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Skjonsberg Uses State Position to Pour Public Money into Personal Portfolio

Campaign manager Rob Skjonsberg has had an awful time explaining away his boss Mike Rounds's foibles. Now he has to explain his own. The Nation's Lee Fang discovers that Skjonsberg used his position on the state Board of Economic Development to funnel taxpayer dollars to a company he and Rounds have invested in.

In 2012, Skjonsberg formed Lake Sharpe Investments, which invests in new companies. Mike Rounds had over $50K in Lake Sharpe Investments in early 2013. Lake Sharpe has invested in Novita LLC, a company hoping to build a plant near Brookings to produce oil and livestock feed from ethanol processing by-product. (Remember, Skjonsberg worked for Poet Ethanol.) In September 2013, Novita got a $771K grant from the Board of Economic Development. And Skjonsberg, appointed to the Board of Economic Development by Governor Dennis Daugaard in January 2013, voted for that grant.

Read that back: a guy invests in a company. Guy gets on public board. Guy votes to send public dollars to that company. Guy has a conflict of interest, right?

Conflict of interest. No member of the board or the GOED staff may participate in or vote upon a decision of the board concerning an application in which that member has a direct personal or financial interest. [South Dakota Administrative Rule 68:02:09:13].

Skjonsberg turns Republican relativist and says there's just a perception of a conflict of interest:

I am a member of a LLC. That LLC is subsequently invested in a separate fund. That separate investment fund, twice removed, has their own independent management and they make their own investment decisions. I am not fully versed on the investments, now three times removed, made by this separate fund—but nonetheless I’ve come to understand that the perception of a conflict has arisen. I’ve advised both the commissioner and the board chair that I have taken steps to ensure the perceived conflict is avoided in the future [Rob Skjonsberg, in Lee Fang, "Revealed: A New Ethics Scandal Involving the GOP’s South Dakota Senate Candidate," The Nation, 2014.10.23].

John Tsitrian sees through that relativism and challenges Skjonsberg to explain how voting for that grant and two extensions for Novita's construction delays is anything other than a conflict of interest. But we know Skjonsberg's style from the Rounds Senate campaign: he'll probably just ask to change his answer but still expect never to be held accountable for violating the public trust for his personal benefit.


  1. Rorschach 2014.10.24

    Just more of the crony capitalism practiced in SD. Surely Skjonsberg and Rounds are expected to tithe to the SDGOP and GOP candidates in return for this hefty grant of corporate welfare. What a racket!

  2. caheidelberger Post author | 2014.10.24

    R is right: the Skjonsberg story is part of a larger narrative of cronyism and corruption. The Skjonsberg investments and votes are completely separate from EB-5, yet they show exactly the same mindset: do what we want, pad our pockets, never admit wrongdoing, and treat ethics as mere figments of perception. What do we have to do to get the majority of voters to register their disgust with such arrogance and throw these people out of power?

  3. Lanny V Stricherz 2014.10.24

    Who the hell is guarding the chicken house? Where is the State Treasurer in all of this? Is there any type of checks and balances in our State? Do we need a full time committee from the legislature to watch over the executive branch? How in the hell can anyone still vote for these crony capitalists?

    This isn't brand new. One of the first was Daugaard as part time Lt Governor, getting 50 million from the State to prop up his, at that time, full time employer, South Dakota Childrens Home Society with no bid contracts. The list goes on and on, but no one says a word until some blogger like Cory or a magazine reporter uncovers the misdeeds years later, when things don't look right.

    Do we the people need to hire an ombudsman to protect our State from graft, that steals from education, infrastructure and the real duties of the State?

  4. Francis Schaffer 2014.10.24

    The documents on the Secretary of State's website doesn't list him as a member but as a manager. I am not sure what that means in Lake Sharpe Investments, I do know what in means in my business.

  5. Bill Fleming 2014.10.24

    Guys it's the SDGOP version of weath distribution. Take from the rich and give it to Rich... and Joop... and Rob... and Mike... and...

