Friday, October 17, 2014

A Quick School On That $120 Million Or So That South Dakota Lost To The Joop Bollen Scam-O-La When Rounds Was Governor

     I had quite an interesting exchange with Jeremiah Murphy on Facebook today regarding the sum that South Dakota was supposed to have lost when the EB-5 business was swiped from the State by Joop Bollen.  It took place on Drey Samuelson's page and probably illuminated the details of the event.  I know the figure of about $120 million has been called into question, and that's the crux of this discussion. Rather than share it ad infinitum on Facebook I thought I'd post it here.  To wit:

  •  Drey, I have not yet seen this point disputed by any officials who might have been involved. As far as I know, none of the financial records have been opened to public view. As Bollen's deposition comes out via Bob Mercer's blog/column (Aberdeen American News) some figures might show up.
  • Drey Samuelson Thanks, John. My guess is that, if it were in error, Rounds' campaign would aggressively challenge it, but all we hear from them on this is crickets. $120M would cover the "structural deficit" that Rounds left the state in, which caused all sorts of chaos (including drastically lowering state aid to education, among other problems).
    23 hrs · Unlike · 1
  • Jeremiah M. Murphy Drey, as Bob Mercer reported in January of 2011, part of the basis for the deficit was state aid to education. Describing the cause of the deficit at the end of Rounds' second term, Mercer wrote: "Legislators repeatedly succumbed to pressure by public school lobbyists for extra money in various forms while Rounds was governor."
    22 hrs · Like
  • Nick Nemec Without regard to education funding there is still $100million or more missing. Where is it? Why hasn't Joop Bollen been charged with some crime for unilaterally issuing and signing a contract with himself?
    20 hrs · Like · 2
  • Drey Samuelson Jeremiah--okay, I'll concede your point. Care to comment on the lost $120M?
    20 hrs · Like · 1
  • Tiffany Campbell Is Jeremiah really blaming education for Round's deficit? SD pays it's teachers the lowest in the nation! Let's go back to 2010 when Dauguuard said there was no deficit, is Jeremiah admitting that Dennis lied in his TV ads?
    20 hrs · Like · 1
  • Jeremiah M. Murphy I quoted Bob Mercer on education funding's role in the deficit. I have no idea if Daugaard lied in his ads. I know the state has always balanced its budget. That's a legal requirement in SD. I'll be curious to see if any money was lost via EB-5.
    19 hrs · Like
  • Tiffany Campbell It is a legal requirement to balance the state's budget, so why does Rounds tout it as a highlight?
    19 hrs · Like
  • Jeremiah M. Murphy Mmmmm, politics?
    18 hrs · Like · 1
  • John Tsitrian We're all curious, Mr. Murphy. What do you suppose it will take for an accounting to emerge?
    17 hrs · Like
  • Drey Samuelson All I know is that rough number $120M-$140M has been used repeatedly as an estimate of how much money the State didn't receive in EB-5 funds that apparently went to Joop Bollen and his cronies, and it has yet to be disputed by Mike Rounds' campaign, or anyone else, for that matter.
    17 hrs · Unlike · 3
  • Jeremiah M. Murphy As I've written under Drey's previous posts, I trust the SD Attorney General and the US Attorney and the state banking commission to investigate and prosecute any misdeeds. I know the $120-$140 million number has been used often. The claim that EB-5 wa...See More
    7 hrs · Edited · Like · 1
  • John Tsitrian Mr. Murphy, Kathy Tyler claims she has documents verifying that number but won't disclose how they came into her possession. You probably know Tyler better than I do (never met her, myself). Do you think she'd be making this up? I'd be amazed if she can't back up that claim, which didn't seem to draw any skepticism from the writer of the CIS piece.
    A state lawmaker says South Dakota taxpayers lost...
  • Jeremiah M. Murphy I don't claim Tyler's making anything up. I'm not claiming anything with regard to EB-5. I'm watching it unfold just like everyone else. The reporter neither supported nor opposed Tyler's claim. She simply reported it (You know, what reporters do.). I ...See More
    2 hrs · Like
  • John Tsitrian I didn't say you were claiming anything, Mr. Murphy. I only asked if you thought she was making things up. My take is that she wouldn't have made such a high-profile announcement without rock solid evidence, which apparently is enough to convince the...See More
    Note: This story by David Montgomery was originally...
  • John Tsitrian And here's a piece of deeper analysis by CIS that just came out this morning that makes Tyler's numbers look plausible:
    There are two reasons why the state of South Dakota...
  • Jeremiah M. Murphy I didn't get into this post to defend EB-5 administration. I just wanted to point our Drey's overreach above. But, I can't help but notice that the "deeper analysis" you post seems to reduce the $140M to $80M and then further indicates that the fees charged by Bollen are way more, multiples more, than any state charges. That would seem to undercut the claim that what Bollen received would have been received by the state had Bollen not privatized the deal. As I said above, I'm watching this unfold. So, far, the unfolding process appears to indicate a diminishing harm than was originally claimed.
    43 mins · Edited · Like
  • John Tsitrian We'll see.
    31 mins · Edited · Like
  • Jeremiah M. Murphy Well, thanks to the article you posted, we are seeing. Thanks.
  • John Tsitrian I note that the CIS piece couldn't get data on fees from most regional centers, but that from those that did release the info, fees ranged from $30k-$55k per investor. If SD were charging the upper end of that already established range it would have been competitive and the sums would have added up quickly by factors of tens of millions. Add in the annual fees of $10k per investor claimed by Jeff Barth in his court filing, and the sums can get to be enormous, especially by the standards of a small state like South Dakota. I'm confident that Kathy Tyler's numbers are solid. As to undercutting the claim that Bollen received more than the state would have, I don't see it. These foreign Investors could have easily abandoned South Dakota if they thought the fees were excessive. Bollen knew his market and successfully collected what the market would bear, and he did so on his behalf instead of the State of South Dakota after conniving the business away from us. Take the last word, and thanks for an illuminating exchange.
    3 mins · Like
  • John Tsitrian

1 comment:

  1. Interesting to see Murphy's take. Wonder who butters his bread?