« The Daily Dose

Shedding light on the chaos of EB-5

by Greg Belfrage

The more answers we get in the state's growing EB-5 scandal, the more questions are raised.

There were several articles over the weekend that cast a little more light on what happened with the state's troubled immigrant investor program.

The Argus Leader reports that SDRC, Inc., the company that managed the state's EB-5 program, asked for approval to help finance the controversial Keystone XL pipeline. State officials didn't learn until nearly two years later that the company was trying to supply EB-5 financing to Trans-Canada for the pipeline.

This appears to be a huge problem because, as the Argus points out, SDRC's contract to run the state's EB-5 program states it should be "for the benefit of South Dakota". SDRC, Inc. was also attempting to move into Montana and Nebraska.

Read the full report .

Meanwhile, the Aberdeen American News is reporting on a sworn deposition from the businessman who started the Northern Beef Packers project. Dennis Hellwig said there were ongoing problems dealing with Richard Benda.At that time, Benda was the economic development chief for Governor Mike Rounds.

It was harder and harder to get financing, Hellwig testified. We had a pretty good plan starting out, but it got harder and harder. And the state, they were the ones behind this program from the very start, and they turned out not to be behind it, and I dont know why. And the one guy that was handling it was Mr. Benda."

He also testified in the deposition that he once tried to call Rounds office to discuss the plant and left a message for the governor. A couple of minutes later, Hellwig said, Benda called him back and said, You go through me to get to the governor."

So there was some bad things happened with the state for some reason. And I never had anything, I didnt do anything to upset him any. But we felt there was some bad, something getting bad up to the state in our project from somebody. I dont know.

Hellwig's testimony paints a picture of Benda as angry and increasingly unwilling to help Northern Beef Packers secure funding through the state's EB-5 program. NBP officials had no idea why.

Read the article by reporter Scott Waltman.

It's troubling to note that Hellwig's call to the governor's office resulted in an immediate call-back from Richard Benda. Why didn't Governor Rounds, or someone from his office, return Hellwig's call? Why wouldn't Rounds speak to the owner of a company to which the state was providing major investment under EB-5?

Benda died in October 2013 after a self-inflicted gunshot wound to the abdomen. Investigations have revealed that Benda received duplicate reimbursements for airlines trips. He also misdirected $550.000 from a $1 million state grant earmarked for Northern Beef Packers.

Here's what we've learned over the past few months...

1. Chinese investors in the state EB-5 program received no visas or refunds. Nobody knows exactly what happened to the money.

2. Joop Bollen, the founder of SDRC, Inc., removed all EB-5 records without permission when he left his employment at Northern State University. Some records are known destroyed, others are missing.

3. Bollen applied to extend the reach of SDRC., Inc. beyond the state's borders into Montana and Nebraska. He also tried to provide EB-5 funding to Trans-Canada for the Keystone XL pipeline... all without the knowledge of state officials.

4. The state gave Richard Benda tens of thousands of dollars in reimbursements for expenses without receipts.

5. Officials at Northern Beef Packers felt they were being stonewalled by the state's secretary of economic development, Richard Benda, for reasons they didn't understand. NBP was a major recipient under the state's EB-5 program.

6. Governor Mike Rounds didn't take a concerned phone call from the owner of Northern Beef Packers. Instead, the call was returned by an angry Richard Benda.

The lack of oversight and accountability that plagued the state's EB-5 program is staggering. Tens of thousands of dollars in payments made without receipts. The concerns of EB-5 partners unheard. Those involved with administering the EB-5 program drifting from state to private employment without any oversight concerns from state officials. State EB-5 records lost or destroyed. Promised visas never delivered. Company partners bankrupt. Lives ruined.

It's not hard to see why money is missing and one former state employee is dead. This is a fiasco from start to finish.

Mike Rounds responded to questions about EB-5 during the recent Republican primary debate, sponsored by the South Dakota Newspaper Association.

Rounds said of the scandal, "We have not lost any taxpayer money."

Not true, says a recent report by the AP's Dirk Lammers. He provides numbers from state agencies showing the number is close to $4.3 million.

Over 4 million dollars spent with nothing to show for it except an empty beef plant.

Looks to me like Mike Rounds will fit right in with the reckless climate of Washington, D.C.

Greg Belfrage @belfrageshow is heard 6am-9am on KELO 1320 AM and 107.9 FM. Greg can be contacted at greg.belfrage@mwcradio.com.