  6. larry kurtz 2014.10.24

    No crime, right? Just routine Pierre sleaze.

  7. mike from iowa 2014.10.24

    Maybe you need to challenge Jo(e) Sixpack on what he/she thinks are South Dakota values. Whitey Wingnut corruption,enriching oneself and friends,lying etc seems to be the new norm for values. Now all that is left is to find civic minded candidates who will refuse business as usual and value their word as a sacred promise. Go get 'em,boss.

  8. John Tsitrian 2014.10.24

    Pretty damn casual in the way they went about this, completely oblivious to clearly delineated ethics procedures. That this took place in '13, well after the EB-5 eruption was underway is more than disturbing. It's just plain disgusting. And Skjonsberg has the gall to call it a "perception" of conflict of interest?

  9. Nick Nemec 2014.10.24

    Skjonsberg is clearly lying and trying to minimize his part in Lake Sharpe Investments, according to documents filed with the SD Sec. of State he is the sole manager of Lake Sharpe Investments. He clearly knew what Lake Sharpe was invested in and knowingly voted to award a company he invested in 3/4 million.

    Rob Skjonsberg and Mike Rounds are long time players in the kleptocracy that masquerades as state government in South Dakota.

    kleptocracy: the government exists to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population, often with pretense of honest service.

  10. Jenny 2014.10.24

    Why aren't KSFY, KELO, and Argus on this latest scandal?

  11. Nick Nemec 2014.10.24

    Jenny, because South Dakota media outlets are in on the fix. They know how to keep on the good side of a kleptocracy.

  12. Jenny 2014.10.24

    Everybody needs to bombard the SD media outlets and demand Lake Sharpe Investments coverage. Come on people. This is your money they're stealing.

  13. Lanny V Stricherz 2014.10.24

    Nick, What a great word, kleptocracy. Wow and my spell check did not underline it, so it is actually a word. I love it.

    Won't it make us proud on November 5th. Headline in the New York Times. Republicans take control of the US Senate, South Dakota send its kleptocratic former governor to Washington to go to work on the real money.

  14. JeniW 2014.10.24

    Jenny, could it be that no one has contacted them, and/or given them enough references?

    The medias are a business, they have to cover their butts just like all other businesses do. If the source is not something they know of, or can consult, they are not going to bite. One Nation, or whatever the organization had the write up, is one they do not know and trust, or if they think it is a blog, I am not so sure that they would want to publish or air the story.

    Sometimes, too, it is a matter of "knowing someone who knows someone."

  15. Jane 2014.10.24

    Copy exactly of the way SDRC ran business, coincidental? These people need to learn some corporate ethics laws. Conflict of interest violations are grouds for termination!

  16. Francis Schaffer 2014.10.24

    Can someone please explain the source of REDI Funds, Future Funds, etc. money? I do understand it is a tax, but what tax, who decides how much? Thanks

  17. larry kurtz 2014.10.24

    "Troy Jones Jr., now a private business developer in Sioux Falls, was the finance director for the REDI program during the first loan deal with Angus-Palm. He worked closely with Calvin to put the details together and they have continued to stay in touch and at times hunt together.

    "John Calvin is a great marketer. That's how he built his business," Jones said. "I can't think of a better person (for the state post). The staff is going to love him. He's a great motivator.""

  18. Jenny 2014.10.24

    Cory, you need to drop Skjonsberg (no one knows who he is or cares) on your heading and just put 'Rounds and his Lake Sharpe Investments'. People know Rounds and need to know his Lake Sharpe Investments gig.

  19. Lynn 2014.10.24

    So when Rounds goes down he can take the rats with him?

  20. Lynn 2014.10.24

    It's no wonder these guys will deflect and do anything to protect him and work to get him elected. The citizens of South Dakota have subsidized their personal exploitation of the state.

  21. Jenny 2014.10.24

    Skjonsberg is a crook too, but we need to focus on Rounds first.

  22. Jenny 2014.10.24

    Interesing, Larry, so Troy Jones is at the GOP hog trough also. Not surprising.

