Its rare that crooked governors are called on to account for their corruption before the bar of Justice. Governor Rick Scott (R-FL) is running for reelection; Governor Scott Walker (R-WI) is running for reelection and would like to be someone's vice presidential pick; Governor Rick Perry (R-TX), though under indictment, imagines he's running for president again; Governor Andrew Cuomo (D-NY) just won renomination against an outstanding anti-corruption reformer; Governor Nathan Deal (R-GA) is ahead in his reelection campaign; Governor Chris Christie, under intense investigation on a myriad of very serious corruption charges on both the state and federal levels, is running for the Republican presidential nomination. And Bob McDonnell, convicted on 11 counts of felony corruption, is mapping out his appeal rather than his vice presidential campaign. Another former governor, South Dakota crook Mike Rounds, is the heavy corporate favorite for the seat Democrat Tim Johnson is giving up this year. Most people outside South Dakota have never heard of Rounds-- which is a shame, since he was caught auctioning off visas to shady-- albeit wealthy-- foreign characters.Neraly a full year ago Cory Heidelberger laid out all the facts of the Rounds visa-selling scandal for South Dakotans in South Dakota Magazine.
On October 30, Governor Dennis Daugaard stopped the presses by announcing that state and federal investigators are looking into "financial misconduct" in the Governor's Office of Economic Development.The presses have fired up and churned out all sorts of background and discussion and speculation on GOED, EB-5 visas, Northern Beef Packers, and other angles of this very complicated story.U.S. Marshals haven't perp-walked any South Dakota suits down Phillips Avenue to the federal courthouse in Sioux Falls. But whether the ongoing investigations drag anyone before a judge, South Dakotans need to pay attention to the GOED/EB-5 scandal, on multiple levels:• Misguided Agricultural Economic Development. Throughout the Mike Rounds and Dennis Daugaard administrations, South Dakota has followed the Earl Butz ag philosophy of "Get big or get out." South Dakota has favored mega-dairies, in part with EB-5 visa investments, at the expense of small local dairies. One of the largest dairies supported by EB-5 money, the Veblen mega-dairy, went bankrupt in 2009. The Rounds Administration ignored local investors interested in starting a manageably-sized beef packing plant in northeastern South Dakota and instead favored the gigantic Northern Beef Packers plant with $80 million of EB-5 visa money, plus millions more in other forms of assistance. That money all went poof: the plant never reached the production levels necessary to pay the bills and went bankrupt after less than a year.A local entrepreneur responds to the investigation of the GOED's EB-5 program and suggests we could get better bang for our economic development buck focusing on smaller local start-up businesses. South Dakotans should spend the coming legislative session discussing that redirection of economic development policy with lawmakers.• Accountability. In the Veblen and NBP bankruptcies, we perhaps see the pitfalls of recruiting investors who are more interested in buying their green cards than in keeping an eye on how the businesses in which they invest use their money. But we also see the state making it hard for us to keep an eye out for foxes in our henhouse. After a review by a legislative committee in 2008, the state contracted its EB-5 program to a private company created by program coordinator Joop Bollen. The Rounds and Daugaard administration exerted little oversight, and Bollen used his private status to resist inquiries about EB-5 recruitment and investment. The Daugaard Administration tightened the financial reins in 2012 and finally got fed up and cancelled Bollen's contract in 2013, but for years, the state let this program fly without sufficient public accountability. The EB-5 program epitomizes the difficulty South Dakotans have in finding out what their government is doing.• Richard Benda. The former commissioner of Governor Rounds's Office of Economic Development was found dead in a grove of trees last month near a brother-in-law's home outside Lake Andes.Governor Daugaard himself announced Benda's death on October 22. The day after Benda's funeral, the Governor announced the GOED investigation, which the Governor said he'd known about since spring. Three weeks later, the state has released no information on preliminary autopsy results. This official silence is deafening, especially when confirming one of the obvious explanations, suicide or hunting accident, would quash rampant speculation.Anyone who thinks these events are not somehow connected has an unhealthy commitment to agnosticism.• Marion Michael Rounds. At the bottom of an already overwhelming newspile, we have the fact that Mike Rounds is running for U.S. Senate. Rounds was Governor when South Dakota's EB-5 program really got going. Rounds promoted EB-5 beneficiary Northern Beef Packers as an integral part of his failed South Dakota Certified Beef initiative. Rounds hired Richard Benda and sent him and Joop Bollen and others to China to get more EB-5 investors.And now the feds are investigating his office's use of the EB-5 program.There's no way that comes out good for Team Rounds. The question for him, his challengers, his donors, and the voters is how bad it comes out, and how bad it still sounds on June 3, 2014, and maybe (a maybe distinctly louder than it was last month) on November 4.The campaign implications may be the least of our concerns. But this is a big story with a lot of players and a lot of connections to a lot of issues in our state. South Dakotans, please, keep paying attention.
