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Report: $120 Million in EB-5 Money Missing in South Dakota

September 10, 2014   ·   By   ·   1 Comments

money_falling2David North at the Center for Immigration Studies has a new article on the South Dakota EB-5 scandal, and $120 million in EB-5 funds that are missing.

CIS, as their name implies, is concerned with immigration into America, and as a part of that, they have been looking into the scandal surrounding EB-5 in South Dakota for some time now.

The problems with the EB-5 program, over and above the state’s losses, are numerous and often have caught the eye of the press (and this blogger as well). A huge beef slaughterhouse funded by EB-5 went bankrupt under suspicious circumstances, denying scores of (mostly Asian) investors both their investments and their green cards; an EB-5 middleman and former appointee of then-Governor Michael Rounds (R), died of a shotgun blast to his stomach in an act ruled to be a suicide by the Republican attorney general; that middleman, Richard Benda, overcharged the state for trips to China; and so on.

While a generally alert press corps covered these specific aspects of the unfolding EB-5 scandal reasonably well, and while the political opponents of Rounds (now the GOP candidate for U.S. Senate) and his allies picked away at these issues and sub-issues, most missed the main point. What should have been the central issue became obscured in the maze of details and in the remarkable complexities of the handling of EB-5 finances by a man named Joop Bollen, once a state official (working for a small state university, Northern State) and later operating his own private-for-profit firm handling the same business (foreign investments in the state via EB-5).

That central issue was, and is: Why did the state of South Dakota lose $120 million or so in EB-5 fees, and why did the Rounds administration not do something about it?

While I would add that we have a very strange “suicide” involved, about which it has been very difficult for the public to get answers, I also agree with this conclusion:

Too much of the criticism of the EB-5 program in South Dakota has been on the details of the scandal — the use of a no-bid contract, for example, to move the EB-5 contract from a public to a private entity — and much too little on the broad outline of an outrageous scheme to take an obscure flow of probably more than $100 million from the public and quietly give it to an unseen set of private hands.

The article also points out that, except for South Dakota and Vermont, and recently Michigan, state government has no role in the EB-5 program. Given the corruption and chicanery that surrounds South Dakota’s involvement in the program, it quickly becomes apparent why states should be hands-off in this visas-for-cash scheme. Perhaps the temptation to stick the hand in the cookie jar was just a little too much to resist for the liberal “Republicans” in the South Dakota GOP.

Which is also a lesson for us in why crony capitalism is something no genuine free market capitalist (or self-respecting Republican) should have any interest in.


This article is printed with the permission of the author(s). Opinions expressed herein are the sole responsibility of the article’s author(s), or of the person(s) or organization(s) quoted therein, and do not necessarily represent those of American Clarion or Dakota Voice LLC.

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Bob Ellis has been the owner of media company Dakota Voice, LLC since 2005. He is a 10-year veteran of the United States Air Force, a political writer for the past decade, and has been involved in numerous election and public policy campaigns for nearly 20 years, including a Tea Party leader and organizer since 2009. He lives in Rapid City, South Dakota with his wife and two children.
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