The EB-5 scandal is so dangerous to Republicans that the state party is lying to its own voters. An eager reader says the SDGOP is sending out the following letter to registered Republicans:
Wow—talk about missing the point! Let's go to the line-by-line (I preserve the SDGOP's underlining and add letters for easier reference):
A. State leaders have vigorously investigated this matter—the Division of Criminal Investigation, the Government Operations and Audit Committee, the Department of Legislative Audit, and two different private accounting firms.
- The DCI never interviewed key witness Richard Benda.
- GOAC has refused to subpoena key witness Joop Bollen.
- GOAC has refused to require Bollen, Mike Rounds, Governor Dennis Daugaard to testify in person under oath where legislators could immediately follow up on responses.
- The Department of Legislative Audit did not investigate any of the questionable practices of Bollen and his collaborators in the operation of SDRC Inc., the company he formed to privatize his state job.
B. The only allegations were against Richard Benda—of double dipping on travel reimbursement, and of redirecting a state grant after he had left the state and was working for a private company.
- The new revelations that have come out this year about EB-5 have moved well beyond Richard Benda's activities as Governor's Office of Economic Development chief and SDRC Inc. loan monitor.
- The primary unanswered allegations are that as Governor, Mike Rounds know about a raft of malfeasance by Joop Bollen and rewarded Bollen with a lucrative no-bid contract.
C. AG Marty Jackley was ready to pursue criminal charges against Benda at the time of his death.
- The SDGOP is defaming a dead man.
- AG Jackley's release of a draft arrest warrant that was never executed causes pain a family whose pain and desire for privacy AG Jackley has cited as justification for keeping other EB-5-related matters secret.
- AG Jackley and Gov. Daugaard both initially denied that Benda had committed any wrongdoing with respect to the $550K Future Fund grant diversion. AG Jackley changed that story in July 2014.
D. The audits of GOED were comprehensive and recommendations for improvement have been adopted.
- The GEOD audits did not address the entirety of business practices of SDRC Inc.
- The GOED audits did not address Joop Bollen's violation of state conflict-of-interest law.
- The GOED audits did not address Joop Bollen's concealment, in violation of state risk management policy, of a lawsuit against the state incurred by his public agency's activities in 2008.
- The GOED audits did not address Joop Bollen's illegal and inept representation of the state in a legal pleading in 2008.
- The GOED audits did not address Joop Bollen's mismanagement of Northern Beef Packers, which ultimately led to the loss of $167 million dollars of private and state investment in bankruptcy.
E. Democrats are playing politics. They are manufacturing a scandal about EB-5 through innuendo. They have never explained what wrongdoing they suspect.
- Rep. Kathy Tyler, attorney Patrick Duffy, this blog, and others have laid out thorough and detailed arguments about lost taxpayer dollars, ethical breaches, and legal violations.
F. Republican leadership been [sic] open and forthright.
- Republican leadership on GOAC forthrightly refused to even discuss subpoenaing Joop Bollen.
G. AG Jackley vigorously investigated the matter, at the governor's request. His investigators interviewed dozens of witnesses, including Joop Bollen, and reviewed thousands of documents. As a result of what was found, AG Jackley was prepared to pursue criminal charges against Benda. That didn't happen because of Benda's death.
- Again, the SDGOP is shamelessly using a dead man as its fall guy.
- The SDGOP is making unsubstantiated claims about "dozens" of witnesses and "thousands" of documents. If the Republican leadership is committed to being "open and forthright," it will list those dozens of witnesses and thousands of documents.
- AG Jackley's "vigorous" investigation did not include questioning Richard Benda.
- AG Jackley's "vigorous" investigation did not begin until spring 2013, four years after the attorney general's office learned of illegal activity by Joop Bollen.
H. Gov. Daugaard promptly released the AG's investigation report to the public last fall.
- Gov. Daugaard did not release this information until after Richard Benda's unusual death provoked a firestorm of public curiosity and scrutiny.
I. Gov. Rounds has been completely open and forthright as well—with the public and with investigators. Rounds has said that, if he had known about Benda's wrongdoing, he would have fired Benda on the spot.
- Documents have shown that several of Rounds's "open and forthright" statements are false.
- Rounds took four months to respond to questions about EB-5 from reporter Bob Mercer.
J. Gov. Daugaard ordered three separate reviews, of GOED, by two different accounting firms and by the Department of Legislative Audit, the state legislature's independent auditing office. The audits found no further wrongdoing, and the state implemented ideas to improve processes.