Why isn't this a major campaign issue? Harry Reid thinks he can maintain Democratic control of the Senate without holding on to South Dakota. His dislike of predecessor Tom Daschle is so intense that he has forbidden the DSCC to back Daschle ally Rick Weiland, a populist who has steadily narrowed the gap between himself and Rounds-- despite Rounds' $3,716,986 in campaign funds compared to Weiland's $1,094,098. Several Democratic senators have started grumbling about Reid's inept handling of South Dakota and many have been contributing to Weiland's campaign on their own. With DSCC money, Rounds's visa-selling scandal could blow this whole race sky-high. Blue America contributors have helped Weiland run one ad on the scandal (see below) and Rounds nearly had a total breakdown. (Please keep contributing to Weiland's campaign here.) A few days ago a letter-to-the-editor in the Argus Leader raised all the questions the DSCC should be pounding away at-- instead of wasting all their money in deep red states on behalf of hopeless conservatives who can't win anyway.
The Democratic state legislators understand there is validity to this EB-5 scandal and that state money has been mismanaged, but someone must have put a gag order on Republican legislators. They seem to be following somebody’s marching orders. When the question was asked in a recent legislative committee, should we issue subpoenas, they all lost their tongues and sat idly by, wishing this would all go away. Is that what we elected all these Republican legislators to do? Why do they stand by and ask nothing of Mike Rounds and his former administration? Why hasn’t Joop Bollen been subpoenaed? Are they afraid of what Bollen will say if he’s put on the stand? Why do these elected officials care so much about cutting taxes, but they don’t care about state money that obviously has been mishandled? How much money actually might be missing?Rep. Susan Wismer can’t stand up against this bunch all by herself. I would like Rounds and Bollen to be forced to tell what they know so we can get to the bottom of this scandal. Of course, that will happen only when there is a subpoena. Foreigners should not be allowed to buy citizenship through an EB-5 visa (which Rounds claims is a good thing) for a big price and then have our state officials look the other way, while millions of dollars are floating in and out of unsupervised accounts. We all need to demand some accountability. Otherwise, our one-sided Legislature will figure they have the green light for whatever they feel is “for the good of the state.”Tim D. EricksonAberdeen
The latest polling from Survey USA shows Weiland slowly catching up to Rounds. At this point, if Larry Pressler were to drop out, the race would be too close to call:
Those who voted for Pressler were asked who they would vote for if the Independent were not in the race. More than half-- 55 percent-- would vote for Weiland. 23 percent said they would vote for Rounds, 12 percent would vote for Gordon Howie, and another 10 percent were undecided or wouldn't vote.That means if Pressler were not in the election, here's how the election would pan out, according to the poll:Harry Reid still refuses to allow the DSCC to get involved in the race and save the seat for the Democrats. There's something seriously wrong with him. Time to retire?
UPDATE: EB-5 Corruption Haunting Rounds CampaignEven if the DSCC won't, the Argus Leader and the state Democratic Party are helping keep the Rounds EB-5 scandal front and center. Does this sound fishy to you?
It was hard work for a tiny agency at Northern State University to recruit and manage millions of dollars in overseas EB-5 investments. So in January 2008 that agency's director, Joop Bollen, signed a contract with a private firm to help manage the investment program.What Bollen didn't disclose in the contract was that he owned that private firm, SDRC Inc. Bollen, a public employee as director of the South Dakota International Business Institute, had founded SDRC Inc. five days before signing the deal.Bollen's agency and Bollen's company would work closely together-- the company collecting millions of dollars in fees from investors in that time-- for two more years before he left state employment.The agreement was among a packet of documents distributed by the South Dakota Democratic Party on Monday as part of an effort to link the controversial EB-5 program with Republican candidates, including former Gov. Mike Rounds. The timing of the deal, and Bollen's apparent self-dealing, were little known, including among his bosses in the university system."That would certainly have been something I would have questioned had I known," said James Smith, the president of Northern State University. Smith started at NSU in late 2008, after this memorandum's signing, but he said he never learned of it later. The memorandum had a five-year duration.Smith said contracts like that normally require a signature from a superior, and was pretty sure none was obtained."With the way I've operated in the six years I've been here... we would have had the provost send me a letter or send me a memo telling me that this was going forward. I'm certain that that did not happen, because I'm relatively positive I would have seen it had there had been a paper trail like that."Tad Perry, who was executive director of the South Dakota Board of Regents at the time of the transaction, said he would have "probably undone" the contract if he knew about it."In their capacity as employee of the regents, signing a contract with a company that they owned would not be something that would be appropriate," Perry said. "But you'd have to know that. On the surface, if he wasn't a signatory for his own company, how did we know that was his company?"Bollen has declined to talk to the media since news of investigations into EB-5 last year.
Well, of course he has. And Rounds has been trying to somehow convince low-info voters that it must be Obama's fault… or Rick Weiland's. Meanwhile a friend of mine on the Hill told me that Chuck Schumer is hosting a fundraising event for Weiland, Reid or no Reid.