  23. Lanny V Stricherz 2014.10.24

    Larry, I clicked the url and got this message.

    Error 404: Page Not Found
    We're sorry, but we can't find the page you're looking for. You might have typed the URL incorrectly, or followed a bad link. If you got here by clicking a link on our site, please let us know!

  24. Lynn 2014.10.24

    I realize the poster from Flyover Blog is anonymous but whomever this is has a great sense of humor and has been riding especially Rob Skjonsberg and the rest of Round's staff and cronies cases for a while now. This is going to be good! lol

  25. larry kurtz 2014.10.24

    Which one, Lanny? They're all are working from my rig.

  26. jerry 2014.10.24

    A very proud moment for the state of South Dakota. The past has become our future with corruption that even overshadows the territory days (no kidding). To say that the FBI is investigating is great, but don't we have any kind of law and order within the state? What the hell are my tax dollars going towards when it comes to law enforcement besides sending the country sheriff down to Pine Ridge to upset the vote. Those kickback schemes are not so much federal as they are bid rigging and the rest that goes with it. These big contractors are named in this as well. How do they get these contracts that involve public money? It all goes back to republican leadership and the way a state can be run into the ground by one party rule. This did not start with Rounds and Daugaard, this has been ongoing for decades. The only thing these guys did was to make it even more blatant with a dead guy to enunciate the huge ponzi scheme.

  27. Jim 2014.10.24

    Typically when someone claims there is a "perceived conflict" it means there is a conflict.

  28. jana 2014.10.24

    It's just classic GOP hypocrisy on taxpayer steroids.

    Out of one side of their mouth they say government shouldn't decide winners and know government bad - free market good.

    Then out of the other side they exploit their insider crony status to suck taxpayer money for their own benefit.

    These guys are hard to figure.

  29. Lanny V Stricherz 2014.10.24

    Thanks Larry, don't know why but it worked this time, when it would not the first.

  30. Roger Cornelius 2014.10.24

    I'm anxiously awaiting a press announcement from Gov. Daugaard that states he will hire a crony Pierre Republican lawyer to recover that $1.5 million welfare given to Rounds and his campaign manager.
    I know, I know, Daugaard will spend $2 million trying to recover the fraudulent grants and loans, but what the heck?

  31. caheidelberger Post author | 2014.10.24

    The SDDP's call for Governor Daugaard to kick Skjonsberg off the Board of Economic Development is spot on. This is Benda-style manipulation of GOED to put money in his own pocket. If Daugaard were serious about the things he's said about Benda's wrongdoing, he'd already have canned Skjonsberg. But no: this administration apparently only has the guts to hold dead guys accountable.

  32. caheidelberger Post author | 2014.10.24

    Are you kidding me, Pat Costello? The GOED boss says there is no conflict, because Skjonsberg doesn't have a "direct" interest? How direct does an investment like this have to be? Novita gets money, his investment portfolio improves—what am I missing here?

  33. Roger Cornelius 2014.10.24

    If this isn't a conflict of interest in South Dakota government, what the hell is?

  34. Jana 2014.10.24

    This is just another example of how the GOP establishment views the state and taxpayer dollars as their own little playground to make money for themselves and their friends.

    Get DD on the record with this one...I would hope he would be outraged!!!

  35. Francis Schaffer 2014.10.24

    So a lawyer determined it wasn't a conflict of interest? So what, lawyers can be wrong, too. Did the lawyer have a conflict of interest? How stupid do they think people are?

  36. Dr. Math 2014.10.24

    I feel like there are a lot of lawyers in SD that are consistently wrong and very corrupt. It makes me wonder if we are only the 8th most corrupt state in the nation or maybe our ranking should be in the top 5.

  37. jerry 2014.10.24

    The SDGOP says Mike Rounds is in the clear because there is not an investigation on the EB-5. The FBI chimes in and says hold on there partner, there is an investigation. So now they say the FBI is in cahoots with Weiland. So much for law and order.

