Friday, April 29, 2016

Boehner calls Tea Party Darling Ted Cruz "Lucifer In The Flesh" And A "Miserable Son-of-a-bitch." So How Does SD's Tea Party React?

     After former U.S. House Speaker John Boehner dumped all over the Tea Party's favorite U.S. Senator Ted Cruz yesterday I  caught a whiff of some long-standing frustrations
How Boehner Sees Cruz
(photo from youtube)
boiling over in Boehner's denunciation.  
Besides violating Ronald Reagan's famous 11th Commandment ("Thou shalt not speak ill of any fellow Republican") by conflating Cruz with the devil and calling him not merely a son-of-a-bitch but a "miserable" son-of-a-bitch, Boehner went on to note that he'd gotten along with almost everyone, Democrats and Republicans--including Donald Trump, with whom he's a golfing and texting buddy.  

     That last bit, of course, makes Boehner's smackdown  plenty laughable, but given the recent history of Boehner's tenure as Speaker of the House, his intemperate lashing of Cruz had some nuance to it.  First off, Cruz has the endorsement of the largest Tea Party group in the country, and his long-standing identification with the TP has made him their unofficial standard-bearer in Congress.  His 2013 marathon speech denouncing Obamacare for 13 hours straight gave him rock-star status among his TP compadres in both houses, emboldening their caucus in the House of Representatives to attach themselves to Speaker Boehner's side as a persistent political thorn that he never entirely shook off.  Indeed, on leaving the Speakership last September, Boehner angrily and bitterly told Face the Nation that Tea Party conservatives are "hucksters" and "false prophets," essentially blaming them for the government's dysfunction.  
     Considering the relish with which Boehner cast his bile-laden invective all over Ted Cruz, you had to figure that some old scores with the Tea Party were being settled.  It certainly made me wonder if the Republican establishment isn't seeking a way to use what they hope is an obliteration of Ted Cruz as a way of burying not only the candidate but his philosophical underwriters in the TP as well.  So how's that shaping up around here?  Gordon Howie was kind enough to give me some local Tea Party perspective today.  Republican Howie, from Rapid City, is a
He didn't Get Mad
He Got Even
(photo from
former SD state rep and senator--and also the founder of SD's Tea Party affiliate Citizens For Liberty. He told me that he isn't surprised by Boehner's broadside because it's typical of establishment politicians to attack their principled counterparts who simply will not yield when it comes to compromising their beliefs and values.

     There's an admirable purity to Howie's take, which I think has its validity.  My view leans to the pragmatic and tends to see Tea Party intransigence as a giant pain, so to that extent I don't mind watching Cruz get verbally pummeled as badly as he just did. That Trump the dealmaker working with practical realities is building his lead against a confirmed ideologue is probably part of a trend that has been working against the Tea Party of late.  Howie gives me some confirmation of this by noting that in '09 when his group formed it was typical to get a thousand or more  people to turn out to one of their meetings.  Lately that number has dropped to a couple of hundred.  I suspect that this is part of a national trend that began since an across-the-board wipeout during the 2014 primary season,  A Republican repudiation of their de facto leader Ted Cruz would be a fitting farewell to these obstructionists.  

Saturday, April 23, 2016

Mountain Bikers Vs. The U.S. Forest Service In The Black Hills. What Would Cruz Do? And What About Trump?

     A loss of bureaucratic patience a few weeks ago by a district forest ranger in the central Black Hills led to a take-no-prisoners threat to local mountain bikers who've been creating
 Turn It Over To The States
And Then What?  No Thanks
unauthorized trails in the hills.  
District Ranger Ruth Esperance sent area mountain bikers a letter warning them that continued development and maintenance of unauthorized trails could result in penalties of $10 thousand and six months in the slammer. The bikers' response? They conducted their weekly ride on one of the unauthorized trails as if they--imagine this--owned the place.  Just who do those bikers think they are?  

