Last updated on 2014.09.28
Perhaps it was destined to happen: I can finally link Joop Bollen and Chad Haber.
Both men think they can practice law on behalf of the state of South Dakota without a law license.
Fake Attorney General candidate Haber will never get the chance to test his belief. He'll skip the country with the remains of his Base Connect money before he wins any public office.
But Joop—oh, Joop!—has already tried it, with awful results.
Kathy Tyler and I have discussed Darley International's ongoing litigation against South Dakota. Back in October, 2007, California-based Darley signed a contract with the Hanul Law Firm of California and Korea to help recruit Chinese investors for EB-5 visa investment projects in South Dakota. Hanul was working with the South Dakota International Business Institute, which Joop Bollen, a South Dakota Board of Regents employee, directed for the purpose of promoting economic development in South Dakota. Within three months, Hanul and Darley stopped playing nicely. Bollen wrote Darley boss Robert D. Stratmore a hilarious buzz-off letter and formed his own private corporation, SDRC Inc., to do Darley's job and claim Darley's fees.
Darley sued in federal court in California to force SDIBI to enter arbitration. On August 22, 2008, Joop Bollen, figuring he had a grip on the situation and not wanting to trouble his superiors, submitted his own response to the court.
Read that again. Somebody files a suit against a state agency. Somebody wants to hold that agency, and hence, the people of South Dakota, liable for some alleged naughtiness. The guy running the state agency incurring this legal wrath doesn't say, "Holy crap! I'd better call the state's lawyers and tell them what's up!" The guy at the state agency, who is not a lawyer, decides to take it upon himself to write a legal brief to keep the state out of hot water... and doesn't tell anyone else in the agency about it.
This goes poorly. The California court takes Darley's word over Bollen's and on October 7, 2008, orders SDIBI (the state... us) to submit to arbitration.
The state, of course, finds out. (I tell all of my kids, all the time: if you rationalize doing something under the assumption that nobody will find out, don't do it! Someone will find out!)
In January, 2009, Bollen calls Northern State University attorney John Meyer and asks an innocent question about arbitration. Meyer asks for documents. Bollen sends a few. Meyer hears alarm bells. Meyer asks Bollen for more information. Bollen tries to pawn the matter off on Hanul, but Meyer's like, No, Joop, send me everything you have, now! Bollen sheepishly complies, and Meyer realizes, Holy crap! We've been sued!
Meyer tells Board of Regents attorney James Shekleton, Shekleton tells BOR exec Tad Perry, and pretty soon Pierre's on fire. The Regents retain counsel (real counsel, Joop, bar-certified counsel). They get Bollen to file a declaration saying Never mind me, I'm not a lawyer. Meyer, Shekleton, Perry, Attorney General Larry Long, and even Joop's secretary Cherri Brick (I kid you not, and oh my stars, I can't wait for the casting call for that role!) all file declarations supporting the Board of Regents motion to vacate and hefty supporting argument asking the court for mercy. We didn't know our flunky was practicing law without a license and exposing the Board of Regents and State of South Dakota to this legal liability! Cut us some slack!
The federal court did cut us that slack, though Darley then dragged us into new litigation that continues today. And now that Bollen no longer works for the state, he's been working hard to shield his private company SDRC Inc. from any liability in the Darley case and leave the state holding the bag.
But again, the remarkable point here is that the state continued to cut Bollen any slack. In 2008 he practiced law without a license, represented South Dakota in court without authorization from the Attorney General, and exposed the state to serious legal liability that our real lawyers had to run in to clean up. Yet the state kept him on the job through 2009. The state sent him on fancy trips overseas to recruit more EB-5 investors. The state gave him a lucrative no-bid contract to continue his same EB-5 work as a fully private citizen.
With a Haberian enthusiasm, Joop Bollen broke rules left and right. People in Pierre knew he was breaking these rules. And people in Pierre (I'm looking at you, Mike Rounds) kept doing him favors and keep doing him favors.
