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Rounds Politicizing GOAC Hearings; Barth Takes Rounds and EB-5 Pals to Court

In an astute comment under John Tsitrian's vigorous critique of Mike Rounds's buck-passing, Wayne Gilbert says that the GOP Senate candidate appears to view the GOAC investigation of the EB-5 scandal as a campaign opportunity rather a serious legislative matter with legal implications.

Gilbert is right: Rounds's formal response to the Legislature's inquiry reads as if it were written by his campaign manager, not by his lawyer. Rounds makes campaign promises. He recites his own campaign propaganda as fact. He bullies lawmakers, threatening them with defamation charges for having the temerity to ask him questions (and it's debatable whether such charges can even be brought). He accuses Democrats of concocting conspiracy theories. And in snark that exceeds sloppiness, Rounds consistently writes "democrats" with a small d.

Enter Jeff Barth to focus Rounds's legal attention. Yesterday the Minnehaha County Commissioner filed a petition asking the United States District Court of South Dakota to order Mike Rounds, Aberdeen lawyer Jeff Sveen, and former Board of Regents exec Tad Perry to "preserve evidence" related to South Dakota's EB-5 program.

For the first time in the EB-5 scandal, Rounds is being called to account in court. Rounds may think he can politicize the GOAC hearings, but he doesn't dare try politicizing a federal courtroom. Facing a federal judge, Rounds needs to get serious about the facts and law surrounding the abuses of power that occurred under his administration. (He can start by reading legal eagle Todd Epp, who brilliantly explains the legal details of Barth's petition.)


  1. lesliengland 2014.09.23

    wow. pre-law suit discovery!

    guess i'm gonna have to start capitalizing. rounds didnt capitalize "democrats". guess we got his attention.

    go rick, go susan, go corrina!

  2. Nick Nemec 2014.09.23

    capital letters are for sissies. he-man anti-obama tea party guys don't need them.

  3. 96Tears 2014.09.23

    Mike Rounds is a spoiled little baby ... with a thin hide and a glass jaw. His document displays how being pampered as governor with a new $3 million mansion, personal free uses of the state airplanes (until the little tike got caught), jobs and contracts for family and cronies and running a racket with a federal jobs program has changed the Luke Skywalker hero of the 2002 senate primary. He's Darth Vader now and he doesn't suffer criticism in the least. He not only expects to get away with it, the Emperor expects to be left alone while he feasts.

  4. 96Tears 2014.09.23

    Why did the Argus scribes fail to mention the Minnehaha County Commissioner's lawsuit in today's paper? Todd Epp got it and he isn't being paid fulltime to report news.

  5. Bill Dithmer 2014.09.23

    The question is, can Barth show he has been harmed? If not the suit is dead.

    The Blindman

  6. Nick Nemec 2014.09.23

    If all EB-5 activities had been kept in house rather farmed out to Joop's company the State of South Dakota would have collected around 140 million in fees rather than Joop Bollen. As a county commissioner Barth can argue those fees could have been used for some purpose like repairing county roads. Lower county property taxes and better county roads would have resulted had those fees been collected and dispersed to counties instead of privatized.

  7. caheidelberger Post author | 2014.09.23

    Brown County hasn't filed a lawsuit. They're just asking for a ruling on whether Joop Bollen dodged bank franchise tax.

  8. mike from iowa 2014.09.23

    You can tell where the election troubles will come from by seeing which states are governed by wingnuts.

  9. Bill Fleming 2014.09.23

    Interesting development. As per Mr. Epp, I too am curious as to why Barth didn't list Mr. Bollen as one of the Respondants. From everything you've posted, Cory, it sees that if anyone has "The File" Joop does.

  10. Todd Epp 2014.09.23

    It's all about knowing where to look. Can I have a secular "Amen" Cory! ;)

  11. Bill Fleming 2014.09.23

    Speaking of where to look, has anyone seen the list of questions mr. bollen will be asked? ( by the legislative committee)

  12. Roger Cornelius 2014.09.23

    Effective immediately, any and all references to Republicans shall be made in lower case only

  13. Roger Cornelius 2014.09.23

    I asked John Tristan about Bollen's questions and he didn't know.
    The GOAC letters to Rounds and Daugaard contained questions, but Bollen's letter was only an invitation.
    Also of note, last week Bollen "vowed" to answer GOAC questions.

  14. Lynn 2014.09.23

    I wonder if the Republican legislators will wine and dine Mr. Bollen after the GOAC meeting and just joke that it is all just a formality and let him know that they have his back.

