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Bollen Misdeeds Escaped State Risk Management Director’s Attention

I'm still trying to get my head around the full import of Denise Ross's remarkable reportage linking Mike Rounds's brother Dennis to the GOED/NBP/EB-5 scandal (good grief: now on top of all the initials, we've got another Dennis!).

Denise Ross remembered that Dennis Rounds directed the state's Office of Risk Management from 2005 until the end of his brother's tenure as governor in January 2011. That job put Dennis Rounds in charge of, among other things, managing lawsuits against the state.

Hey! Darley International sued the state in 2008 and 2009, claiming state employee Joop Bollen had stiffed them on a contract for EB-5 recruiting. What did risk manager Dennis Rounds know about that?

In a telephone interview with the Daily Republic, Dennis Rounds said he did not recall the so-called Darley case, filed in California. Dennis Rounds appeared genuinely surprised when some of the details of the unusual case were recounted to him and challenged the likelihood of some of the details, including whether a state employee who is not a lawyer could represent the state in court. (Details are included later in this article.)

"That just couldn't happen," Dennis Rounds said.

Dennis Rounds said all lawsuits, once filed against the state of South Dakota are "immediately brought over to the Office of Risk Management" [Denise Ross, "Rounds' Brother Oversaw EB-5 Litigation," Mitchell Daily Republic, 2014.10.06].

Yeah, no kidding, Dennis. It shouldn't happen. The State of South Dakota Risk Management Manual says it should never happen:

If you are served with any legal documents making you a party to a lawsuit, immediately contact the Office of Risk Management. Forward a copy of all the documents you receive. Prompt action is necessary due to the fact there are only 20 days for our attorney to prepare and file an Answer in a lawsuit [State of South Dakota Risk Management Manual, updated 2012.07.18, p. 4-2].

But it did happen. Add violating state risk management policy to the pile of infractions Joop Bollen committed in his privatization of his state job running EB-5 (conflict of interest, BOR policy, unlicensed lawyering, bank franchise tax...).

Dennis Rounds's surprise, his incredulity that such a thing could have happened, tells us that Bollen's improper actions were extraordinary. Bollen's extraordinary impropriety came to light to numerous state officials in a holy-hopping-Helga! moment in January 2009. At least one of those legally well-trained officials—Regental counsel Jim Shekleton? Attorney General Larry Long?—had to realize this extraordinary behavior exposed South Dakota to risk that Dennis Rounds's office needed to know about.

And one would think that someone in that chain of risk management would have looked at that extraordinary risk and said, "That just couldn't happen! We gotta shut Bollen down!"...

...unless there was some extraordinary reward coming up that created pressure not to shut Bollen down...

...a reward like $55 million in EB-5 money in the chute for Bollen's lawyer Jeff Sveen's big turkey plant in Huron?

...a reward like ultimately $95 million in EB-5 financing to save Mike Rounds's Northern Beef Packers project?

Is that why Mike Rounds not only didn't fire Joop Bollen, but rewarded him after these extraordinary circumstance came to light with a no-bid contract to privatize his state job?

How Dennis Rounds could not notice the Darley litigation and the extraordinary circumstances surrounding it is a big question. A bigger question is why those who did notice did not get someone to remove those extraordinary circumstances—i.e., fire Joop Bollen. Nobody—Dennis, Dennis, Mike, Marty, Larry, Jim, Jeff, Tim, John—has provided a satisfactory answer to that question.


  1. Roger Cornelius 2014.10.07

    Once the Office of Risk Management receives lawsuits filed against the state, what do they do with them, file them or act on them?
    You'd think that Risk Management would have a protocol in place to respond to these type of lawsuits, they would have to know what lawsuits might have a statute of limitations, high priority to nuisance lawsuits are probably ranked accordingly.
    The Rounds family motto seems to be "I don't remember".

  2. barryh 2014.10.07

    You know my father told me several thingsgrowing up...a few of them stuck...and a few of them seem fitting in this story...

    1.1 OH Crap takes away all your attaboys!
    2. Don't crap where you eat!

    now the former governor should heed both of these has become perfectly clear that he has been crapping where he lives and to run on his record as the governor of South Dakota would be silly at this point because his record is tarnished with one of the biggest scandals in recent memory...and I would also like to add that any of the apologist that are planning on voting for the former governor have no credibility in any argument about cleaning up a business owner it would be foolish for me to rehire someone who had mismanaged my business so miserably in the past...rounds is either flat out lying about what he knew and when he knew it or he is an idiot...either way he should not be going to DC to represent the great state of South Dakota and by trying to hide this with deception and lies only makes it worse...and how dare he insult the voters of South Dakota by thinking that we are too dumb to realize what's going on...

  3. caheidelberger Post author | 2014.10.07

    That document is relevant, Francis. Interestingly, Bollen asserts in Point #9 that he was unaware there was a lawsuit, even though he filed a response in federal court to that lawsuit.

    We have not yet seen any evidence of a contract between SDIBI and Darley, only between SDIBI's partner Hanul and Darley. Where Joop definitely exceeded his authority was in signing the January 2008 contract between SDIBI and his own SDRC Inc.

  4. 96Tears 2014.10.07

    Jackley ... Jackley ... Jackley ...

  5. mike from iowa 2014.10.07

    How is it Bollen gets a free pass for pretending to be a lawyer,which he is not. Isn't that a felony punishable by ....never mind...he's a wingnut.They never have to pay.

  6. Jane Smith 2014.10.07

    These are incompetence at its finest. Please keep these clowns away from Capital Hill! If they think that they can do better than the current administration, oh please someone give them a bone to shut them up.

  7. lesliengland 2014.10.08

    just one more office in pierre we can be confidant will not do it's "checks and balances" job and silently acquiesce to the SDGOP party line.

    so glad mike is in the insurance business, understands risk management and will protect us all in DC (snark).

    whoever paid $460,000 for arbitration better be seeking recoupment for the taxpayers, from somebody who allowed joop to go crazy. Jackley, where are you?

  8. lesliengland 2014.10.08

    I keep forgetting to add the chief enabler, Gov. Dennis Daugaard. the quiet one.

  9. Bill Dithmer 2014.10.08

    Just a thought. Does the Rounds family have to have the deck stacked in their favor to survive?

    Insurance, they used someone else's money to get rich.

    Whiskey, they traded political favors to make a modern still legal. That would not have happened if brother Mike wasnt the governor at the time.

    And politics. He stumbled into office while two other more qualified GOPers canceled each other out. The elite repubs are still kicking themselves for that but eight years of power brings more chances to pass laws or keep from passing laws that would have affected his insurance business. That kind of power could go to a guys head, and it did.

    And i submit this question. Are there to many relitives of both of the last two governors in unelected, high profile offices? It seems that the brothers Rounds didnt talk even when it was their jobs to communicate for the good of the state.

    Unqualified people not doing their jobs, and yet adding a curtain of protection for Cardboard Mike and double d the big boob, seems to just be business as usual in the last twelve years.

    The people of South Dakota have been programmed to except poor state government, its a damn shame when they cant even reach the lofty goal of mideocresy. But then, thats what keeps a little blue in the all red state.

    The Blindman

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