The reports of all three reviews were shared with legislators and the public and are available at http://sdreadytowork.com/Financing-and-Incentives--Public-Records.aspx
- New evidence of wrongdoing has surfaced since the February 2014 audits.
K. The State Legislature has held two hearings to discuss the reports and the investigation and to ask questions of state officials.
- The committee charged by the Legislature to discuss the reports and investigate EB-5 has left EB-5 off its agenda in two meetings.
- The hearings that have addressed EB-5 have been used by Republican leadership to stonewall hard questions about EB-5.
L. Everyone involved—Gov. Rounds, Gov. Daugaard, AG Jackley, and other state officials—have answered every question asked, and provided every document that the law allows.
- Answering every question does not mean answering every question fully and truthfully.
- State officials have not answered questions about the focus of seven of eight federal subpoenas issued relating to South Dakota's EB-5 program.
- State officials have not answered questions about why Joop Bollen was not fired for numerous violations of state policy and law.
- State officials have not answered questions about the evidence that led to the conclusion that Richard Benda committed suicide.
M. A federal investigation is also ongoing, and everything that has been found by state officials has been shared with federal investigators.
- The SDGOP makes another unsubstantiable and uncreditable assertion. We cannot know if state officials have shared "everything" with federal investigators.
N. EB-5 is a federal immigration program—not a state-run program.
- The SDGOP repeats its biggest red herring: while Joop Bollen may have violated USCIS regulations on the EB-5 program, he also appears to have violated numerous state policies and laws that fall entirely within the jurisdiction of state officials.
- Mike Rounds has said Bollen was a Board of Regents employee, subject to state oversight.
- Bollen testified in Darley v. SDIBI that he answered to the Regents and the Governor's Office of Economic Development.
O. The state's ability to investigate a federal program is very limited—whether it is the Attorney General or a legislative committee. That is why the AG provided everything he found to federal investigators.
EB-5 is a federal program that allows private companies to raise private investment for economic development projects, under federal guidelines.
- Medicaid is a federal program, yet the Attorney General's office regularly investigates and prosecutes Medicaid fraud.
P. Like nearly every other state, SD had designated a private company to operate EB-5 in the state—SDRC, Inc. Gov. Daugaard terminated the state contract with SDRC in Fall 2013.
- The state operated EB-5 through a state agency, the South Dakota International Business Institute, from 2004 through 2009.
- The state obtained and has continuously retained the official USCIS EB-5 "regional center" designation since 2004.
- South Dakota's contract with private SDRC Inc. in December 2009 was a no-bid sweetheart deal rewarding malfeasant state employee Joop Bollen, who quit his state job the day before he signed the SDRC Inc. contract.
Q. Today, the state does not actively promote EB-5. The state receives and files reports about existing EB-5 projects, and provides information about the program to those who enquire.
There are numerous successful projects in SD that were funded through EB-5, including Dakota Turkey Growers in Huron, the Deadwood Mountain Grand, and development of wind power.
- More red herrings: these facts have nothing to do with wrongdoing by Richard Benda, Joop Bollen, Mike Rounds, or anyone else involved with running the state's EB-5 program
R. South Dakota did not lose millions of dollars of taxpayer money on Northern Beef Packers (NBP).
The total state contribution to the $150 million project was $4.3 million. That entire amount has already been recovered through taxes paid by NBP.
- The actual amount of public and private money poured into Northern Beef Packers was $167 million.
- $4.3 million does not include the bank franchise taxes lost in the tax break for NBP offshore funder Epoch Star.
- $4.3 million does not include the $2.4 million in bank franchise taxes evaded by SDRC Inc.
- $4.3 million does not include the uncounted local and county revenues lost when NBP went bankrupt due to state employee/contractor Bollen's mismanagement and put hundreds of Aberdonians out of work.
S. Although the owners of NBP went bankrupt, the plant still exists, and new owners, New Angus, intend to reopen and operate the plant within a year. That means the goal of a beef plant in Aberdeen will be achieved.
- Aberdeen heard claims that NBP would open within a year throughout its five-year construction period.
- Claims of future solvency bear no weight on present failure.
- Claims of future solvency under new management bear no weight on the failure of Bollen, Benda, and Rounds to make NBP work now.
If Republican voters are looking for an excuse to ignore EB-5, this letter from the SDGOP may provide the palliative they need. I mean, hey, it's on paper, so it must be true, right?
But if I were a Democratic leader, I'd feel awful about having to blow smoke like this at my own people to keep them marking the right bubbles on their ballots.
