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Rounds Blaming Regents; Regents Say Bollen Contract Illegal

As the press turns up the heat on the EB-5 scandal, Mike Rounds is looking for a new fall guy. His choice: the South Dakota Board of Regents.

David Montgomery reviews the Republican Senate candidate's public comments and his defensive responses to the Government Operations and Audit Committee's questions about his role in South Dakota's EB-5 visa investment dealings and finds the former governor pairing his claimed ignorance of the program with blame for the Regents' sloppy management:

"Based on (media) reports ... I was not aware the Regents were not totally involved with and aware of what was going on," Rounds told the Argus Leader last week. "If I had known about it (at the time), I probably would have asked, 'Where are you at, Regents?'"

...Rounds said he was "not surprised" that [former state employee and private EB-5 management contractor Joop] Bollen's contract wasn't brought to him. "Very few ever were," Rounds said.

"But ... it would surprise me if the Board of Regents was not aware of the fact that one of their employees had signed a contract and it did not have their due process of having an attorney review it and help to write it," Rounds said [David Montgomery, "Rounds: Regents Oversaw EB-5," that Sioux Falls paper, 2014.09.24].

Yes, Bollen technically worked for the Board of Regents on the Northern State University campus. But NSU business dean Clyde Arnold says that's not how Bollen really worked:

"He made good contacts with the Governor's Office of Economic Development, and we began to do things," Arnold said. "The next thing I know, he had branched out. ... By the time I moved on as dean (around 2005), he was almost working for GOED" [Montgomery, 2014.09.24].

Perhaps most importantly, where Rounds has dodged the real questions about the propriety of Bollen's EB-5 activities, Regents exec Jack Warner is saying straight up that Bollen's 2008 contract with himself was illegal:

"He did not have the authority to engage in those contracts," Warner said. "(That) means any contract he would have engaged in would then have to receive approval by either Northern or the Board. No such approval was sought and no such approval was granted" [Montgomery, 2014.09.24].

Whether or not Rounds or the Regents knew about Bollen's 2008 contract with his SDRC Inc., the Regents are saying Bollen had no authority to execute that contract. Doing business as SDRC Inc., Bollen thus profited from state authority that he had no legal right to use. That would suggest that the moment any executive found out about that illegal contract, that executive should have hauled Bollen to court and demanded that SDRC Inc. surrender any and all documents and emoluments received under that bogus contract.

The Regents and the state now know about that bogus contract. Why has the state not taken action to retrieve what never belonged to Bollen in the first place?

p.s.: If the Regents are responsible for South Dakota's EB-5 program and any misdeeds conducted thereunder, do the Regents also get to claim credit for the $600 million in capital investment and more than 5,000 jobs that Rounds attributes to EB-5?


  1. jerry 2014.09.24

    As Cory has shown regarding Rounds numbers of jobs created, are way off by half at least, here is the kind of wages those corrupt jobs bought to the table for those "newly employed". One thing that we seem to create more than any other westernized country, is low paying jobs.

    We create the crappy jobs here and then we pay crappy low wages so that we can then deny the workers of adequate healthcare. Poor wages..thanks republican corrupt legislators. No healthcare and no Medicaid Expansiion for those crappy EB-5 jobs..thanks republican legislators. Oh yeah, and a big kiss to the corrupt kingpins who bought this all to South Dakota, Mike Rounds and his sidekick Dennis Daugaard

  2. Steve Sibson 2014.09.24

    I have heard complaints over the years that Rounds has others do the dirty so he stays clean. First Benda, and now Bollen, have become fall guys. I think South Dakota needs to come up with a different economic system that does not use public/private partnerships.

    Another point: how many of those created jobs went to illegal immigrants?

  3. larry kurtz 2014.09.24

    Sibby, do you know of any way EB-5 money could be funneled into the Future Fund?

  4. caheidelberger Post author | 2014.09.24

    Larry, the only path I can see is the indirect path of other budget plusses: EB-5 helps business start, business then pays more taxes.

  5. larry kurtz 2014.09.24

    So, the $75 million that Rounds gave to Future Future recipients came from overages at workman's comp: how could that amount be so high?

