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].
Kang's statement confirms what we've seen in subsequent contracts with NBP in which Bollen asserted control over the project and forced them to spend money to suit his wishes.
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.
According to this article, Bollen and Parks "were in complete control of any and all finances" and "financially it was a disaster."
Question:
Rory King was the attorney for Northern Beef Packers from conception.
Where was Mr. King when "everyone else was shut out" and Bollen and Parks were "in over their heads and why they fell flat on their face."
If Bollen and Parks were in complete control of Northern Beef Packers, did Mr. King then answer to them? If not, then who?
Cory have you tried to interview Rory King yet?
Always always, it is with the lawyers. As South Dakotans can clearly see, the Rounds Daugaard operation could not run a business either private or public. It is of little wonder that the two of them have caused great harm to South Dakota and her taxpayers. Toss the bums into the street and clean up the da place. Speaking of lawyers, it is long past time for a special prosecutor to be assigned to this to save our assets.
A coherent account of all the people involved in the NBP disaster has yet to be compiled, and it would include its failures in Huron and Flandreau. But the consistent aspect is the many people, especially law firms, milking and bilking the operation for all it was never worth.
If this guy releases the financial documents (I'm pretty sure he still has) then we might get to the bottom of this
Shirley, Rory King is on record for saying that Richard Benda did not embezzle that $550,000 from the state. Do you think a lawyer that profited from the EB-5 scandal would want to talk?
Rounds lied. He lied badly. He lied often to voters in the last 12 months. Even Craig Lawrence scribe David Montgomery can get this: Mike Rounds IN THE ROOM with the deceased Richard Benda, partner Joop Bollen, NBP's Dave Palmer, Joop's co-signer Jim Park and Maverick Spade's Dave Kang. The Rogues Gallery of the Mike Rounds Racketeering Scam.
Again, I'm beginning to think the least important actor in this crime drama is poor Benda, who Rounds throws under the bus every chance he gets.
Rounds will even celebrate his birthday on the first anniversary of Mr. Benda's violent, mysterious death. They really do expect South Dakotans to let them get away with their racket.
No Roger I do not.
But anyone living in Brown County, South Dakota over the past years know Rory King was the (public) legal mouth piece for Northern Beef Packers.
Shirley, Rory has as much to protect as Bollen, Sveen, and the other hoods.
Shirley, do you know if most of the people in Brown County, and more specifically Aberdeen, think that the slaughter house will open anytime in the near or distant future?
EXCELLENT REPORTING denise and cory, especially given the cover-up and delay/distraction from the Daugaard administration, Regents, ect. South Dakota owes you our gratitude.
You are totally correct Roger.
And the fact that Mike Rounds is having a birthday bash on the first anniversary of Richard Benda's death speaks volumes. Bob Mercer was correct. You just can't make this stuff up.
JeniW- I think the answer to your question, at this point, is the majority of people in the Aberdeen community do not think it will reopen. Yet some may remain optimistic and hopeful that it will.
Regardless, most are frustrated and disgusted with what has happened to the community as a result to the failure of NBP.
Shirley, what about Joop up there in Aberdeen? Do the good people there believe he'll ever sit in jail someday?
Jenny - very good question.
What the people of Aberdeen may observe is Joop Bollen living on North Main Street in a beautiful home located in the Historic District of Aberdeen along with owning many rental properties in town.
Bollen can also be seen driving around town in his little sports car and working out at the Y.
From all appearances, it would seem Bollen does not have a care or concern in the world.
But then why should he? He has become untouchable and that seems to be the thoughts of many of the residents of Aberdeen.
Bollen has only one care right now, stay the hell out of South Dakota until at least the election is over. He has received his marching orders from the capo, Rounds and his consigliere, Jackley.
Shirley if you read the Aberdeen American News today in regards to Bollen it lists him as formally from Aberdeen. Evidently it looks like they are painting the inside of the house getting it ready to sell as told from a neighbor.
Where Bollen is now I have no idea.
Good news for Bollen regarding his place of visit now. All he has to do is go to Indonesia and he cannot be brought back to the United States, Jakarta is lovely I am told and cheap.
You really think he would pull that, Jerry? The FBI is probably watching him.
Lynn, I'd love a photo of the home improvement... and a clip of the real estate listing, if it comes up.
Jerry, are we sure Rounds is giving Bollen orders? Could it be the other way around, that Bollen or maybe Sveen have Rounds by the tail? Or is it Mexican standoff time?
Hollywood really needs to get ahold of this, it just has all the fixin's of a juicy political corruption movie .. I think having it portrayed Fargo style (remember that movie) would go over well. Who knows, It might make South Dakotans mad and embarassed enough to finally vote some Dems in to clean house.
If anyone has ties to Hollywood, they really should send this true crime story over to them. Danny DeVito would make an amusing Rounds. Hmmm, I think Charlie Sheen would make a good Joop.
Jenny,
Kevin Spacey could do a mini-series on EB-5, South Dakota style House of Cards.
Yes, I think Spacey would find this story amusing and appealing.
It looks like Marion wasn't the only one who knew nothing about the transactional details!
Substitute dumbass dubya and wingnuts for Bollen and Park in headlines,then replace Northern Beef Packers with U S economy and that would encapsulate the 2000s.
