Former South Dakota governor Mike Rounds has publicly released his answers to the state Legislature’s Government Operations and Audit Committee concerning the EB-5 matter and the failure of the Northern Beef Processors plant in Aberdeen.
The Republican U.S. Senate front-runner says “I had no knowledge of the funds that Richard Benda allegedly diverted for personal use.”Benda was Rounds’ secretary of tourism and economic development and oversaw theEB-5 program. Benda was found dead last fall of an apparent self-inflictedgunshot wound.
Rounds’ two documents with his answers to legislators’ question that the legislativ committee will consider Wednesday in Pierre are attached below.
Rounds reiterates in his answers that there was no conspiracy with Benda to divert over half a million dollars from Northern BeefProcessors.
“(T) he attorney general has conducted an extensive investigation and concluded that there were no other state officials involved,” Rounds wrote.
The $550,000 at issue was part of a $1 million state Future Fund grant to NBP.
“I did not approve a $1 million grant for Richard Benda,” Rounds wrote. “I approved the Future Fund grant request for reimbursement of construction infrastructure costs, up to $1 million, by Northern Beef Processors (NBP). That requirement had been met by NBP.”
Rounds then noted that a check was issued to NBP after he left office and former Lt. Gov. Dennis Daugaard replaced Rounds as governor.
The former governor says he received “regular updates on ongoing economic development projects,” apparently including on the Northern Beef Processors plant that was being funded with millions of dollars of investment from foreigners through the EB-5 program.
The EB-5 program grants foreign investors a “green card” or permanent resident visa if certain thresholds of funds are invested in American economic development projects. South Dakota used the program to also fund several large-scale dairy farms during Rounds’ administration.
The program was originally administered by the South Dakota International Business Institute at Northern State University. Joop Bollen was the administrator of SDIBI when it was under the state Board of Regents.
As to the privatization of administration of the EB-5 program and Bollen continuing to run the EB-5 program under the new, private company, South Dakota Regional Corporation, the committee asked if there was a public bidding process.
 “My understanding is that the contract was negotiated between the state agency and SDRC (South Dakota Regional Corporation). Since the contract was less than $50,000 state law (emphasis i original) did not require a bid.”
“This contract was under the supervision of Northern StateUniversity and the Board of Regents (BOR),” Rounds wrote.
Rounds also denied that he participated in negotiating any of the terms of Joop Bollen’s contract to administer the EB-5 program after it was privatized.
Rounds noted that the state Legislature knew in 2008 how SDIBI was organized and whom Bollen reported to at NSU. Rounds attached a 2008 letter from Patrick Schloss to state Sen. Jason Gant, who was chair of the GOAC committee at the time, explaining what SDIBI did and how it operated.
As to the allegation that Bollen took state documents from SDIBI without the state’s permission, Rounds said he had no knowledge of that.The GOAC committee meets Wednesday at 9 a.m. at the Capitol in Pierre to go through Rounds’ responses as well as responses from Gov. Daugaard and others.

 

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