Forward this list of responses to your Republican friends, and encourage them to ask their party leaders for the full and accurate story about EB-5.
So then, how about a lawsuit against the SDGOP for lying? The SDGOP threatens a lawsuit to shut down the truth, how about a real lawsuit that exposes their lies? As they say, the SDGOP has more guts than a slaughterhouse.
Great post Cory! This just makes my blood boil! Look at all these Republican legislative candidates here in the state and how many of them have had the courage to beyond partisanship and done the right thing and be aggressive to finally get to the bottom of all of this? Do they realize the respect they would get if they had done so? It is another missed opportunity but they are so concerned about maintaining or further gaining power.
This past week a volunteer with the SDGOP called me for a survey and I immediately interrupted him and we discussed EB-5 and just how it has impacted people I personally know and they are lifelong Republicans. He was nice and had a response though mostly weak from the points I was making but when he said this was all manufactured by the Democrats I quickly corrected him that this was not just a Democrat thing!
The other thing regarding Rounds is that they are so focused on the Republicans winning the Senate that they either turn their cheeks away from the misdeeds of Rounds or are blind in partisanship.
Whitewash: [verb] try to clear (someone or their name) by deliberately concealing their mistakes or faults.
How many millions of potential fees did the state not collect due to Rounds giving the golden goose to Bollen? Revenues not collected are lost revenues. Another lie attributable to Rounds and wingnuts.
One question keeps coming to mind every time the goppers talk about "successes" of the EB-5 program. That question revolves around the Turkey Plant in Huron. The question is why is the Turkey Plant a symbol of "success"?
Dakota Provisions received (as per the SDRC website) a total of 60 million in EB-5 money, starting 3-1/2 years after it was in full production. There is no indication that the plant was increased in size by even a third, much less doubled, even though the money was about equal to the original plant cost. Next, Jeff Sveen was and is the Chairman of Dakota Provisions. At all times, he was SDRC's lawyer. At various times he has been Bollen's personal lawyer. He has also been representing the SDIF's that were set up to loan money to Dakota Provisions and NBP and others.
So, where did the money go? Was it used to pay dividends to the owners of Dakota Provisions? Finally, in Mr. Bollen's deposition, he indicates that he is NOT the sole owner of SDRC, Inc. Who else owns the equity?: Mr. Sveen? Mr. Park? Mr. Harvey Jewett? (who has not only been Mr. Sveen's law partner, but has been on the Board of Regents when all these questionable transactions have taken place) or was it Mr. Benda? or was it one or more elected state officials? Somehow, the answers to all of these questions will likely bring everything else into clear focus.
I will close with one tangentially related question: Is Rounds tastelessly having his birthday celebration on the anniversary of Benda's death because the "suicide" helped keep some of the secrets?
Jerry, I find litigating in the court of public opinion more cost-effective.
Read the contract, found on the AL David Montgomery column. The entire company is "null and void, or voidable", in the words of a prominent attorney associated with EB-5 (I don't have his permission to quote). The reason? Clause 6.
Read the contract. This entire rancid sack of shit is more rancid by the day.
Lynn, you catch a key point there: saying EB-5 is just a political ploy manufactured by Democrats is the worst evasion. Democrats didn't manufacture the documents. They didn't manufacture the NBP bankruptcy. They didn't manufacture Joop Bollen's mirror contract.
Mike, great point! Bollen said in his deposition that he pulled EB-5 away from a 2007 tilapia project because one failed project would case South Dakota to lose all ability to recruit EB-5 investors for future projects. And indeed, here we sit with Governor Daugaard and GOED not promoting EB-5. If we accept that EB-5 is a useful and moral source of foreign investment, then South Dakota is indeed missing out on millions each year in investment, thanks to Bollen and Benda and Rounds's inability/unwillingness to rein them in and keep EB-5 honest.
What was the date on the 'draft' arrest warrant?
Francis, you can view the draft arrest warrant in this PDF at KELOLand.com. The draft says October 2013 but leaves a blank for the date. That PDF also includes the October 11, 2013, letter summoning grand jurors to a session on October 28, 2013.
Mike Rounds is a terribly incompetent governor at the least. How many meetings are erased? A competent, good, ethical governor would have been having regular meetings via internet when there is a major industry (NBP)being built in his state with taxpayer money. When was the secretary told to delete all documentation? Open records, South Dakotans, open records. All you got to do is demand open records,which your Golden Boy Mike Rounds fought against.
Which contract, Paul? Can you link it for us, please?
