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?