"Why would anybody want to put investors in a project that has a very high probability to fail? That would be completely unethical." —Joop Bollen, Deposition 3, Darley v. SDIBI, April 18, 2014
Cory, setting companies up to fail and gutting them out is what companies like the one Mitt Romney (Bain?) runs do all the time. Private equity 101. Load them up with debt, write themselves big checks, and then hand out the pink slips, break it up, and sell off the pieces. More and more it looks like maybe that was what Joop was up to.
http://en.m.wikipedia.org/wiki/Private_equity
You're probably right Bill and that would account for the skimming the cream off the top of $167 million invested in Northern Beef. It keeps looking like that this was Benda and Bollen's plan all along. I just can't shake that feeling.
Cory, I find it very convenient that Joop can talk about ethics when Richard Benda isn't here to confirm Joop's facts. What about signing a contract with your own company - just goofy or unethical. Was he teaching the business ethics class at NSU?
What would Bollen care about ethics?He risked nothing and stood to gain tens of millions of South Dakota dollars.
There are so many questions and some of the answers we will never know but with the anniversary of Richard Benda's death was he following instructions from Bollen or higher up and did he feel when things were going down he was going to be betrayed, completely thrown under the bus and decided to end it? I would think his family would want to know. What a tragedy!
Money Boo Boo took over Bain Capital with the stipulation none of his personal wealth was at risk.
David Newquist looking back when Northern announced the new International Business Institute and with Joop Bollen I don't ever remember Joops publicized job was to help recruit businesses in this way(EB-5) to South Dakota. I thought it was to help students pursue opportunities in International Business and be a bridge with trips overseas and making contacts that would compliment the school of business. It was mostly academic and not actual economic development. I was out of state most of those years to properly follow but still it really seemed to go off the rails from it's original mission as I understood from press releases.
Francis, I'm wondering if maybe Rounds is guilty of governmental malpractice for not getting involved in the transactional details. He could see NBP, his baby, wasn't getting built and was running over budget. He met Kang, the guy who could have told him, "Hey, Joop and Jimmy Park are screwing this thing up." Why didn't he intervene?
And then Bill reminds us of Romney, Bain, and equity games. Why else would you box out a CEO and experts who purportedly know how to make a beef plant work? Why else would you let SDRC Inc. bleed available capital from the plant? Why else would an outside firm like White Oak Global float all that cash to support a limping project, other than to set themselves up to acquire the asset later for pennies on the dollar?
Cory, all good points and questions. How about this, they are incompetent?
Incompetent or corrupt, I'm not hearing the explanation that says, "Hey, vote for me!"
Readers, which do you think is more plausible: NBP sank because underlings took advantage of his incompetence and inattention, or Rounds actively participated in the scheme to benefit himself and his cronies?
Yes, that is a great point. How did the situation with NBP and EB-5 hide so long? Someone was providing cover. Lawyers, politicians and government officials?
I have a process question that maybe someone can answer. So the original foreign investors lost their venture capital and their opportunity to get permanent visas because the company folded. Now the plant, I believe, is listed again as an opportunity for new investors, still available via EB-5 presumably. I'm wondering, do the old investors stay attached, green-card-wise to the project, and will they still get their green cards if the new deal pans out? Or are they completely out of the loop?
Bill F-here is a tale of two dairy farms,one failed,one new,same investors and a bad outcome all around for the investors.
Two Dairy Farms
They put $2.5 million into a South Dakota dairy farm that went out of business while their funds were in escrow, and reinvested in another dairy farm marketed by the same regional center, now called SDRC Inc., according to the suit. USCIS denied their green cards, saying they should have reapplied before giving the second farm money.
USCIS has agreed to reopen their cases and they’ve put their complaint on hold, their Miami-based lawyer, Ira Kurzban, said. USCIS officials declined to comment on the suit.
Joop Bollen, president of Aberdeen, South Dakota-based SDRC, is a defendant in a civil case filed in federal court in Sioux Falls in October. It claims he provided “inaccurate and incomplete information” to Chinese citizens who put $500,000 each into the Northern Beef Packers cattle processing plant in Aberdeen in 2009 and 2010. He failed to disclose there were liens against the plant and that it was then about two years behind schedule, according to the suit.
Mike, is that connected to the 2011 Zhen et al. lawsuit, which morphed from a suit by EB-5 investors to a suit by EB-5 recruiter Henry Global? http://dockets.justia.com/docket/south-dakota/sddce/4:2011cv04148/49494
Bill F., my understanding is that the investment has to produce 10 jobs (direct + indirect, by the RIMS formula) in two years. I don't think the investors can come back five years later and say, "Behold! Jobs! Finally!"
Cory,there was a second part to the story that i didn't read and I will post it now.
Really Crappy Projects’
The four original plaintiffs dropped out of the suit and were replaced with four others in November. Their lawyers declined to comment.
Bollen, who denies the allegations, filed a counter-suit against Beijing-based Henry Global Consulting Group, which SDRC hired to recruit the investors. He says in his complaint the company has “falsely advised” them about the plant and continues to try to turn them against it because of a dispute over the fees Henry Global charges. Lawyers for the defendant couldn’t be reached for comment.
So many people are trying to make money off the EB-5 program now that it’s difficult to know the difference between “really crappy projects and really good projects,” said Bollen, whose center has put EB-5 money into a wind farm, a hotel and casino and a turkey processing factory. “There are a bunch of sleazebags who will sell anything.”
"There are a bunch of sleazebags who will sell anything." Out of the mouths of babes.