  15. Bill Dithmer 2014.09.23

    How do I join a class action?

    A. Generally, before a court certifies a class action, it must conclude that there are too many class members for them all to be named as parties in the lawsuit. Technically, class members do not "join" into the litigation, but decide to participate by not "opting-out." It is only in rare instances when a suit is filed as an "opt-in" class action. In those rare instances, a claim form or request to join form may be necessary. Ordinarily, the notice issued to class members in the usual suit for compensatory damages will tell the class if they need to take any action to participate. In a suit for compensatory damages, any class member who does not "opt-out" may be bound by the results of the litigation if it proceeds as a class action. If a class member should determine, however, that he wants to participate in the suit as a named party, he may hire his own lawyer and seek to intervene (participate) in the lawsuit.

    How many parties is to many to be named?

    I found this while looking for answers about class action. " How a Class Action Proceeds in Court"

    The Blindman

  16. Bill Fleming 2014.09.23

    "How many parties is to[o] many to be named?"

    833,354 and counting?
    (The population of South Dakota)

    Divide $140 million by 833,354 and have
    The Joopster send every man, woman & child
    in South Dakota $168 bucks. :-)

  17. Jim 2014.09.23

    Rounds and his power mongers seem to think anyone who doesn't gush over rounds tenure is "politicizing" matters. That tact is simply offensive. Rounds has been a political creature for 20 years, wants another 6, but is not a career politician? Then when his record and conduct while elected are called into question, he cries no fair. Ridiculous.

  18. oldguy 2014.09.23

    Bill where did you get that $140 Million dollar figure? Are you sure that is a correct figure as I have never heard anybody even mention that figure was stolen.

  19. Bill Fleming 2014.09.23

    p.s. oldguy, my post is "tongue-in-cheek" of course. Nobody really knows for sure how much money has gone missing, because nobody knows where the records are.

  20. Jane Smith 2014.09.23

    Was Joopster a witness so that he could perjure himself to a greater crime? How might this work?
    The petition was spot on. Hope the Federal Court will show that they don't like monkey business to some these characters who seem to enjoy jerking the public around.

  21. Wayne Gilbert 2014.09.23

    An interesting thing about the campaigning in Rounds' response to GOAC--he makes this promise: "If elected to the U.S. Senate, I would support and lead a proactive effort to review all aspects of the federal EB-5 program, with a specific emphasis on federal regulatory oversight." Wait, isn't Rounds running as a champion of shrinking the federal government? Yet he intends to "lead" an effort to create more "federal regulatory oversight?" This an example of why he won't debate--his corner men know that when he bobs and weaves, he can't stay on message.

  22. Bill Fleming 2014.09.23

    ...besides, Wayne, how can he presume to lead the way on a project like that when by his own testimony he has never really taken interest in it, even in his own state when he was Governor? ;-)

  23. Bill Dithmer 2014.09.23

    I'm sorry to think in the negative, but everything I've seen leads me to believe that, if that if those contracts were legal, this case wont make it.

    The way everything sets now that $140+million was made legally. Bollen looks like a shrewd business man, and the most that can happen to Rounds is that he will be proven to be an incompetent boob. Of course by then the election will have already taken place.

    I doubt this will even make it to trial before the end of next year, if it does.

    The Blindman

  24. Roger Cornelius 2014.09.23

    Even if the contracts are legal, there remains the question of where did the money go?
    Was it laundered and given to various campaigns?
    About the time Mike Rounds EB-5 news broke, Mike Rounds quit talking about his $9 million campaign war chest. Why?
    Rounds final FEC report is going to be a little more than interesting.

  25. Bill Dithmer 2014.09.23

    " Barth can argue those fees could have been used for some purpose like repairing county roads. Lower county property taxes and better county roads would have resulted had those fees been collected and dispersed to counties instead of privatized."

    Nick, that would be true if the contracts could be provrn to be illegal. I think the only chance to prove either collusion, or racketeering, or whatever on Rounds is if the feds find something on Bollen and force him to roll on Rounds in exchange for immunity in his own federal case. I just dont see any other way.

    I bet there are some interesting emails out there.

    The Blindman

  26. Bill Dithmer 2014.09.23

    Roger if those contracts are legal it wont matter to the court where the money went as long as he paid taxes on it. If he didn't that would be the blackmale the feds could use to get him to roll.

    In order for this suit to grow legs it will take a lot of luck on Barths part. The building blocks are fragile, and Bollen appears to be the key block that will hold it all together.

