Monthly Archives: November 2013

Happy Thanksgiving: The story of our daughter and ESPN

The Kimster, as her pops likes to call her, threw the football with a good spiral and could have been a good baseball player if she hadn’t been the only girl on her Little League team. Her real talent was in design and color, and at the age now of 21 and 364 days as of this Tuesday night, she has a neat job putting those strengths to work. Her birthday is Thanksgiving Day this year. She was born on Thanksgiving Day too. Hard to believe, but when we were at the hospital on that Thanksgiving eve, I had never before watched this TV channel called ESPN. There was some anonymous college basketball game on — the teams disappear from memory — but the game on that TV up on the wall in the maternity room filled a few hours for me late that night. In the months and years after, ESPN became something I could count on, day or night (and night is definitely better, even at 4 a.m. when I wake up early), to fill the void when I’m too tired to read but too awake to sleep. ESPN has changed tremendously through the two decades, but the function remains the same: When there’s nothing else on, there’s always ESPN. Best of all, you can watch without the volume. You just have to watch more carefully. We’re going to spend the next few days celebrating her birthday, so this will be the last post on this blog for a few days. A dad gets to do that. You know why? Because dad said so — that’s my story and I’m sticking to it.

Health insurance carriers can extend plans

State Insurance Division director Merle Scheiber announced this afternoon that health insurers in South Dakota can extend current plans in 2014. This is in response to President Barack Obama and the forced cancellations taking place under the federal Affordable Care Act. The move is an attempt to preserve people’s existing coverage while Obamacare gets straightened out.

“The decision came down to protecting South Dakotans who would have lost their health insurance coverage through no fault of their own, even though the federal government is only allowing this flexibility for an additional year,,” Scheiber said.

Powertech punts on Water Management Board hearing

The state Water Management Board today indefinitely postponed the remainder of its scheduled hearing on Powertech’s applications for its proposed underground uranium mine. This was done at the company’s request. It follows a decision by the state Board of Mining and Environment to postpone the remainder of its hearing on Powertech’s mining application. In both instances, the decisions are based on a state law that gives primacy on uranium matters to federal regulators. Powertech would need approval from the U.S. Nuclear Regulatory Commission and the U.S. Environmental Protection Agency before either state board takes up the permit issues again.

Read the WMB decision and the briefs at this link on the Internet:

Gun rights and mental illness in South Dakota w/update

Sioux Falls Argus Leader reporter John Hult takes a look in this morning’s paper at a gap in South Dakota’s laws regarding who shouldn’t be allowed to buy a firearm. The Legislature in the 2013 session tried to address the question of whether people designated as mentally ill should have their rights to buy a firearm temporarily rescinded, but mental-health advocates said the legislation painted with too broad of a brush. The system that was proposed was actually somewhat complex and seemed to have safeguards. House Democratic leader Bernie Hunhoff of Yankton brought the measure, HB 1188, but it bogged down in the House Health and Human Services Committee for four weeks.

In one of those moves that cause people to scratch their heads about the legislative process, the bill was completely rewritten in the committee through an amendment from Rep. Melissa Magstadt, R-Watertown. The committee adopted her amendment, but then she tried to kill what now was essentially her bill. When that motion failed, she cast what was the key nay vote causing the committee to deadlock 6-6 on whether to recommend the bill’s passage by the full House. The committee then voted 7-5 to kill the bill as the panel’s chairman, Rep. Scott Munsterman, R-Brookings, switched his position from supporter of the bill on the previous vote to opponent.

UPDATE: Rep. Bernie Hunhoff offered additional background this morning. Here is his further explanation.

Regarding the mental illness bill you wrote about, Melissa as a committee member simply offered the amendment for me. The amendment was a collaborative agreement with DCI, UJS, AG, Sheriff’s, DHS, etc. that took weeks to get together. Melissa never did necessarily say she supported it, but she offered it as a courtesy since she was on the committee. I thought we had the votes in committee, and probably could have gotten it out of committee … maybe even the House … but it appeared it was going to have a lot of problems with Senate leadership so I just made the decision not to let it deteriorate into a donnybrook and see if we couldn’t come back in a less contentious environment.”


