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Wismer Summarizes Sins of EB-5 Scandal

I can understand why Mike Rounds has trouble keeping his story straight on his EB-5 scandal: even we voters have trouble keeping track of all the ways that he let Joop Bollen abuse South Dakota's regulations, trust, and good name.

Democratic gubernatorial candidate Susan Wismer fulfills the stateswomanly duty of a candidate to educate voters by offering her summary of what went wrong:

Over the past weeks, more information about EB-5 has been released. Most recently, the Rapid City Journal delivered the disconcerting news that Governor Rounds did not provide the entire truth in his written testimony.

There are many layers and moving parts to EB-5 and the controversy surrounding it. As I talk to people across the state, I receive many questions about what’s going on and why we should be worried. Here is my answer.

We’ve learned that Joop Bollen misrepresented himself to the state. While he was a state employee, he signed a contract with his own company, SDRC Inc., and had someone else sign as a director for his company. The contract assigned rights to conduct the EB-5 program on behalf of the state. The problem is that he had no authority to sign that contract on behalf of the state of South Dakota. He did not tell his superiors that he was signing a contract with his own company.

Starting in 2009, Bollen conducted the EB-5 program until Gov. Daugaard cancelled his contract last year. By our calculations, Bollen collected approximately $140 million in fees from foreign investors. In other words, foreign investors each invested $500,000 but then also paid a service fee of $35,000 and another type of fee of $50,000 plus an annual fee based on a percentage of the total investment. Those fees added up over time to $140 million.

From what we can tell, Bollen didn’t have permission from anyone to sign the contract. Governor Rounds, Governor Daugaard, and the Board of Regents have explicitly stated that many times. He just signed it, didn’t tell a soul, and then stayed on the state’s payroll.

To add to it, Bollen got into legal trouble. When he incorporated SDRC Inc., he also decided to exclude a party on the west coast from participating in investor recruitment. That party sued him, and he told them to sue the state of South Dakota instead. South Dakota was left with the mess and has been paying legal fees since 2009. Over the last 10 months alone, the legal bills have exceeded $250,000.

There is a great deal of work to be done to right these wrongs. Without a bipartisan effort, we won’t get far. I challenge my peers on GOAC to work with me and find the answers South Dakotans deserve [Rep. Susan Wismer, press release, 2014.10.02].

Notice that Rep. Wismer doesn't phrase this as a campaign speech. She doesn't conclude with a call to voters to throw the bums out. She doesn't attack the incumbent Governor Daugaard whom she's trying to unseat. She focuses on the violations that occurred and on fulfilling her current duty as a legislator on the Government Operations and Audit Committee to get answers for the public.

That focus is either admirable or crazy; a campaign manager would say the latter and tell Rep. Wismer that she needs to conclude every paragraph she utters for the next four weeks with, "...and that's why you vote for me for Governor."

Folks who look at the facts of South Dakota's EB-5 program understand that electing new leadership and restoring oversight and a true balance of power in Pierre is essential to preventing the corruption the EB-5 scandal epitomizes. Rep. Wismer effectively summarizes the facts we know so far, and should be reciting those facts to every group she speaks to for the next four weeks.


  1. JeniW 2014.10.03

    I just completed my absentee ballot, you can accurately guess who I voted for, and the name does not include the letter "D." :)

    BTW folks, there is a long list of judges to vote for. There are also three issues, minimum wage, insurance providing for provider of choice, and "games" at the Deadwood casinos.

    There are also other candidates running for office. Be prepared to spend some time voting, or get a sample ballot to mark before you go to vote.

  2. Lynn 2014.10.03

    Thank you JeniW! I'll be doing early voting next week and am excited to do so.

  3. mike from iowa 2014.10.03

    Nitty Gritty time,Folks. It is staring you right in the face,like a turd in the collection plate. You know who the crooks are,question is-what will you do about it??

  4. PNR 2014.10.03

    I think Wismer does a good job of summing things up, actually.

    She is to be commended for her honesty, in my opinion - she is not making something up where there is nothing to be made, but she is pointing out some of the real flaws and issues involved. Balanced, honest, and not grand-standing.

  5. 96Tears 2014.10.03

    From Wismer's summation, it looks like Marty Jackley has had the information he needed a year ago to file several felony charges against Joop Bollen.

    You may recall that Jackley failed to tell the people of South Dakota until July 28 that he drafted three felony embezzlement charges in early October and ordered a grand jury to pursue Richard Benda's theft of $550,000.

    But what Wismer outlines here is the theft of $140 million and perhaps many cases of fraud in the transactions for EB-5 payments and transfers. That blows the doors off of anything Benda was accused of. Does this mean Jackley kinda forgot to tell the GOAC and the people of South Dakota that he has had a much bigger fish on the line than the poor fallguy who happened to die a rather violent, mysterious and convenient death in a Charles Mix County shelterbelt?