It boggles my mind that Bollen keeps getting these favors. It should boggle every voter's mind that Bollen-favor-doer-#1 is now asking for our trust on the November ballot.
So essentially, Joop got the state sued, tried to act as if he was a lawyer (which he wasn't), others found out, the state stepped in and throughout all of this he was never reprimanded and during this and after he was still in charge of getting money for the NBP plant, which Mike Rounds was right next to him during the whole process?
I just want to make sure I'm hearing this right
Joe, your summary is reasonably accurate. What do you think?
Wow. What a tangled web.
I absolutely love the Haber/Bollen connection
You know what will probably do a whole blog on it.
Sorry, that should be "you know who will do a whole blog on it".
Back to an earlier topic. Joop incorporated SDRC, Inc. as its President, and it was established with the SD Secretary of State. Despite the fact the Joopster had Park sign the contract with the state on behalf of SDRC, neither Rounds nor the Board of Regents can claim ignorance of the fact that it was the Joopster's company. It was and is a matter of public record. Every contract the state enters into is reviewed by legal also. There should be a memo or documentation of the contract approval by some higher up.
Roger, I didn't think a correction was necessary.
Ro: "Every contract the state enters into is reviewed by legal also." I wonder: who reviewed the SDIBI–SDRC Inc. Memorandum of Understanding in 2008? Is it possible that Joop was in such a do-it-yourself mood that he never kicked that MOU up the chain for review, just as he didn't kick the Darley litigation up the chain when it started?
And in 2008 the liberal SDGOP establishment said we don't need IM10 because there is no corruption in South Dakota's governmental system.
sib, can u publish a nomenclature users-guide, I cant keep up w/your wit? kiss kiss
One huge question is why did Dennis D, Rounds, and Jackley all claim that the only scandal here was some double billed travel vouchers? There is no way they can claim that they never heard about of any of this until now, and say they are doing their job. Absolutely mind blowing.
Over on the dump site, Powers is pontificating that Democrats are using newspaper clippings to feed this story, Sorry Pat, I've been reading documents provided by Cory and not old newspapers.
Clearly, Bollen was trying to cover up this lawsuit from the state as fast as he could, by doing so he made it worse.
Why Rounds and BOR didn't take administrative action against Bollen is the question. He should have been fired immediately.
That Larry Long and Marty Jackley didn't take action against Bollen is evidence that the AG's office is involved in a continued cover up. Bollen should have been prosecuted for this misrepresentation.
Piss on Sibson. The adults are talking here.
What hold does Bollen have on the entire wingnut menagerie? He must have videotape of wingnuts eating fetuses or something.
Mike, or maybe he was just there for the conversations about GOED, NBP, and EB-5? Maybe Bollen has the answers to all the questions we've asked about the offshore financing and other weirdness in this affair?
Roger, note that DWC's immediate response does not refute any of the key facts laid out above, specifically:
1. Darley sued SDIBI in 2008.
2. State employee Bollen concealed this information from his higher-ups in 2008.
3. Bollen illegally represented the state in his response to the court in 2008.
4. The state found out about this litigation and Bollen's DIY lawyering in 2009.
5. The state appears to have taken no action against Bollen for his error. Instead, the state continued to employ him and offer him a contract opportunity to make big money managing a state economic development initiative.
I've invited Pat to explain the relevance of his blog response to the main thesis here. Predictably, he has "moderated" the comment in which I offered that invitation.
Money mike from Iowa, that $140 BOR money went someplace. That money from NBP investors went someplace.
Maybe Bollen has been paying for protection, that would be a legitimate question.
Why the Golden Boy Mike gave so much power to Joop is what I'd like to know. Did the GOP boys just use him to do their "common sense" dirty work?
Seems pretty obvious,Joe K,that wingnuts are gonna use Benda as the fall guy,since he is the only one that cannot speak for himself anymore. Dead men tell no tales to get guilty co-conspirators in dutch.(pun intended)
Covering for an immigrant who acts like he does not know the system and makes millions from running the office himself, AND, not investigating this, smells very much like some people were getting kickbacks from Joop. They let him privatize a state agency because privates make more money and maybe many more than Joop was going to get a piece of the pie. Putting an immigrant in the middle makes it all look like his fault for being stupid if he gets caught. Meanwhile everyone else gets off free if we can just cover it all up. Cover up by ignoring that anything happened.