Less playing time for Nate Wolters

The Milwaukee Bucks started the NBA season with a roster so beset by injuries that rookie Nate Wolters from South Dakota State University was playing a lot of minutes and was part of the starting five for a while. From Oct. 30 through Nov. 16, he never played less than 24 minutes in a game and he played at least 28 minutes in eight of the nine games. On Nov. 20 and Nov. 22, he played 18 minutes in each. On Saturday night, he played nine minutes and, for the first time this season, he didn’t score a point. The Bucks began the season with two wins and losses. Since then they’ve lost eight in a row, and coach Larry Drew vowed Saturday night he was going to shake things up because of the lack of effort he saw on the court against the Charlotte Bobcats in a 96-72 defeat. What that might mean for Nate Wolters we shall have to wait and see. The rookie point guard so far has 56 assists and 16 turnovers. His field-goal percentage is only .389, and one key reason is he’s made just two of 19 three-point attempts. His turnovers average 1.4 per game, and he’s averaging 1.3 steals and/or blocks combined per game, so he’s basically break-even in that respect. He’s averaging 2.9 rebounds and 4.7 assists, while scoring an average 7.4 points. Using the fantasy basketball scoring system, he’s generating about 20 fantasy points per game. That ranks him at No. 62 among all NBA guards through Saturday, one slot behind Kirk Hinrich, the Chicago Bull who played his high school ball in Sioux City, Iowa. Topping the guards’ ranks is Chris Paul of the L.A. Clippers at more than 48 fantasy points per game. I remember watching Hinrich play in his rookie season; he got smoked quite often in the tougher, faster NBA game. He’s grown into a tough, smart, scrappy player. I sense the same future for Nate Wolters if given the chance.  For the sake of the Bucks and for the sake of Nate Wolters, let’s hope he starts seeing a lot more minutes again.

The morning after: GOED, Benda, EB-5, Northern Beef, Rounds

So what did we learn Friday?

We now know that a federal grand jury was gathering information about South Dakota’s state government. The existence of a federal grand jury takes the ongoing story to a new level of significance.

We now know the federal grand jury wanted eight sets of information. We know one dealt with Richard Benda regarding his travel while he was secretary of tourism and state development for then-Gov. Mike Rounds.

We don’t know the other seven things the federal grand jury wanted. Neither side would release a copy of the federal subpoena. So we don’t know where the grand jury was looking.

We now know that, according to Gov. Dennis Daugaard, there was some sort of hole in the state government’s travel-billing system.

What we don’t know was Benda was a thief, who purposely exploited that hole, or he was sloppy in doing his travel expenses, when he double-billed for three airline tickets to China and Las Vegas.

We now know Northern Beef received a $1 million state Future Fund grant in January 2011 that was authorized by Rounds on Dec. 8, 2010, during his last weeks in office for the company to pay for construction and equipment expenses.

We don’t know whether Benda was involved in the diversion of $550,000 of that money from Northern Beef. We do know the $550,000 was used for pre-payment of fees charged to EB-5 immigrant investors.

We know from state records that EB-5 investors loaned $500,000 apiece to the project using a loan pool. We know that fees were charged to EB-5 investors to pay commissions and expenses to agents in their home countries and to SDRC. That is the EB-5 center that has been operated at Aberdeen by Joop Bollen for South Dakota projects.

We know Benda and Bollen signed a state contract in 2010 (that was negotiated in 2009) giving SDRC the exclusive rights to handle EB-5 matters the state Department of Tourism and State Development and the Governor’s Office of Economic Development.

We know that Benda had been told after Daugaard won the November 2010 election that he wouldn’t be working in the Daugaard administration. We know that Benda knew that at the time Rounds authorized the grant.

We know, from Daugaard, that Benda then went to work for SDRC.

We don’t the basis for Rounds’ statements Friday that Benda demanded the EB-5 fees be pre-paid with the $550,000 from the $1 million grant.

We know that state Attorney General Marty Jackley reported Benda’s double-dipping to U.S. Attorney Brendan Johnson.

We know that Jackley reported the diversion of the $550,000. We know Jackley didn’t use Benda’s name in relation to the Northern Beef diversion. We know that Jackley didn’t use Joop Bollen’s name, either.

We know that Jackley explained the relationship between SDRC and the Hanul law firm, based in California and South Korea, in the section of his letter regarding the diversion.

We know that Jackley said his investigation is closed. We know that Jackley, who was the previous U.S. attorney for South Dakota, said federal authorities have jurisdiction over EB-5 matters. We know Jackley said he will assist federal authorities regarding the $550,000 diversion.

We know that both Gov. Daugaard and former Gov. Rounds focused on Benda in their remarks Friday.

We don’t know what to expect next from the federal investigation.

We know from previous reporting in the past few weeks that South Dakota’s use of EB-5 expanded greatly during Rounds’ time as governor. We know that state government’s contract with SDRC was terminated Sept. 19 after Jackley briefed the Daugaard administration on the findings of his investigation.