    So, why isn't there more focus on Jackley's very serious political gamesmanship for more than a year now?

  6. lesliengland 2014.10.03

    96, I'm thinking Jackley did nothing to preserve evidence and now to protect himself Daugaard is trumpeting "Archive Month" or whatever, pointing at both Rounds and Jackley as guility parties, the former lt. gov. implicitely saying "it wasn't me!"

    In the mean time neither Rounds or Jackley do their jobs, they just socialize at ALEC state paid travel events ect., working only on matters that support their own GOP re-election like right to life lawsuits, pro-KXL activities and pro-urainium tactics ect. You can dress it up as a fancy term most don't understand-"crony capitalism"-to fit a myriad of other silly neo-theories, or just call it criminal.

    Daugaard does it too, his criminal justice reform is just so he can manipulate voters who want to be "hard on crime".

  7. lesliengland 2014.10.03

    jeniW-what is with the MD's measure 17? What does that serve??

  8. JeniW 2014.10.03

    I try to sum it up the best to my knowledge.

    Let's say that my employer's health insurance through Avera. Avera wants me to use their providers. I however, want to go to a provider at Sanford's. I have been going to the Sanford provider for a while, and do not want to change providers.

    As it is now, Avera can refuse to pay for a Sanford provider. If I decide to go to the Sanford provider anyway, I have to pay all, or most of it, out-of-pocket.

    Measure 17, if passed would require Avera to pay to the Sanford provider.

    It is not just a Avera/Sanford deal. Some insurance companies require people to go to providers in a certain network.

    The proponents of Measure 17 argue that people should have a choice as to who they want as providers. Those against Measure 17 argue that paying outside a network will drive up the costs.

  9. bearcreekbat 2014.10.03

    leslie - don't forget Jackley's efforts to stop South Dakotans from receiving any of the benefits from the ACA.

    BTW, do you still have that great vintage Strat?

  10. jerry 2014.10.03

    JeniW, we already can go to the Avera doctor or the Sanford doctor or any doctor at present if they are in the vast networks that are presently available. The ACA would not approve any of the plans without the access to the doctors and hospitals in the state. Imitative 17 is a money grab for doctors. You see each insurance company has an agreement with providers that they address the patient in a cost efficient manner. 17 would mean that instead of one visit, you may need three and thereby drive up costs. There is a reason this failed in the legislature, it was even to corrupt for them.

  11. JeniW 2014.10.03

    Thank you Jerry for sharing your perspective. I just tried to share my perspective of what I thought the Measure consist of.

    I did provide a link for what appears to be a more objective explanation.

  12. Roger Elgersma 2014.10.03

    The reason to give written testemony is so you do not get asked a question you did not expect and then accidentally say something you did not want to in a verbal questioning type of hearing. So when Rounds gets a chance to be real careful obout how he says things he still is not capable of giving a right answer. Did he think he could get by with lying. Maybe he is just so totally incompetent that he had been in Pierre for decades and still does not know what is going on there. I will not vote for either a liar or incompetence.
    At the end of Rounds term as gov he stated they they had learned how to regulate the water in the dam next to town. They had a number of years of drought which is normal in SD and then two years of rain. So in those two years of rain the water level went up. So the next year it rained again and they did not know the water would go up again. Now they think Daugaard was so good for building a levee when the water came to fast. If they had learned that rain makes the water go up in the dam they would have asked the corps of engineers to let some water go before the spring thaw. But no, they blindly thought status quo would be good enough, typical conservative thinking, and did nothing till eminent disaster was coming. Would the Republicans do anything at all to stop the flow of to much beer coming into Rosebud from Nebraska? Or is it just their rich friends in the capital area that get some help in an emergency.

  13. mike from iowa 2014.10.03

    Roger E,the problem with whitey wingnut and science is Fake Noise talking points doesn't explain science to them,only that floods are caused by liberals and taxcuts for the wealthy will stop a flood in it's tracks. If it is Winter,substitute blizzard for flood and blame libs etc.

  14. lesliengland 2014.10.03

    jackley and daugaard are deeply involved in the EB5 SDGOP coordinated cover-up of probable criminal activity.

    bcb also advises the AG actively thwarts the ACA.

    Another here reminds that the governor that Susan seeks to replace is a global warming/ climate change science denier.

    will a majority of voters yawn and vote republican?

  15. SDBlue 2014.10.03

    I still have a hard time believing no one knew Bollen signed a contract with his own company.

  16. Jana 2014.10.03's not just hard to's impossible!

    Let's just hope that the evidence hasn't been buried like Mr. Benda.

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