I keep having this dream -- a nightmare actually -- of Mike Rounds being elected to the Senate, of Mike Rounds flying to Washington, of Mike Rounds taking the oath of office. And as soon as he completes the oath and takes his hand off the Bible, a federal agent places a subpoena in it. Rounds was basically a big pain in the rear that we South Dakotans put up with eight years, and we're still busy cleanng up his messes. Why are South Dakotans even considering him to be a valid candidate? Why would we want to continue sweeping up the potential messes he'll get us all into in DC??
And consider this internal contradiction in the SDGOP letter: they trot out the familiar "EB-5 is federal" dodge, but then they emphasize that Gov. Daugaard is not promoting EB-5. So EB-5 isn't happening right now in South Dakota. Hmm... if it were entirely a federal program, what say would South Dakota have over it? Evidently, the state's promoting EB-5 is key to EB-5 happening.
Republicans don't want voters considering the obvious point: we are talking about malfeasance in the state's promotion and exploitation of this federal program.
And if EB-5 is a good program (as Rounds has contended), why isn't Gov. Daugaard promoting it? There must be something wrong with it.
Also, the 2nd to last bullet (numbering makes discussion easier, less "hide the ball"... duh..., 1-19): $4.3 given somehow by state to NBP was NOT made up by taxes; those taxes are on top of the principal sum which has not been recouped as far as SDGOP/Daugaard Coverup,Inc. (copyright) says here.
Leslie, good suggestion! I have added letters to each SDGOP quote for reference.
righto, cory-i was only criticizing the sleazy inglourious basterds- the slime balls that put their buffalo message out to confuse the public even more.
I noticed that they did not make a single reference to the Richard Benda death investigation that Marty has been concealing.
Idiots, trying to blame all the EB-5 corruption on the Feds, so unrepublican. Own up to it, SDGOP - YOUR boys abused it. Take responsibility.
Montgomery said that Rounds' floor is about 33% "as if Satan were running and had an 'R' after his name."
Where's Benda's family in all of this? They probably don't know much but the way the Republicans are running his name through the mud you'd think somebody from his family would try to defend him in some way.
I really believe that the initial responses of Daugaard and Jackley to be very telling. When this was first exposed to the public due to this unfortunate and bizarre “suicide”, we were told that this was all about $5,500 in double billing, and that was it. Nothing more, trust us, we are all about protecting the family and it is in everyone’s interest to just trust the worthy South Dakota AG and move along as instructed. We were (and are) treated like children. Open government anyone?
I believe that $5,500 was intended to confuse the public regarding the $550,000. Jackley, being the best conniver (also the most dangerous), had a plan to minimize and confuse. It has nothing to do with justice, but is far more focused on him being in the Governor’s Mansion. If there really is any justice it will be instead the Jameson wing. Apparently all you have to do is say “South Dakota Common Sense” over and over, and many will blindly vote with the (R).
It is difficult to understand how persons who are capable of successful campaigns are suddenly incapable of understanding the “details” of their administration. What else was so important that EB-5 didn’t warrant a Governors attention to the details? They have to claim ignorance, as the alternative is criminal. In you ask me it’s high time to ditch “South Dakota Common Sense”.
I thought Jackley's original excuse for not making Benda's "suicide" investigation public was to protect the Benda family. Seems now that republicans are in trouble they have decided the hell with Benda's family, they will do whatever they have to do to protect the Rounds campaign, including tossing the dead man under the bus. Wonder if at some time Benda's family will say to hell with republicans and make what they know public.
Good point Tim, I thought of the same. It is clear that there was a payout for keeping a lid on this. The power of money sometimes overrides the ideals we think others have.
Benda's family is familiar with "South Dakota Common Sense"
http://rapidcityjournal.com/blog/pierre-review/the-richard-benda-death-investigation-reports/article_a19d77b8-633e-11e3-b9b1-001a4bcf887a.html
Tim, those who have died cannot talk, but money sure can, and money can even scream.
Money also buys silence,influence,free speech,politicians,cooperation,obstruction of justice,car elevators. In fact money is so versatile anymore it should replace democracy as the be all and end all.
Dead Man Talking
The greatest fear Rounds must have right now is that Richard Benda is talking to someone.
At pathologist friend of mine told me that the dead tell their story through autopsy reports, criminal investigations and the circumstances surrounding their death.
Those that take their own life generally tell us why they did so. Did Benda leave a note?
The dead also talk to us in the form of written communications and documents. Diaries, bank statements, wills and estates, life insurance policies, written and digital communications, etc. all tell us about their life.