We know federal authorities blocked at least two EB-5 loan pools for South Dakota projects after the investors already were on board. One was halted in 2012 for the Iberdrola wind farm known as Buffalo Ridge II in Deuel and Brookings counties. The other was halted in 2013 as a third round of EB-5 loans for the Dakota Provisions turkey-processing and meat-packing operation at Huron.

We know the Daugaard administration gave approval to SDRC for those two and the approvals came after SDRC has already established them.

We know the Daugaard administration blocked at least one new one requested by SDRC, related to Northern Beef, in May 2013.

We know Richard Benda was found dead Oct. 22 and Jackley’s investigation determined he died on Oct. 20 from a self-inflicted gunshot wound to his abdomen. The only weapon found at the scene was a 12-gauge shotgun.

We know he had obtained legal counsel and his lawyer, Mike Butler of Sioux Falls, talked to law enforcement on his behalf. We also know that Butler was surprised that he would have killed himself.

We know there are state and federal elections in 2014, with Daugaard possibly facing a primary-election challenge for the Republican nomination for a second term as governor, and Rounds facing a primary election with three challengers currently for the Republican nomination for the U.S. Senate.

We know legislators will want to know more. We know some of their reasons will be political.

We know a federal investigation will remain under way, because of the $550,000 diversion for the EB-5 fees.

We don’t know if the diversion broke state law.

We don’t know if we will learn the seven other things the grand jury wanted to know from state government.

We know there is more to be explored about the U.S. Citizenship and Immigration Services’ approval of the expansions of EB-5 in South Dakota during the first and second terms of the Rounds administration.

We know there is more to be learned about the federal official who subsequently left USCIS and then worked alongside SDRC’s Bollen in recruiting EB-5 investors for South Dakota projects.

We know there is much more to be learned about the EB-5 loan pools and projects, and the people involved in the projects, that were developed from 2008 through 2013.

The four posts below

This is an explanation of the four posts below. The post at the bottom titled “…a self-inflicted gunshot wound…ruled a suicide.” was written this morning, prior to the release of information about the GOED investigation. The post second from the bottom titled “Breaking: Results from GOED investigation” is a timeline and explanation written after the release of the information. The post third from the bottom/second from the top titled “Gov. Daugaard’s statement on Benda/GOED investigation” is his explanation to the public about the circumstances and results of the investigation. The post immediately below, titled “Update: Letters between Seward, Jackley and Daugaard” features the two letters between the governor, his legal counsel and the attorney general.

Gov. Daugaard’s statement on Benda / GOED investigation

Gov. Dennis Daugaard issued the statement below this afternoon:

Last month, I announced that I had learned of alleged misconduct at the economic development office, prior to my administration, and that I had asked Attorney General Marty Jackley to investigate. At that time, I was not able to discuss fully what I had learned, or what was discovered in the investigation that followed.

After I was elected Governor in 2010, I opted not to retain Richard Benda in my administration. I made that decision because I wanted to refocus our state’s economic development efforts. I was not aware of any alleged wrongdoing at that time. I also reorganized the cabinet in a way that divided the Department of Tourism and State Development into three smaller departments. One of those departments is the Governor’s Office of Economic Development, or GOED. I appointed Pat Costello to lead that office. 

Last spring, federal investigators contacted GOED and requested certain travel vouchers filed by Richard Benda during his time as a state official. I was not aware of this federal investigation until their request was received, and I still do not know the nature or extent of the federal investigation. I am aware, however, of numerous media reports indicating that there may be an ongoing federal investigation involving Northern Beef Packers and the EB-5 program.   

The state promptly provided the travel vouchers to the federal investigators as requested. We also examined the vouchers ourselves, and discovered instances in which it appeared Mr. Benda had double billed the state for his travel. A procedural weakness made the double billing possible, and there is no evidence that any other state official was aware of it. I have instructed my staff to adopt changes in procedure to prevent this in the future and to seek outside guidance to identify additional weaknesses and potential safeguards. 

After I learned of the double billing, I also asked Attorney General Jackley to investigate. That investigation began immediately and continued into this fall. Investigators interviewed dozens of witnesses and scrutinized thousands of documents.

Richard Benda was found dead of a gunshot wound near Lake Andes on Oct. 22, 2013. Attorney General Jackley has now released the results of the autopsy and concluded his investigation into the death of Richard Benda. Late yesterday, the Attorney General submitted to me the findings of the investigation I requested. Today, I am releasing both the letter to the Attorney General requesting that investigation and the Attorney General’s findings. 

