David North at the Center for Immigration Studies has a new insightful article on how the “cash for visas” EB-5 program was handled in South Dakota.

The EB-5 program is a Ted Kennedy federal government program, and very few states are involved in it even though the program has been around for 24 years.  Michigan recently joined South Dakota and Vermont in state government participation in the program, yet South Dakota’s involvement is unique among them all.

Some people have found it stunning that there is somewhere around $120 million in EB-5 money that has gone missing in South Dakota. How did that much money end up floating around South Dakota in what is primarily a federal program?

Two reasons, according to North’s article:

1. The surrender of a state-owned money-maker (the EB-5 regional center) to private interests under mysterious circumstances during the Rounds administration, which has been the subject of much controversy in the current U.S. Senate campaign, and
2. A factor not previously discussed: the extreme fees charged to alien investors by the state’s de facto monopoly regional center. If the fees had not been so large, there would be much less missing money to worry about.

Remember that alien investors (like the ones from communist China involved in South Dakota’s shenanigans) cough up $500,000 to invest in a crony capitalism business project, and in exchange they and their families get green cards to come and live in the United States.

Now, in addition to the half a million that foreign investors have to cough up to buy obtain their green cards, the visa recipients can also be charged a fee. The federal government doesn’t dictate or control the amount of those fees.

CIS did an informal poll of EB-5 regional centers around the country regarding fee amounts. Most don’t supply that information, but the few that did tended to range in the $30,000 to $55,000 range.  In Vermont, which until recently was the only other state government embroiled in the EB-5 program, the state allows the projects to levy a $35,000 fee on the investor but the state itself levies a one-time $2,000 fee.

In South Dakota, it seems those fees have amounted to at least $100,00 per investment, with one-time fees of at least $85,000 and ongoing annual fees of $10,000. It seems there are at least 80 such projects in South Dakota, generating at least $80 milllion in loot money.

An obvious question comes up, regarding foreign investors: if they were getting gouged so deeply in South Dakota, why wouldn’t they simply go shopping at a cheaper visa shop like Vermont?

Says North:

1) the EB-5 program is far from transparent at all levels, so few if any of the investors knew about the different fee levels;
2) the investors are much more interested in buying green cards than in what happens to their investments; and
3) some of the grim events noted above happened after the South Dakota investments were made.

The investors were more interested in buying green cards than in what happened to their investments. Sounds odd to the average American, but when you’re a wealthy foreigner with millions or billions living in a repressive dunghole, maybe it’s a pretty good deal.

Sounds like the EB-5 racket program was a pretty good deal for Mike Rounds and his buddies, too.  His buddies made lots of money, some of which I have no doubt made its way back into the campaign coffers (that’s the way crony capitalism works, after all).

Who didn’t make out on the deal? South Dakota (and American) taxpayers who saw their government waste taxpayer dollars and energy on this self-serving exercise in corruption, as well as saw more tom-foolery with their already tattered national immigration laws.

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Similar Posts:

• Report: $120 Million in EB-5 Money Missing in South Dakota
• On Crony Capitalism in South Dakota
• Report: National Security Concerns over EB-5 Visa Program
• EB-5 Visa Bill Heard in South Dakota Committee
• The Stench from the South Dakota Slaughterhouse

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.

Bob Ellis

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