Richard Benda is talking, who and what he has to say hasn't been revealed, we do know that he had to have left a communication trail, is that the fear Rounds has of the ghost of Richard Benda?
The public opinion of all of this stench is clearly not doing Rounds any favors which is a great deal to boot his fanny in the election. I want the pressure to stay on this until we get the questions answered that need to be cleared up as this is also about our money. There are others here that the crap is not sticking to and that is a mystery to me. I am talking about you Daugaard and you Jackley, how the hell can you two knuckleheads be above this fray? Most of us here are keenly aware of your involvement just due to the time frames and your actions. The only way for these other big fish and that minnow, Larry Long, to be filleted will be for a United States special prosecutor to enter the picture here as our entire system of law has broken down here.
So WHY don't the Democrats run a commercial that simply scrolls these questions across the screen?
There ain't a tv big enough to hold all these questions.
D. GOAC failed to protect, preserve and disclose Benda's and Bollen's related email records and files. duh
G. AG Jackley and his 100 lawyers and his too numerous to quantify law enforcement investigators failed to (ditto above). duh
All of these failures are squarely in the lap of Gov. Daugaard
car elevators,car elevators?? :)
Randall, I invite the SDDP to bring the FedEx dude out of retirement, scroll the SDGOP talking points, and read my responses. That just might get 'er done.
I can also find some high school policy debaters who can cut that mustard.
The FEDERAL EB5 program is a cash PIPELINE to middlemen who had to have SOUTH DAKOTA assistance, cooperation (Banking Commission) and implementation to turn on the spigot.
Why am I seemingly the only one asking the most obvious question? How much did Rounds and/or his family make on this scheme?
For the Rounds administration to pay Joop Bollen $45,000/year in a no-bid contract to "take the golden goose" (millions in EB-5 fees that would otherwise have gone to the state treasury) there must have been some side deal somewhere. when you have a dishonest state employee you don't just hand him over a multi-million dollar revenue stream - let alone paying him to take that revenue stream. Handing Bollen the golden goose is the "what" that happened. And behind every "what" there is a "why?" That's the question that Rounds and his minions have desperately avoided answering.
So how much did Joop Bollen and his associates pay Mike Rounds and his businesses/family? The press needs to put this question to Mike Rounds directly. But regardless of whether the press grows a pair and asks this question, I suspect the answer will begin to be revealed in the next 2 weeks, and it ain't gonna be helpful to the Mike Rounds for Senate campaign.
Rohr-yah can't assert rounds took
$$ from joop without proof in the USA; so Daugaard and Jackley and a supporting cast of thousands should interrogate, tape, use subpoenas, hearings, sheriffs, cops, detectives, and cyber-experts ect. AND GET SOME CONCRETE F88KING EVIDENCE, but SDGOP will not permit that in this state (as with the state of New Jersey which is why Chris Christie thinks he can be president).
Good questions, Mr. Rorschach. And how come there was never ever any mention of these millions and millions of revenue in Governor Rounds budgets when even the tiniest libbie tax was probably touted. There should be documented E-B5 monies pouring into the treasury hand over fist, and if there were not why are there not now?
P.3.-cory SDRC, Inc. and SDRC are different, right(?), so is SDGOP doing a shell game here?
Great Aberdeen editorial questioning Rounds' Regents tight lipped "NO JOOP DEPOSITION!" despite Mercer's persistance. More delay, SDGOP, thanks! They say they are getting their $500k legal fees, costs back somehow????
I'm not an expert in judicial proceedings at the AG's level but any arrest warrant that I ever served was signed and dated by a judge. This warrant has a space for signature by a notary public and I find that a bit odd because I seem to think that only a member of the judiciary can authorize or command the arrest of a citizen based upon probable cause. If the DCI had anything to do with this, the agents are generally the ones that formulate the affadavits and warrant requests stating the evidence to be presented, the witnesses to be called, etc......... The people who investigated this are, themselves, witnesses for the prosecution and so must therefore be part of the record. In preparation for initial appearance and plea entry, a witness must produce probable cause evidence submitted to a grand jury if there was one. From these documents, there isn't much consistency between the process that I was and am familiar with and what appeared to actually have happened. None of this rings true............. Duffy should be familiar with this stuff.
I posted a comment about this Republican mailer on Dump Site and got an "your comment is awaiting moderation", that probably means it will be deleted or I'll be blocked.
It was on Powers thread about Rick getting rid of Ellsworth Air Force Base.