    Then these guys say that if you are in charge of a taxpayer funded program that makes you and the governor money on the side, that is not a conflict of interest because we say so. On the playground, kids make stuff up all the time. In real life, this made up nonsense steals money. The republicans have been doing this and getting away with it for decades, it is that now when they get caught, they say you really did not catch them at anything and please go away.

  38. john tsitrian 2014.10.24

    Per this site (and another one called Manta) that is a business directory of sorts, Lake Sharpe Investments has 2 employees who work at 117 E. Capitol Ave. in Pierre. Street view (I'm not very good at working google maps, maybe somebody here can get a more definitive look) looks like an aging building with a street level row of retail fronts. William M. Van Camp is listed as the principal.

  39. jerry 2014.10.24

    Dr. Math, the whole system here is corrupt with the only way to get some walking around cash is to be a bigger crook than the state government. Any time you can lie and cheat these crooks, the better because this is the game they teach. As there really is no law here, you can do as you please, just find the funding sources to stay doing them. Here is one fellers way of giving the state and the city the big finger

    The state steals from the federal government so they do not have a real legal stance on much of anything. Cliven Bundy did the same thing to the Fed. If they come on your land get some buds to have some buds with you and run them off. Of course, you must be white to really get the job done.

  40. Jane 2014.10.24

    These self serving public figures think the public is...not smart enough to see it for what it is. Blatant fraud, conflict of interest, gross abuse of authority and public trust. It's the bipartisan public who needs to teach them a lesson.

  41. Jenny 2014.10.24

    You guys should watch Lalley on 100 Eyes try to get answers out of Daugaard on the EB-5. Daugaard was saying saying he didn't recall talking to Benda and not considering him going to work for EB-5 that much of a conflict of interest. Lalley seemed really surprised with a slight frown and asked Daugaard again about conflict of interest and asked if maybe there should a state law on that. Daugaard said that these guys need jobs when they quit working for state govt. Seriously. This was Thursday's 100 Eyes show.

  42. tara volesky 2014.10.24

    A source tells me Skjonsberg is Mike Round's nephew.

  43. Jenny 2014.10.24

    Then Lalley asked about teacher pay being so low and if there should be more leadership on promoting higher teacher salaries to local counties. Daugaard didn't really answer the question. What an embarrassment for SD teachers to have a governor that doesn't give a #$&% about promoting higher pay.

  44. Jenny 2014.10.24

    Is that true that Skjonsberg is Round's nephew, Tara?

  45. grudznick 2014.10.24

    I thought Mike Rounds was Skjonsberg's stepson.

  46. grudznick 2014.10.24

    I heard that Susan Wismer is Ron Volesky's love child.

  47. jerry 2014.10.24

    Geesh, who gives a care if they are related or not, they are united in crime and graft, that is all that matters. I think we can agree that they both share the same criminal dna.

  48. grudznick 2014.10.24

    Sorry. One of Ron Volesky's love children. And none of that matters in Myer's election. I just wanted to point that out.

  49. Jenny 2014.10.24

    To me that looks even worse if Skjonsberg is Round's nephew, Jerry.

  50. Roger Cornelius 2014.10.24

    Has Troy Jones been connected by employment or investments to any company that has received a REDI Fund loan or any other state loan and/or Future Fund grant?

  51. Troy 2014.10.24

    Answer the question Larry. You like innuendo and character assignation.

  52. Roger Cornelius 2014.10.24

    Good find Jenny, so Skjonsberg got a bunch of free state taxpayer money to donate to the Republican Party. And the Rounds Republicans say they aren't corrupt. Whoa!!

  53. Roger Cornelius 2014.10.24

    Troy, who was it that kicked Mike Rounds off the Rosebud Reservation on Columbus Day because of his position on Keystone XL? Name them please.