  6. 96Tears 2014.09.24

    Mike's snappin' and squealin' like a bitin' sow. Man up, Mike. Tell the whole truth, and then resign your candidacy.

  7. Jane Smith 2014.09.24

    Joop Bollen may be one of the ring leaders, doubtful he is the fall guy. If anything it appears that they all thick as thieves and in on the illicit bounty. Eventually it will be surfaced that there was a ring of people involved. Equally involved and responsible for the demise of a Fed program that could have benefitted SD. Pointing fingers and tossing the guilt hackysac to the Regents is almost predictable. Joopster must have something on Rounds.

  8. Steve Sibson 2014.09.24

    "Joopster must have something on Rounds."

    Does that explain why he is keeping his mouth shut?

  9. Roger Cornelius 2014.09.24

    I doubt that any of the money found its way into the Future Fund, your point that it may have been used not only to capitalize business's and in turn make contributions to Mike Rounds is legitimate. The only problem is the small size of those contributions.
    It is more likely, to me anyway, that a lot of money has found its way into PAC's that will be coming out attacking Rick Weiland. For instance, Karl Rove has been boasting of a $10 million infusion of cash into the mid-terms, where did he get that money?

  10. Roger Cornelius 2014.09.24

    I just read that, fascinating.

    $250,000 in legal fees paid to crony attorneys to defend Bollen's screw ups and related EB-5 matters.

    Mercer is also reporting about the secret account SDRC managed that was to be used to collect fees due to South Dakota.

    How much was in that account and did the state actually receive what was due them by Bollen?

  11. PrairieLady 2014.09.24

    Sooooo........where is Joop now? Still in the country?

  12. Lynn 2014.09.24

    Where is Joop now? Oh probably having steak, lobster and having an ice cold Heineken at his home in the Historic District on North Main in Aberdeen.

  13. mike from iowa 2014.09.24

    Prolly at Dakota Dunes showing Rounds how to build a dike to protect his shorefront property. Bollen is from the Netherlands and Rounds already knows how to sandbag.

  14. Bill Fleming 2014.09.24

    Very clever, Mike. Good one.

  15. mike from iowa 2014.09.24

    Thanks Bill. This would be funnier if it didn't look like South Dakotan's might lose a ton of money and then some.

  16. Sid 2014.09.24

    the headline here should read "Rounds Turns and Bites Himself on the Tail"
    The problem with Rounds taking this tack is that this puts the onus of the whole transfer of state business without any oversight onto the Board of Regents (if Rounds is to be believed). However, who was one of the most powerful regents then and now? Harvey Jewett- Law partner to Jeffrey Sveen, member of the firm who represented SDRC in various litigation around the country and who benefitted directly from the influx of cash that the EB-5 program created. Also, note that they benefitted further from the influx of EB-5 cash into the Huron Turkey plant of which Mr. Sveen has been the Chairman of the Board.
    So, the question now is: Will all these cronies of Mr. Rounds stand by and allow themselves to take all the blame and responsiblity for what has happened or will they apportion the responsibility where it belongs? (Actually, for all we know, those two alternatives are not mutually exclusive!)

  17. Jaka 2014.09.24

    Distressing to hear Round's attempts to 'pass the buck' on to the Regents back when he was the one in charge. Also, Cronin (spell?) on the board hearing today was trying to imply that the US ATTORNEY could and should clean up this matter immediately by only coming forward and talking to us (we being so important!) upon our requests. I have watched for 40 yrs how the power in Pierre work to "cover" for each other and this is starting to look like a circle of snakes with each others tail in their mouths........

  18. Roger Cornelius 2014.09.24

    Anybody besides me notice how quiet Mike Rounds is on Joop Bollen's role in the Rounds Scandal?

    He has blamed Benda, the Board of Regents and probably his grandma, can't blame Grandpa Don, but he hasn't blamed Bollen. Hmmmm

  19. Jane Smith 2014.09.25

    Joop Bollen do tell! What complex web of deceit have you?
    Is this anyway to role model to your child? Steal, lie and cheat! Hope the hand of justice show you that you cannot build your wealth at the cost of others.

  20. Mary Perpich 2014.09.25

    I love the way Republicans are passing the buck on this scandal. It is my opinion that they are all culpable and that Larry Tidemann will be the scapegoat.

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