In summary, the Attorney General found evidence revealing three instances of double billing and double payment. The three instances of over-payment total $5,559.80. The Attorney General’s letter also discusses the redirection by Northern Beef Packers of $550,000 in Future Fund grant funds for a payment to South Dakota Regional Center for EB-5 loan monitoring in January of 2011, after Richard Benda had left state government and was an employee of SDRC. Because the EB-5 program is a federal program, federal authorities have primary authority to investigate, and theAttorney General continues to assist in that investigation. 

Members of my administration were briefed in late August about the progress of the Attorney General’s investigation. Based on what was learned from that limited briefing, GOED Commissioner Costello terminated, for cause, the state’s contract with SDRC to administer the federal EB-5 program. I also directed that an independent audit and review of GOED be conducted. As I have said, I have no reason to doubt the integrity of those who work at GOED and I believe this review will demonstrate that they are worthy of the public’s confidence. That review will be made public when it is completed. 

I was not able, earlier, to disclose that Richard Benda was the target of the investigation, or to discuss any specifics, because the ongoing investigation into his death was potentially intertwined with the investigation into his alleged misconduct. Now that the investigation into Mr. Benda’s death has been concluded, I believe I can now share these details with the public. 

This is a sad situation. Richard Benda’s death leaves questions that may never be answered.  A betrayal of the public trust can lead to a loss of that trust, and it is a tragedy if the bad actions of an individual lead us to lose confidence in the many public servants who work hard on behalf of their fellow citizens. As Governor, I am going to take this opportunity to make improvements at GOED and do what I can to ensure that it cannot happen again.


Breaking: Results from GOED investigation

Gov. Dennis Daugaard released results this afternoon from the investigation he requested into the Governor’s Office of Economic Development regarding alleged misconduct prior to his administration taking office in 2011. State Attorney General Marty General found wrong-doing involved in travel vouchers for trips to China for recruitment of EB-5 immigrant investors and in diversion of $550,000 from a state grant that was to help the Northern Beef Packers project in Aberdeen.

Below is a timeline that explains the events.

March 18 – Federal grand jury serves subpoena on custodian of records for Gov. Dennis Daugaard’s office. Eight sets of records are sought.

April 8 – Governor via legal counsel James Seward sends letter to state Attorney General Marty Jackley requesting investigation into travel vouchers for Dec. 14, 2009, airline ticket to China and March 10, 2010, airline ticket to China. Both involve EB-5 immigrant investments.

Sept. 19 – Pat Costello, commissioner of economic development in the Daugaard administration, terminates state contract with SDRC, the Aberdeen-based company that manages EB-5 immigrant investor activities in South Dakota for state government. No reason is given.

Oct. 22 – The body of Richard Benda is found on a farm near Lake Andes. It is determined he died two days earlier on Oct. 20. He appears to have died from a gunshot wound. Benda was secretary of tourism and state development from 2006 through 2010 in then-Gov. Mike Rounds’ administration. Benda wasn’t retained by Daugaard’s new administration in 2011.

Nov. 21 – Attorney general announces results of investigation into Benda’s death. Jackley says Benda died from a self-inflicted gunshot wound that is ruled a suicide.

Nov. 21 – On same day Jackley sends letter to Daugaard with three major findings from the travel investigation:

Jackley says double billing and payment were found regarding two airline tickets to China on Nov. 1, 2009, and Dec. 8, 2009;

Jackley said another instance of double billing and payment was found regarding a third airline ticket to Las Vegas on Jan. 11, 2010; and

Jackley said funds were improperly diverted from a $1 million state Future Fund grant intended for Northern Beef Packers Limited Partnership that was issued in January 2011.

The grant was for construction and equipment expenses. It had been approved on or about Dec. 8, 2010, while Benda was still secretary and Rounds was governor. Future Fund grants are made at a governor’s discretion.

Jackley said $550,000 was diverted to pre-pay EB-5 loan monitoring fees to SDRC. Benda had signed the EB-5 management contract with Joop Bollen, president of SDRC, in 2010.

Jackley said that because “the individual who submitted the (travel) vouchers is deceased, there will be no further action” by his office on that part of the matter.

Jackley said federal authorities have jurisdiction over the EB-5 program and he said he would continue to assist them regarding those matters including “the impropriety of the payment” of the $550,000.

Jackley specifically stated SDRC used the services of the California and South Korea-based Hanul Professional Law Corporation to identify and recruit potential EB-5 investors.

Nov. 22 – Daugaard publicly releases his April 8 letter to Jackley and the Nov. 21 letter from Jackley regarding the investigation.