  54. jerry 2014.10.25

    I dunno Jenny, it seems like when you are related to Rounds there is never any kind of conversation even at family gatherings. So by having Skunkendorfer as just a mutt that is a soldier in the crime family rather than a blood relative, makes more sense in that they can converse. I remember reading an article regarding a brother in law of the little weasel. Rounds said that they did not converse on any matters at that holiday meal. Imagine that! A whole day of yams and taters and narry a word about anything. What dysfunction. So Skunkendurfer would have to be on the outside of dna family and only connected with the criminal family, a much better position for the Skunk of course to converse with the weasel.

  55. jerry 2014.10.25

    Roger, I think Dick Wattaham kicked Rounds off the Rosebud.

  56. jerry 2014.10.25

    Here is something from Utah regarding that states turn about in offering Medicaid Expansion. They seem to site a good business decision, who would have thunk it that a good business decision would make any sense. Of course, a good business decision here in South Dakota would only entail something that was criminal in nature and only geared towards making the higher ups in the ponzi scheme wealthy, Here is Utah with their good news for all the folks suffering there.

  57. mike from iowa 2014.10.25

    Francis S -lawyers determined waterboarding was not torture.

  58. mike from iowa 2014.10.25

    Flyoverwire (talking about Skjonsberg and Round's SIL Justin Larson) said one was born into corruption in Pierre and the other married into it. I guess that would mean Skjonsberg is a blood relative of Rounds. RS does say he was born to a single Indian mother.

  59. lesliengland 2014.10.25

    republican lawyers. big difference

  60. Jenny 2014.10.25

    Can't you answer the question, Troy? Lawyer must have told you to shut up?. You and your frat boys have an awful lot of explainin' to do and you know it.

  61. Jenny 2014.10.25
    Richard Sattgast is the state treasurer crook and has been since 2001. Is SDs state treasurer appointed by the governor? Everyone, we should demonstrate like they do in that kooky state next door (MN) and demand answers. Flood the state offices with emails, carry signs outside the Pierre Capital and state buildings, outside KSFY, Argus Leader. This might be the only way to get answers.

  62. Jenny 2014.10.25

    Cory and fellow Madvillers, I think you would find this interesting, and I think in SD this could be done here. DFL MN State Auditor (they call it Auditor here instead of Treasure) Rebecca Otto won election in a landslide over Republican Pamela Anderson in the Pawlenty administration after finding 180 million dollars of errors

  63. jerry 2014.10.25

    Sattgas should have endorsed a Beano to relieve himself of the burden of Rounds.

  64. Jenny 2014.10.25

    Patricia Anderson I meant (LOL).

    Anyway, we ought to be able to expose errors like MNs Otto did! Maybe if we can find it on paper we can get these crooks voted out. I can get ahold of Rebecca Otto if you want me to, and have her explain to me how she found these errors.

  65. Jenny 2014.10.25

    Wouldn't it be nice to have a State Treasurer like MNs Rebecca Otto to for a Watch Dog? SD deserves better than the same old GOP Frat Boy Crooks that just keep getting more corrupt every year.

  66. Jenny 2014.10.25

    Wouldn't it be nice to have a State Treasurer like MNs Rebecca Otto for a Watch Dog? SD deserves better than the same old GOP Frat Boy Crooks that just keep getting more corrupt every year.

  67. Jenny 2014.10.25

    Sorry, you can delete one of those, Cory.

  68. 96Tears 2014.10.25

    Costello is another Rounds clown who found a lawyer in Marty Jackley's office to agree with the Rounds/Daugaard idea of fleecing government for their pals. Must be "Lie Your Way out of the Mess Week" judging by Rory King's column in today's Argus claiming all these negative news stories are wrong and Mike Rounds is pure as the driven snow:

    And in today's Rapid City Journal, Rounds ignores Sen. Johnson's correction to Rounds' earlier lies about Weiland and the B1-B program at Ellsworth. Rounds insists his attacks on Weiland are correct:

    The glass-jawed Mike Rounds appears to be one of the most vicious little liars to ever grace a South Dakota ballot.

  69. Jenny 2014.10.25
    Steve Barnett is SDs state auditing crook. I'm sure he's related to Mark Barnett. Be sure take time to send emails to all your state crooks now.

