Wednesday, December 2, 2015

A-one And A-two And A-three, Altogether Gang, Let's Sing The EB-5 "Sue Me, Sue You Blues . . ." **

     Lessee if I got this right.  The aftermath of South Dakota's EB-5 fiasco has turned into a medley of lawsuits.  First off, the State of South Dakota is suing Joop Bollen (actually his corporation SDRC, inc.) for screwing things up in the operation of the program.  That's a-one.  Then we have Bollen counterclaiming that the state messed everything up and wants $1.5 million in
Former Gov. Rounds With EB-5 Investor
A Fateful Handshake(photo from sddp.org)
damages. That's a-two.  Now all of a sudden, I see from
 Cory Heidelberger's excellent blog Dakota Free Press, that 35 Chinese investors are suing both South Dakota and Joop Bollen for $18.55 million, apparently contending that both parties lied about a slew of things and conned them into believing all was hunky-dory with their investments being managed in South Dakota.  And that's a-three.

     You can find details in the links and a very good summary in Cory's blog. I'm grateful to Heidelberger for his yeoman's job in keeping us informed about this bit of unpleasantness, the worst of which is that a key state official named Richard Benda apparently committed suicide on the eve of his arrest for stealing and misdirecting money from the state during his work on the EB-5 program.   The U.S. Department of Homeland Security, which oversees the program through the U.S. Citizen and Immigration Services, got so fed up with South Dakota's mangling of it that they sent us a Notice Of Intent To Terminate our state as a regional center.
     Meantime, has any state official or investigative body ever produced a comprehensive account of just exactly how this mess occurred?  Not that I've seen.  There was a brief investigation a year ago by the SD state legislature's Government Audit and Operations Committee that basically singled out Benda as the fall guy.  It was a pretty lame effort, one that didn't even require Joop Bollen to testify in person--all he had to do was submit written answers to written questions.  A bunch of Perry Masons our elected officials were not.  Just the same little bits
Still Under Scrutiny
After All These Years
(image from ksfy.com)
and pieces of information kept popping up during the past 12 months, culminating to some extent with that Notice of Intent to Terminate.  As part of the process the state has undertaken to restore its status as a regional center for EB-5, the state apparently has to convince the feds that it is doing whatever it can to recover lost public money, which means suing Bollen.  Thus the counterclaim by Bollen, suddenly followed by this week's filing by the Chinese investors who claim they got ripped off by South Dakota and Bollen.  


     Oh well, if getting substantive information from our public officials isn't going to happen, I imagine a lot of details will emerge in the courts as these lawsuits progress, barring some settlements that will scuttle the process along the way.  The Washington, D.C.-based Center for Immigration Studies thinks South Dakota's citizens lost $120 million in this debacle.  As the criminal justice system hasn't been able to shed much light on how it happened, it looks like civil jurisprudence just might.  We'll see, I guess.  If nothing else, I'm anxious to see where this cash-strapped state will find the $18 million if the Chinese investors get a favorable judgement.  


**Thanks,  George Harrison
     

2 comments:

  1. Ah, that photo! That's Governor Mike Rounds shaking hands at the Capitol with Wang Limin, an executive who visited South Dakota in July 2009 to hear Bollen and Benda pitch Basin Electric's Deer Creek Station, which ultimately attracted $110 million in EB-5 investment from 220 Chinese visa purchasers/applicants. http://madvilletimes.com/2013/11/south-dakota-eb-5-program-welcomes-chinese-investment-grassley-raises-security-concerns/

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    1. Thanks for the ID, Cory. Can't tell you how much I appreciate the effort you put into this and so many other topics over at Dakota Free Press.

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