Thursday, October 22, 2015

Feds Want To Kick South Dakota Out Of The EB-5 Program. Proud Of Yourselves Governors Rounds And Daugaard? Will Somebody PLEASE Set Up An Independent Ethics Commission?

     Yikes.  Despite all the sugar-coating and blame-shifting to a dead guy that South Dakota's
A SD EB-5 Fiasco
Where's The Beef?
(photo from eb-5 news.com)
elected officials festooned on the mess called EB-5, the federal authorities that oversee the "cash for green cards" program took a hard look at what actually happened to its operations under the auspices of SD government stewardship and decided (pending a response) our state should get kicked out EB-5 altogether. The official letter from the Department of Homeland Security, titled "Notice of Intent To Terminate," was sent to the South Dakota Regional Center in care of the Governor's Office Of Economic Development a few weeks ago.  It gives SDRC until October 31 to submit "ALL evidence in opposition to the ground or grounds alleged in this intent to terminate" or the plug on the program gets pulled by the Feds.  

     Given the multi-layered and interconnected chains of  events and participants in this fiasco that lasted for several years, I'd be amazed if South Dakota officialdom could put together a comprehensive (note the letter demanding "all" evidence) case for the state.  Just the same, the drop-dead date of October 31 has to be acknowledged, so the stripping of our state's relationship to the program still hangs in the balance, tenuous as I think it may be. More cogent though is the way DHS reiterated all the issues involving SDRC's  mismanagement of the program contractually overseen by the Governor's office.  Cory Heidelberger summarizes them well at Dakota Free Press.  As you know, the Constant Commoner has been on this frequently since 2013--an effort that I feared was wasted until I got some vindication in the body of the termination notice.  DHS broadly concludes that its termination decision is based on South Dakota Regional Center's failure 1)"to submit required information" and 2)that SDRC did not "serve the purpose of promoting economic growth." The specifics in the letter include phrases like 3)"failure to provide required information," 4) "failure to fully account for capital investments," 5)"conflicting information provided" in required filings, 6)"diversion of EB-5 funds from job creation purposes," 7)"lack  of regional center due diligence, monitoring and oversight," 8)"investor complaints,"  9)"violation of terms of escrow agreements," and 10)"material misrepresentations," 
     You can likely find more conclusions condemning the state's oversight of this program by
Looks Like SD Is Out Of This Market
Will We Ever Know What Happened?
(photo from eb-5.com)
carefully reviewing the link I provided.
But as disgusting as I find all this to be, I'm appalled at the lack of investigatory muscle shown by the South Dakota legislature's Government Operations and Audit Committee at the close of its toothless hearings on this a year ago.  GOAC's lack of determination to get at the truth of this matter is now embarrassingly highlighted by DHS's diligence and its decision to throw South Dakota out of the EB-5 investment program altogether.  

     Will somebody please set up an independent ethics commission for this state?  
     

4 comments:

  1. John,
    What I find alarming in all of this is that we didn't find out about the termination for nearly three weeks and the governor's office, AG Jackley, or GOED have not made any public statement about the termination.
    Throw in the Gear Up controversy and the state has some real problems with accountability and oversight, where does it end, or does it?

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  2. This is what happens when one party holds a super majority - whatever happens under their watch is okay, and no investigation needed. Until the feds show up. And they're probably hoping that it will all go away...

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    1. It will go away, unless feds keep it alive. Mr. (Hi, I'm Marty Jackley and I'm running for governor) will probably try to deflect it by suing the Federal Government for something. That's his usual Attorney General response. Where also is the US Attorneys office in all this?

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