The State Bar is quite aggressive in going after unlicensed USD law grads who try to help indigents obtain public benefits, such as veteran's benefits or indigents who have been charged with crimes.
http://rapidcityjournal.com/news/rapid-city-woman-loses-supreme-court-appeal-ban-from-practicing/article_c23adabc-5931-11df-8315-001cc4c03286.html
While it probably is good public policy to prevent unlicensed folks from acting as lawyers, the priorities in choosing who to prosecute is somewhat unsettling. Thanks for this excellent research Cory.
Why, why, why, why did Daugaard wait until September last year to dump SDRC, Inc., when all this other crap preceded it, including knowledge the feds were investigating these guys?!!!? How could these abuses NOT be common knowledge on both the 2nd Floor and the 1st Floor of the State Capitol? It isn't that big a building and there are not that many employees in it.
Hello left hand, is right hand awake?
Does Daugaard have a chief of staff or any intelligent life in his office who keep track of this stuff? I've written off Rounds as a crook and those in his inner circle as a bunch of crooks, except I thought they were more clever and careful than this. But Daugaard really let things slide far, far too long.
Please excuse the outburst. I just can't believe these people could be so dumb.
It must be interesting for the campaign managers for Rounds and for Daugaard to come up with a response to make them look like pure innocent victims of this whole affair.
JeniW.
Wadhams is over on dump site blaming President Obama's appointed U.S. Attorney Brendan Johnson for stonewalling.
"And in 2008 the liberal SDGOP establishment said we don't need IM10 because there is no corruption in South Dakota's governmental system."
There you go again Steve. SDGOP is not "liberal" but conservative. Maybe not as crazy conservation as yourself but Republican. Democrats are not and never have bee involved.
Rounds can take a step to clear this up by testifying under oath. He won't but what is he afraid of? What do you think Steve?
this is too messy and it is not clear our expose' would result in a democrat's victory (weiland, mainly) for example, on a Rachel Maddow Show, but it seems time is short and a compelling story line needs to be put together by one reporter with access to legal, accounting and political guidance. this seems like a full time job for the next month.
anyone up to it? otherwise the voting public may not be able to get up to speed and serve repubs their walking papers.
leslie,
Agreed, there is a massive amount of news on EB-5 and related Rounds scandals and very little time to work with it all.
If all of Rounds' and Daugaard's corruption and lack of oversight are to be understood by the voters, we need to share what Cory reports on social media and encourage your friends to share it too.
If you look at the new revelations made in just the past two weeks and the Weiland closing in on Rounds in the polls, maybe we are making an impact, maybe more voters are at least looking at the surface of the ongoing corruption in the state.
96, you bring up Daugaard's choice to keep Bollen on contract for over two and a half years. Daugaard did find the courage to do what Roger says Mike Rounds should have done in January 2009 when the Regents found out about Bollen's DIY lawyering: canned him.
Suppose we accept the thesis that Rounds and Daugaard covered for Bollen because, as the lynchpin in EB-5 funding for Northern Beef Packers, Dakota Provisions, and the Deadwood Mountain Grand Casino (the three projects most clearly tie-able to Rounds's friends and agenda), Bollen could spill the beans and take everyone down and thus must be kept happy. What would have changed in the risk analysis to allow Daugaard to finally cut Bollen off in September 2013?
Let's speculate:
FBI agents come knocking in spring 2013. Daugaard gets spooked. He realizes they can't keep the scam running. They have to shut it down, dismantle it, keep from taking any more chances.
Bollen thinks he can do anything, but he accepts that, now that EB-5 has taken off everywhere else in the U.S., South Dakota has lost its competitive advantage. Iberdrola pulled out, Hyperion never materialized, we couldn't get TransCanada to bite, and the EB-5 investors have much sexier projects available than our rinky-dinkery. Bollen has milked this cow dry. He's made bank, he has his new wife from the Philippines; he's ready to move on to the next scheme.
