, under his watch, was so easy to exploit.

  19. lesliengland 2014.09.23

    repub strategy across the board appears to be "do nothing to impact rounds'/daugaard's electability". what will weds. "meeting" bring? how big is eb5 in total package of issues that will defeat repubs?

  20. caheidelberger Post author | 2014.09.23

    Big, you are on point: refinancing loans is not economic development satisfying the spirit or letter of the EB-5 program. Review this post from November 10, 2013: refinancing loans doesn't create new jobs; it simply pours more gravy for developers.

  21. caheidelberger Post author | 2014.09.23

    Dave, you raise a comparison of Daugaard and Rounds: maybe Daugaard actually has a stronger moral compass and won't engage in such exploitation. Or maybe South Dakota's use of EB-5 simply ran out of gas when Daugaard came into office, as it exploded in other states and South Dakota faced much more competition from much sexier development projects.

    The comparison does come out of the responses. Daugaard's response contains none of Rounds's combativeness and partisan snark; Daugaard just answers the questions.

  22. Jane Smith 2014.09.23

    Steve Thank you for the article. The corruption is many. However, the management of the EB-5 in SD is the most flagrant form of greed by a group of people who boldly personally boldly enriched themselves from what should have benefitted the people of SD, and continue to stall demands for truths.
    Fingers are pointed to confuse people, such as using a dead man as the fall guy. Bait and switch of the money involved is used to avoid getting a real audit completed. Relying on the claim by the guilty guy as declaration of innocence - according to Joop Bollen, there was no illegal activity. Really.!?!?
    All those so called audit seems to be questionable. How is it that an individual who starts with nothing on a state salary amass such wealth in a short time? Why is the audit process not involve even a mere peek under the hood let alone lifting the engine and dismantling the innards to see how it really works. If the so called audits were properly done, the conversations today would be very different. It is comical how these characters all point to insufficient audits and investigations and claim innocence.
    It's pretty bold how Joopster et al are so brazen to continue to fool the public.

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