    The Blindman

  27. Roger Cornelius 2014.09.23

    Agreed Bill, and that leaves the question of who is responsible within BOR and the governors office to approve those contracts.
    Following the money is crucial to this investigation, others have contended that in order to pull off such a scam at least two people had to be involved, was it just a Benda and Bollen operation.

  28. Bill Fleming 2014.09.23

    "...was it just a Benda and Bollen operation?" Seems like that's at least possible. Assuming their supervisors weren't paying very close attention, and just rubber-stamped everything they did.

  29. caheidelberger Post author | 2014.09.23

    A Benda-Bollen operation could only exist in a failed administration.

  30. Jane Smith 2014.09.23

    There is nothing legal about what Joopster et, al did with the EB-5 and the $$$$$$$$$$$ they absconded. It is layers and layers of covert fraud. Incompetent audits that allowed it time to fester the corruption. Also these greedy characters probably did not pay tax on the pillaged money. Democracy does not mean you can steal from its people. Mr. Blindman, please read the progression of the illicit process by which these individuals toys with the state of SD.

  31. Bill Dithmer 2014.09.23

    " Mr. Blindman, please read the progression of the illicit process by which these individuals toys with the state of SD"

    Jane I'm not saying its right only that I see it that way. Look at it like this. It looks improper, it is shady, and it might be illegal, but it has yet to be proven. What has been proven is that the state of South Dakota through its representitives let Bollen and Benda do this to them.

    It was either a brilliant business move, luck, or a scam, but if they crossed their i s and doted their t s it wont matter if the court doesnt like what they hear.

    I hope its not this way, I really do.

    $140million, not to bad for a decades work.

    The Blindman

  32. Jane Smith 2014.09.23

    Mr. Blindman, say a state employee is paid $30,000 by a lawyer and he does not have approval for special extra compensation with the Regent, yet he is pocketing that $30,000. Such pay is often called "under the table pay".
    Is this improper or illegal?
    By the way, that $30,000 times 800 applicants fees ....$24,000,000. Highly probable BTW.
    Let's say for shagrins the "the contracts" may be legit. Then that's a whole different bag of worms. What state employee were involved in such contracting? Who authorized such contracting? When a state employee draws a contract to himself, it's called embezzlement and fraud. When a state employee removes documents from the state and make it his personal property, that is theft.

  33. JeniW 2014.09.24

    What we are now seeing/reading/hearing from Rounds is an indication how he would conduct himself during the legislative session if he were to be elected, and as a legislator in dealing with people who would contact him about issues that they would have concerns about.

    I do not think that he would be to the SD advantage.

  34. Bill Dithmer 2014.09.24

    Jane, believe me, I understand everything you are saying, but what everyone here is looking for is a fishing expidition. No defense attorney is going to let the scope of the trial get big enough to be asked any question the oposing lawyers want to ask. And the questions that will be asked will have answers like, "I dont know," or "I dont recall," or in a couple of cases, "I plead the fifth."

    I have never seen anyone find the law that says the contract you are talking about was illegal, only improper. As for those papers, the state let them be taken from them. They might not have given them freely but they knew where they were going at the time and chose to do nothing, and are still doing nothing about getting them back. Has SD filed suit seeking the recovery of those papers?

    Sveen, and Perry dont have a clue where those papers are only where they might be, just like the rest of us. Unless I've missed something the state hasn't even tried to get those papers back through court.

    The man that could answer the questions is dead. That is convenient. The defense has spent hours, even before the suit was filled, herding public opinion in the direction to make Benda the fall guy. If they do their jobs, and they can keep their clients under control the chances are pretty good that everyone will walk.

    Everyone on here seems to want an all inclusive trial where the sky is the limit and you can keep adding to the scope and breadth of the case. That just isn't going to happen.

    Now, I dont want it to be this way but it looks like everyone goes free but walks out of the courtroom smelling like shit. That smell will fit Mike Rounds because he would be an inept shitty Senator. Nuff Said

    The Blindman

  35. caheidelberger Post author | 2014.09.24

    Bill, Bollen's SDRC Inc contract from January 2008 broke Regental policy and state conflict-of-interest law. It's illegal. Bollen also represented the state in court without a law degree or authorization. That's illegal. He appears to have operated a bank without a lending license and without paying bank franchise tax. That's illegal. I don't know if Barth's suit will get at those crimes, but we have the documents to show probable cause for arresting Bollen, not to mention firing him in 2008. He could still be arrested, if the Attorney General is interested.

