Last updated on 2016.09.05
The hook in Denise Ross's blockbuster EB-5 story today is that Governor Mike Rounds attended a meeting in the Capitol with economic development chief Richard Benda, EB-5 czar Joop Bollen, Northern Beef Packers CEO David Palmer, Hanul Law Firm and Bollen pal James Park, and Maverick Spade financier David Kang where his South Dakota Certified Beef Program, a key to the Northern Beef Packers plan, was discussed. Kang says Governor Rounds was there simply to meet and greet, not blatantly inconsistent with his statement of ignorance of EB-5's "transactional details." Nonetheless, the Rounds campaign is claiming no recollection of this meeting.
The hammer in Denise Ross's report is financier Kang's damning assessment of Bollen's business savvy and ethics. Kang says that Bollen and Park controlled Northern Beef Packers, shut Palmer and experts out, and ran the packing plant into the ground:
Kang describes finding Northern Beef Packers in financial disarray in 2009, with Joop Bollen and Hanul's James Park running operations and having control of the plant's accounts and money.
"They were in complete control of any and all finances," Kang said of Bollen and Park. "Financially it was an utter disaster. They didn't have any of the financial records organized. They didn't work with any of the lienholders" [Denise Ross, "Source: Bollen, Lawyer in Control of Northern Beef Operations, Finances," Mitchell Daily Republic, 2014.10.17].
And while Bollen likes to puff out his chest over his urgent entrepreneurial wizardry, Kang says Bollen and Park didn't know what they were doing:
He describes Bollen and Park as, at best, inept.
"They were in over their heads. They didn't understand how to do development, construction projects, things of that nature. That's ultimately why they fell flat on their face," he said [Ross, 2014.10.17].
Kang also calls them chiselers. The $2.5-million "success fee" originally apportioned to Maverick Spade for securing the $30-million Epoch Star loan may sound like robbery, but Kang says his firm did real work to clean up the financial mess in which Bollen and Park had drowned Northern Beef Packers. In return, Bollen and Park gave Maverick Spade the brush-off:
"They had us flying here, there, South Dakota, Korea, Asia, everywhere trying to get financing. We were working in three time zones," Kang said.
Kang said once it became clear that Chinese Development Industrial Bank out of Taiwan was willing to loan Northern Beef $30 million through its subsidiary, Anvil Asia Partners, Hanul and Bollen began working directly with bank officials.
"They pretty much got what they wanted and from there said, 'Bye-bye,' " Kang said, adding that his firm had not been paid much beyond an initial retainer fee. "That is one of the many reasons why Maverick exited the project" [Ross, 2014.10.17].
A July 23, 2010, amendment to the NBP–Epoch Star loan agreement changed Maverick Spade's "success fee" to $750,000. Kang tells Ross his company ultimately received $950,000.
But even screwing vendors like Maverick Spade who brought millions into the packing plant, Bollen and Park weren't able to turn Northern Beef Packers into a sustainable business.
So maybe we have our answer to how Mike Rounds's biggest legacy project made $167 million go poof. The guys running it were bumblers... much like the Rounds campaign staff that hasn't found a working defense to the hailstorm of EB-5 news.