SIOUX FALLS, S.D. (AP) - South Dakotans will find out next week what the former and current governors said they know as part of an investigation of a federal program that grants visas to people who invest in rural, job-creating South Dakota projects.
The Government Operations and Audit Committee, in its agenda sent Friday for Wednesday’s meeting in Pierre, plans to look at written answers provided by former Gov. Mike Rounds and Gov. Dennis Daugaard on the EB-5 program, which allows foreign investors to seek U.S. residency with a $500,000 investment in an approved project that creates at least 10 jobs.
It’s under scrutiny because of allegations of financial misconduct by the late Richard Benda, former commissioner of the Governor’s Office of Economic Development, and Joop Bollen, former program administrator.
Democrats want Rounds, Daugaard and Bollen to appear in person before the committee, but the panel instead will allow the three men to submit written answers to questions posed by its members.
Besides going over answers already provided by Rounds and Daugaard, the committee will review and finalize questions that will be sent to Bollen and also take public testimony on the program. Rounds and Daugaard both will be on the November ballot, with the former governor running for the Senate and the current governor seeking re-election.
Rep. Bernie Hunhoff, House minority leader, said Democratic and Republican lawmakers have told him they’re not satisfied with the decision to allow written responses. He challenged the three men to sign a document verifying the answers are their own.
“I want to make sure that the principals involved wrote down the answers and not some staffer or some lawyer. I want them to tell us, ’I read the question and this is my best answer,’” Hunhoff said. “I want to know how much money the public lost, what we’re doing to get it back, where the public records are and what went wrong so we know how we can fix it.”
An audit determined that before Benda left his job in 2010, he tacked on an extra $550,000 to a grant agreement for the struggling Northern Beef Packers plant in Aberdeen, which received EB-5 money. A report from Attorney General Marty Jackley showed the same amount was improperly diverted to Benda’s new employer, SDRC Inc., which Bollen led. Benda also double-billed the state $5,560 for three flights to China and Las Vegas, Jackley said. Investigators concluded Benda committed suicide in October.
Tidemann said at GOAC’s July meeting the state has added several mechanisms to prevent misconduct, including criminal background checks of senior GOED staff, whistleblower rules and better travel reimbursement oversight.
The committee will also review a conflict of interest rule being drafted for the next legislative session that would require state employees to wait a year before seeking employment at a business they deal with, chairman Sen. Larry Tidemann said Friday.
“It’s an amendment to a statute that affects all of the legislators, that they can’t have any state employment until they’ve been out of office one year,” he said.
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