Monday, November 2, 2015

Is Governor Daugaard Clueless? Last Week He Was Blowing Off EB-5. This Week He's Determined To Get Back In.

       Vacillation is one thing, but a complete about face on a major federal program that can
Why Is This Man Laughing?
Is There Something Funny Going On?
generate hundreds of millions of dollars in revenue and investment capital to South Dakota is another.
Last September 28, the Department of Homeland Security's immigration arm (United States Citizenship and Immigration Services--USCIS) gave South Dakota a "Notice Of Intent" to terminate South Dakota as a regional center for administering the "cash for green cards" program known as EB-5.  There was a serious list of deficiencies within the notice that required refutation by last October 31 in order for USCIS to reconsider its decision to kick South Dakota out of the program.  

     Soon after the news of the notice began circulating (October 23, to be precise), Governor Dennis Daugaard seemed perfectly content to allow the program to lapse in South Dakota.  He told KCCR Radio in Pierre that he "doesn't see a time where we are going to need investment capital from foreign sources" and that "there's (sic) lots of investment capital sitting on the sidelines right here in America."  Daugaard concluded that the domestic money could "be found without the use of this kind of program." Seems simple and conclusive enough.  With the October 31 deadline approaching I doubted that his braintrust at the Governor's Office Of Economic Development (which had the responsibility of handling the SD regional center's duties involving oversight and management of the program and its contractor SDRC, inc.) could come up with a point-by-point response to USCIS's formidable list of the inadequacies it found.  
    I turned out to be wrong on both scores.  First off, a mere 7 days after Daugaard dismissed the
Still Under Scrutiny
When Do We Get The Whole Story?
EB-5 program as an unnecessary source of investment capital, officials in Pierre were aggressively responding to the Notice of Intent and putting everything they had into a refutation that takes up 113 pages of arguments and exhibits.  They want this program back. If you scan it, you'll probably have as many doubts as I do that the compilation was prepared in the week between Daugaard's kiss-off of EB-5 and the response cooked up by his officials (who pretty much pin all the inadequacies on the contractor, SDRC, inc.).  Even if they did get it done on such short notice, it's hard to believe that Governor Daugaard didn't know it was in the hopper.  After all, it is the GOVERNOR'S Office of Economic Development.  Was Daugaard lying when he told KCCR that we don't need investment capital from foreign sources, which is what EB-5 is all about?  Or was he just clueless about the frenetic activity going on in his own Office of Economic Development?  I doubt that he was lying, so I conclude that he was just clueless.  It would be nice to get an explanation from the Governor's office.
     

11 comments:

  1. John, Could a legislative investigation as called for by Kathy Tyler nearly two years ago or as called for at the end of the 2014 legislative session have turned up the problems and had them fixed so that this would have never been an issue with the Feds?

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    1. Hard to say, Lanny. I think the examination by the Government Audit and Operations Committee and the subsequent hearing at the legislature was pretty much a joke. A deeper look and an identification of the people who "mishandled" (Daugaard's word in the KCCR interview) might have opened the events up to the point where they could have been corrected. All conjecture at this point. I think today's editorial in the Pierre Capital Journal pretty much nails it. We need a sea change in the operations of this state.

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  2. ..and the plot thickens! What kind of corruption is our Chicago lawyer in chief trying to obfuscate or reinstate?

    Stop being fooled by Daugaard's fakery. He was, and always will be, a slick Chicago lawyer who cut his teeth on the corrupt streets of the Windy City.

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  3. Something tells me this isn't about Daugaard or the Office of Economic Development. Without an enormous amount of speculation, this almost has to be a Rounds tactic to further try and intimidate and confuse a program that was patently his from the git go. There is higher office and obscured purpose to protect here and there is no better way to confuse a federal investigation than to remodel and re-engineer alleged program deficiencies to excuse historical improprieties.

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  4. We definitely need to see more heat on Rounds, put him in a tough spot by asking him to call for/lead a federal investigation into this. It is a federal program in the Dept of Homeland Security, right? There's money missing, money that went to non-target uses, jobs missing--time for Congress to investigate!

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    1. Considering that laundry list of deficiencies in the Notice of Intent, I'd think that investigators at DHS are checking things out. Phrases like "material misrepresentation" and "diversion of funds" call for some deeper scrutiny in that intent may be involved.

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  5. I'm curious John of your take as a knowledgeable person about finances, if in your opinion, all mismanagement aside, this program is a good thing. In my simple mind it's foreigners, ( apparently being recruited) buying citizenship for 500k.

    How does the failure of EB-5 threaten this citizenship? Do the investors have a say so in which business proposal gets funded?

    I see little children escaping butchers in Syria that can't come to the USA and read about 700(some wealthy no doubt) people buying their way in. And we say "God bless America"

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    1. And we say "Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tossed to me, I lift my lamp beside the golden door!"

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    2. In principle I don't like it. I came over here in 1950 with a boatload of postwar European refugees and still believe that an orderly line of immigrants, processed through legal channels with no regard to wealth, race or country of origin is the best way to manage immigration. In theory I can live with it, considering its aim is to create jobs. In practice I'm dubious about it because it seems to be an easily mineable resource for a bunch of shysters to exploit. I'm about as fed up as you are with the essential unfairness of it. On balance I think it should be done away with.

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  6. The amazing part of all this, is I learned of our past policies toward the Chinese, in book I just finished, "The China Mirage". I certainly was aware of the Chinese "coolees'" part in building the railroads in the western half of this country. What I was not aware of, was what happened to them after that. They were burned out in places in Wyoming and all over the West, because they were taking the good paying jobs that Americans wanted. They were essentially driven back to China and then the door was closed to the Chinese for many years.

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    1. It was appalling indeed. I believe the first anti-drug law in this country was directed at the Chinese in San Francisco, which made opium illegal in the late 19th century with the intent of arresting and deporting Chinese who were a weight on the labor market there after railroad construction slowed down.

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