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Deposition: Bollen Too Good for the “Bureaucracy”, Dodges Contracting Rules

Among the absurdities revealed by Joop Bollen's April 16–18 deposition is the EB-5 czar's haughty disdain for following the basic rules of contracting with private vendors.

First, some background (I know, it's maddening, but the EB-5 scandal is complicated!):

Darley International sued to force the South Dakota International Business Institute into arbitration over a contract dispute. Darley signed a contract with the Hanul Law Firm in October 2007 to recruit EB-5 investors in China for South Dakota projects. Darley alleged that Hanul failed to deliver recruitment documents that the contract demanded at a December 2007 EB-5 recruitment trip to China. Bollen incorporated SDRC Inc. in January 2008 to take over the lucrative recruitment duties specified in the Darley-Hanul contract. Darley went after Bollen's SDIBI because Darley perceived Hanul to be SDIBI's partner in managing the EB-5 program and because SDIBI chief Bollen had been in contact with Darley boss Robert Stratmore and appeared to be aware of and participating in the negotiation of the Darley–Hanul contract.

Now the fresh meat and potatoes:

One fact that saved SDIBI from facing a breach-of-contract ruling is that SDIBI had no written contract with Darley or Hanul. Even though Bollen had been pals with Hanul boss James Park since a fortuitous meeting in Korea in 2004, Bollen never firmed up the SDIBI–Hanul relationship in writing. In the April 16, 2014, deposition, Board of Regents attorney Chaka Okadigbo tries to suss out why not:

[Okadigbo]: Okay. Did James Park at any point ever ask you for a formal written agreement between SDIBI and Hanul?

[Bollen]: Very early on, but I explained to him the constraints that I was operating under and he understood those [Joop Bollen, deposition 1, Darley v SDIBI, April 16, 2014, p. 17].

Constraints? What constraints?

Bollen explains that, when South Dakota's EB-5 regional center was one of the few in the nation, he received numerous contacts from recruiters angling for a profitable contract. He forwarded those contacts on to Hanul for James Park to handle (and yes, you should start wondering whether Bollen did any work at all in his state job).

The reason why I connect them to Hanul is because of the constraints I'm on, under, I cannot sign agreements with outside entitites. Hanul is a seasoned law firm that knew my constraints and knew how to work with my constraints and still produce for the State of South Dakota [Bollen, 2014.04.16, p. 22].

Bollen repeats similar lines about "constraints" on pages 23, 27, 28, and 35. These assertions make no sense. A state agency like SDIBI can make written agreements with private contractors. That's how the Board of Regents, who technically employed Bollen and housed SDIBI, builds stadiums. That's how the Department of Tourism, which in the Rounds Administration was also technically Bollen's boss, gets super-slick promotional materials worth millions of dollars from advertising firm Lawrence & Schiller. If vendors want to provide services to the state, the state hands them the state vendor manual, puts out bids, and writes a contract to the vendor who offers taxpayers the maximum value.

But on page 60–61, Bollen finally makes clear his perception of the "constraints" that prevent him from operating like every other state employee:

[Okadigbo]: While you were SDIBI director, what was your understanding of what you needed to do if you wanted to get a written agreement in place?

[Bollen]: I wouldn't even go there because it doesn't work in the system, so that is not something I would even attempt to do.

[Okadigbo]: Okay. And just so that we understand, why wouldn't you attempt it?

[Bollen]: Because it's a bureaucratic -- my job was doing very entrepreneurial things in a very bureaucratic environment, and a typical bureaucrat is not going to sign off on the kind of activities that I was instructed to do, so it would become bogged down in the system by people who would rather not make any decision at all.

[Okadigbo]: Okay.

[Bollen]: And therefore there would be too many time delays before it would be practical, become practical [Bollen, 2014.04.16, pp. 60–61].

In case Joop's accent throws you off, here's the translation: The things I've been instructed to do can't wait for the dopes at Northern and in Pierre. I'm far too important to follow their rules.

(Remember, the oh-so-hurried and self-important Bollen is the same guy who told Chinese investors there was nothing wrong with investing in a beef plant that was taking years longer to build than originally planned.)

Rather than submit to the laws and rules that every responsible state employee accepts as necessary safeguards of public dollars and public trust, Bollen looked for partners like Hanul who would help him dodge state oversight by doing business on a wink and a nod. When the state became aware of the Darley litigation that Bollen tried to conceal from them, the state could see Bollen's arrogance and corruption. Yet rather than acting on its obligation to hold every state employee accountable to the public, the Rounds Administration rewarded Bollen with a no-bid contract and even greater opportunity for unsupervised profiteering.

South Dakotans, Joop Bollen told us and our rules to jump in the lake. And Mike Rounds said, "Heck of a job, Joop! Keep up the good work!"


  1. mike from iowa 2014.10.17

    Well,Rounds had a wingnut business plan to follow. See bush 43 and haliburton/kbr,etc. Reward malfeasance,corruption,cost over runs.

  2. lesliengland 2014.10.17

    well, now we know why Regents would not release depo. and ALL OTHER EB5 DOCUMENTS AND FILES. they would look incompetent, at the very least.

    wonder what ole' jooper means by seasoned? hmm

  3. Susan 2014.10.17

    Joop doesn't want to deal with contracts - until he formed his own corporation and wanted contracts in place for his benefit.

  4. mike from iowa 2014.10.17

    Bollen was instructed to do things by people who wouldn't sign off on what he was doing for them? Is Bollen the victim now?

  5. Rorschach 2014.10.17

    If Bollen, in his state job, couldn't sign contracts with outside entities - then how could he sign the contract on behalf of the state with his own company SDRC, Inc? He signed that contract in his role of state employee and had his lackey James Park sign on behalf of SDRC, Inc. There goes that claim. Buh Bye. The Joopster's deposition is a work of creative fiction.

  6. Francis Schaffer 2014.10.17

    I did not know following the law was a constraint, oh yes I did, it is what makes us all equal. Glad to see that Joop has revealed he and those like him are better than the rest of us. Do you suppose his conscience was a constraint?

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