  70. Lanny V Stricherz 2014.10.25

    Jenny as you pointed out with a later post, we have both an auditor and a treasurer in SD. Who releases the money? I would presume the treasurer. On whose authority? that is the question that we need to have answered.

    If we are going to email these two entities, I would hope that one of the brighter, attorney types that are on this blog, could give us an idea of what type of questions we want to ask, so as not to get stonewalled.

    Steve Barnett's website lists the following: Checks and Balances:

    Computer technology has permitted many efficiencies in the Office of State Auditor during the first century of
    South Dakota, but the constitutional mandates developed in 1889 in making the Office of State Auditor responsive
    to the voters as the "checks and balances" of state government has remained the same.


    To pre-audit all claims against the state, issue warrants, administer state employee payroll, record and monitor all fund balances and all fund transfers; to reconcile fund balances and submit numerous reports to agencies on the state's financial condition as set forth by the rules of the State Auditor, the State Board of Finance, and of other state agencies; to deposit with the Internal Revenue Service, the social security and federal income taxes withheld from employees of the state of South Dakota and the state universities in a proper and timely manner; to audit and correct all wage data and social security records of the employees of the state of South Dakota, state universities, and 740 governmental subdivisions, including counties, cities, school districts, townships and water districts; and, to serve as a repository for W-2s for state employees.

  71. Jim 2014.10.25

    Costello should have resigned or been fired last September. Who is the staff attorney who tortured the definition of "direct financial interest"? Robs fortunes sure have changed from in 2002 when he claims he was living in his car when he met Rounds. Those two are about their own enrichment for whom politics is a business and good governance is simply a claim made during campaigns to keep their business afloat.

  72. Douglas Wiken 2014.10.25

    Don Rounds was a lobbyist most of his life I think. Mikey learned that it was possible to grub money out of government and government relations at his father's knee. Entitlement is the golden child's middle name if we take the Mobridge editorial seriously. Government is an industry ripe for exploitation apparently to the whole famn damily.

  73. Jana 2014.10.25

    Does the lawyer who gave Pat Costello have a name?

    Follow the money!

  74. mike from iowa 2014.10.25

    The NRA endorses Mike Rounds. Does that mean they both condone school massacres?

  75. jerry 2014.10.25

    Of course the NRA supports and condones school shootings as long as they are not committed by Blacks. They are still setting on the fence with this Native American thingy and don't really know how they are gonna pull their heads out of their behinds to say anything, so we will hear crickets.

    The cop killings along with bystander killings yesterday are met today with silence from these bottom feeders. The NRA is a terrorist organization with political affiliations, simple as that.

  76. jerry 2014.10.25

    Something else about the NRA and Rounds, both like the idea that Benda was taken out with a shotgun. These two mutts go together like peas and carrots.

  77. Francis Schaffer 2014.10.25

    Jana, of course he has a name, but he didn't but his opinion in writing.

  78. Jana 2014.10.25

    You are right Francis, so either he/she comes forward and defends their guidance or Pat Costello tells us where he obtained this piece of legal counsel.

  79. mike from iowa 2014.10.25

    It seems patently obvious Skjonsberg wasn't conflicted at all to advance his and Rounds interests.

  80. Jana 2014.10.25

    Here's the GOED Board. Some familiar names and donors helping Mike and Rob out.

    Just have to wonder if they have destroyed the minutes of that meeting.

    Jeff Erickson, Sioux Falls
    Tim Kessler, Aberdeen
    Dale Clement, Rapid City
    Tom Burchill, Sioux Falls
    Sharon Casey, Chamberlain
    Tony Klein, Pierre
    Greg Heineman, Sioux Falls
    Mike Luken, Watertown
    John Calvin, Watertown
    Don Kettering, Yankton
    Ted Hustead, Wall
    Pat Prostrollo, Madison
    Rob Skjonsberg, Pierre

    I wonder if the gang of 12 were aware that Rob was voting on something that would enrich himself?

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