So Daugaard and Bollen agree in spring 2013 to soft-land this thing by canceling SDRC Inc's contract.
But Richard Benda doesn't like this plan. Being SDRC Inc's "loan monitor" was easy money. He doesn't want to unsuckle that teat. He didn't get as big a cut from the EB-5 fees as Bollen. He blew more of that money on his trips back to the Philippines and alimony and who knows what else. And he didn't get a cute Filipina wife like Bollen did. Joop'll go gently, but not Richard.
So Daugaard and the gang have to make Richard happy. They line him up a job with Lloyd Companies, where Benda spends his summer coming up with a TIF scheme to build apartments in Madison. Not very satisfying. So Daugaard arranges a better deal: he gets his buddy Russ Olson to hand Benda Russ's old ecconomic development sinecure at Heartland. In Madison.
Maybe it's Madison. Maybe it's having to work for Russ. Maybe it's being stuck in a position that does not offer the same opportunities for easy money as SDRC Inc. But Richard remains unsatisfied. In October, he blows his stack. He threatens to squeal if he doesn't get something that puts him on a par (because they're competing; he feels cheated!) with wealthy and comfy Joop.
There's a hard silence. Denny or Jeff or Harvey or whoever's running this show fixes a cold stare on the seething Richard. "Look, Rich. We were trying to be nice. We did you more than one favor. And you thank us how?
"Let's get back to reality. Remember those travel vouchers? We've got you by the balls, Rich. We can take it all away any time we want.
"Why don't you go home, Rich? Think about the two roads you have in front of you—and there are just two. Think about what you want, and what you want for your little girl. And when you're ready to talk about this calmly, come back, and I think we'll agree that you want to be our guy, not the fall guy."
Richard mutters something as he slinks out the door.
And two weeks later, he's the fall guy.
As I said, sheer speculation. But the facts above require some explaining. Why did you wait until September 2013 to cut Bollen off, Governor Daugaard?
What a nice bedtime story.
Governor Daugaard and Marty Jackley made a decision to keep all of this quiet and not mention anything, until Richard Benda died and the questions started coming. When the questions started coming, they sent spinmeisters like Troy out to say "there's nothing to see, move along. EB-5 is a federal program, so nothing the state can do. The only thing the state can do is seek a couple thousand dollars in double-billed travel vouchers, but Benda's dead so not worth the trouble." Heck, even Marty Jackley spun that story line personally. They have had these wagons circled since before Daugaard took over, and they're still desperately trying to guard the perimeter. The dems need to call for an independent counsel to investigate and prosecute. Mark Meierhenry? Dave Gienapp? A real investigation would lay bare the shenanigans in which the entrenched GOP officeholders are up to their necks. How much did the Joopster pay Mike Rounds after Rounds left office? Sounds like this Texas lawyer who tipped off Sen. Grassley would be worth talking to.
Wal, sweet dreams.
Ro, you ask "How much did the Joopster pay Mike Rounds"? There is the great gap in the Northern Beef Packers money trail. We need to see the books for SDRC Inc. and Northern Beef Packers so we can get some idea of the final resting place of the $167 million dollars that disappeared into NBP.
Joop Bollen sold the SD EB5 overseas as he posed as a government official for the state of SD, backed by the Governor at the time. Rounds may declare that this is a federal program, but he must have been aware that his position and title was used as a tool to make the program very official, and legitimate. I once have a friend translate a site, but here is another for example. http://www.qiaowai.net/a/fengongsi/zhuhaiqiaowai/jiaodianxinwen/zuixinhuo/20110320/1312.html
Yes this is a federal program, designed to benefit the local economies. However, because Joop Bollen misrepresented himself, the program, and misappropriated funds from the program to his personal stash o cash.
Jane, that is a fascinating link. Google Chrome translated it on my computer and it seems to confirm just what you said. Thanks!