  36. Bill Dithmer 2014.09.24

    Cory, I dont see Bollens name in the law suit. That is a whole new trial. And no the judge wont let Barth go fishing unless the defendents do something stupid that opens the door to more questions. I dont see that happening to any high powered attorneys that they will have.

    If Jackley wanted to charge Bollen, it would have been done by now. Jackley is in to deep to do anything now so expect nothing to change.

    In order for this suit to work the state needed to get Bollen in court first and then these other crooks. The fact that they didnt, and a private individual is trying to do just that speaks volumes. Advantage Mike Rounds

    The Blindman

  37. Bill Fleming 2014.09.24

    Isn't today the day Bollen gets his questions from the legislative committee?

    p.s. Dithmer, Bollen is listed as a witness in the Barth action. I see Barth is posting here. Maybe he can explain why he didn't list the Joopster as a "respondent." I have a few guesses, but why not ask the guy who filed the action?

  38. larry kurtz 2014.09.24

    recess until 10:45 EDT.

    David Montgomery 2m
    Rep. Mickelson says the committee should be concerned about "this contract... that Joop Bollen may have signed with himself"

    Todd Epp · 3m
    Mickelson: What bothers is that Benda abused his position and self dealing. Bollen may have signed with himself. Both are inappropriate.

  39. Bill Dithmer 2014.09.24

    Yes Mr Barth, what say you?

    "Bollen's revenue diversion appears to violate 4:37:1.A.1.a—"Intentional or deliberate act to deprive the State of South Dakota, the Board, any of the institutions governed by it or any affiliated organizations or students of something of value...."

    Bollen's contract with himself (he had James Park of SDIBI collaborator Hanul Professional Law Corporation sign on behalf of SDRC Inc. to avoid the patent silliness of placing Bollen's names on both lines) appears to violate 4:37:1.A.1.b—"Deception, false representation of fact by either conduct or other communication, or concealing what should have been disclosed, or made when the actor knew or should have known that the other party relied upon his or her representations, leading to injury of the State of South Dakota, the Board, any of the institutions governed by it or any affiliated organizations or students."

    Cory the state shot themselves in the foot. They did Bollens work for him by going along with the scam. Bollen was being a smart business man. Like it or not all business works this way. If it didn't there would be a lot of suits claiming the same thing Tyler is trying to prove. That the state should have had continued interest in EB5 because Bollen made millions the state should have collected is like saying I should be entitled to more money when a dog I sold is sold again for more money.

    Like it or not the state through its representitives gave that money away at the time the deal,"or scam," took place.

    The Blindman

  40. mike from iowa 2014.09.24

    What happened here with EB5 is exactly what wingnuts have been calling for-privatize gubmint programs,privatize the profits and therefore you help shrink revenues of said gubmint and force cuts in social programs. Oversight,we don't need no stinking oversight. Privateers are capable of policing themselves.

  41. Bill Dithmer 2014.09.24

    Mike, exactly!

    The Blindman

  42. Steve Sibson 2014.09.24

    Mike, true conservatives are not in support of private/public partnerships, because it is too often a marriage between Big Government and Big Business. Big Government social programs provide the demand, and Big Business crony capitalism provides the supply. That is not a free market, where the little guy polices the big guys via competition.

  43. Bill Fleming 2014.09.24

    So, Sibby, are you going to be voting for Gordon Howie for Senate? Do you think that's how all true conservatives should vote? Why do you suppose he's only polling at 3-5%? Seems like he should be at least 15% don't you think? Or are your "real conservatives" just going to hold their nose and vote for Mr. Rounds? I'm sure all who read this blog would be interested in your take on this (including me ...for a change :-)

  44. mike from iowa 2014.09.24

    Sibby-the gubmint is in business of promoting the general WELFARE of the nation. It is their job,nee responsibility to provide for those in need. In need means necessary components of life and living,not huge tax breaks for the filthy rich. The gubmint can and does provide services far cheaper than korporate amerika can.

  45. Roger Cornelius 2014.09.24

    I don't think there is an expectation that there will be an all inclusive trial over the EB-5 scandal, that is not how conspiracies play out. It is more likely that we will never know the extent of criminal activity by the major players.

    What is likely to happen is that a bunch of these players will get caught up in the second phase of their scandal, that being obstruction of justice, perjury, etc.

    Remember the fallout of Watergate, there were only seven guys that went to prison for the actually burglary, many more went to prison for trying to cover it up.

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