    Esperance's gratuitous threat was met with the indifference it deserved.  As a long-time lover of hiking in the Black Hills, I've encountered numerous bicycle trails and have yet to find one that has scarred the landscape or diminished the pristine beauty of the forest that it's in.  Meantime, logging has disrupted the essential nature of so many sections of the hills that to be annoyed by the virtually invisible, glorified tracks that make up a bike trail seems like a wildly disproportionate reaction to a bit of alteration that is neither catastrophic, lasting nor aesthetically devastating as logging and mining ventures have been over the centuries.  Ms. Esperance should lighten up.  There's a better way to resolve this thing than to go public with threats of big fines and jail terms.
     Meanwhile, as ever, there's a bigger picture to consider.  As it happens, the matter of who owns and who operates these federal lands is part of the Republican presidential primary conversation.  Considering how much federal land, either National Forest or National Grassland, we have in South Dakota, most of it here on the west end of the state, the U.S. Forest Service is a major partner in its management.  Note that I used the word "partner," not "landlord."  Having business near the Buffalo Gap National Grasslands on the east end of Pennington County, I was around when the ferret-reintroduction program was begun back in the '90s and remember all too well the emotional issues that surfaced when the USFS closed off prairie dog hunting and poisoning on land that local
Not So Fast
What Will The States Do With It?
(photo from
ranchers used as rangeland for many years, generations actually.  The resurgent population of prairie dogs, a prime source of food for ferrets, also essentially ruined the land for grazing.  

     So where does Ted Cruz stand on this?  He's been unequivocal:  last month he told an Idaho crowd that "we need to transfer that (federally owned) land back to the states or even better, back to the people."  I'm kinda sorta with him on this because management of local land by D.C.-initiated fiat can be a pain, as we've seen.  On the other hand, who knows what would happen to that land once state politicos get their hands on it?  On balance, I don't think that risk is worth taking. Donald Trump has already said he doesn't "like the idea" because "you don't know what the state is going to do."  Of course, he's also said "it's not a subject I know anything about,"  so who knows how his thinking will evolve? Still, contrasting what we know now about the two attitudes, you can see why ideologically-committed conservatives embrace Cruz and shun Trump. Where do I stand?  Unless a Cruz-style transfer involves operations and management only, not ownership, I have to go with Trump on this one,   

Sunday, April 17, 2016

Looks Like SD's Ag Economy Is In For A Tough Year. A Trump Win Will Only Make It Tougher.

     South Dakotans who've been seduced by Donald Trump's bluster about our foreign trade imbalances should come to their senses and think about what his plans about foreign trade
Great.  Just What We Need.
A Trade War When Farm Prices Are In The Dumpster.
(photo from youtube)
would do to South Dakota's number one industry--agriculture.  
His hotheaded threats to build walls and impose huge tariffs on Chinese imports are crazy enough on the face of them, but they're particularly obnoxious in the way they'll affect American farmers and livestock producers.  That all of this comes in the context of the outlook for an awful income year for American farmers makes his campaign promises more concerning than ever.  

    This morning's Rapid City Journal has a story with the disheartening facts. American farmers, according to the USDA, will see this year's total income drop to the lowest level since 2002.  At about $55 billion it will be less than half their 2012 income of $123 billion.  Consider this week's prices in Chicago.  Corn is at around $3.75/bushel, trading at 10 year lows, and down about 60% from its highs of just 3 years ago.  The reason?  As the RCJ piece notes, "the world is awash in corn and soybeans."  
   Given the political environment, the word "world" is the one that needs emphasis when considering what Trump and his trade-war proposals would do to ag producers in the United States, generally, and South Dakota, specifically.  According to the USDA, in 2014 South Dakota's total harvest was worth nearly $8 billion, of which about $4 billion was sold on the export market.  When it comes to livestock I couldn't find data on how much of the meat that's produced from South Dakota-raised animals is exported, but as the livestock markets generally are dependent on foreign exports for much of their value, you can figure that SD livestock producers have a fair amount of their own financial skin in this game.  These are the very folks--and those who
Great.  Keep It Up.  Now Let's Just Hope . . .
That Trump Won't Force You To Eat It.
(photo from
are dependent on the industry (about 125,000 South Dakotans) for their livelihoods--who should be wariest of Trump's wall-building and tariff-hiking threats.  As it turns out, a potentially walled-off Mexico and a tariff-laden China are now consistently listed as being among the top two or three of our state's export markets.

     Just exactly how does Donald Trump think these two countries would react to a peremptory trade provocation like a wall or a stunning tariff hike?  He probably has no idea. One thing you can be certain about, in a world "awash" in corn and soybeans, you can bet that these two immensely important buyers for South Dakota commodities will be shopping elsewhere for their needs.  Just to give you an idea of how nasty it can get, in 2009 Mexico jacked up duties by 25% on U.S. farm goods during a NAFTA-related dispute.  The National Potato Council says that their members lost about half their business ($70 million) with their third largest market. 
     Starting a trade war just as South Dakota farmers are experiencing their lowest prices in a decade is senseless and self-punitive.  Fortune magazine, which knows something about how global business gets done, says of Trump's plan, "it would likely expose the largest U.S. export sectors to steep duties, including aircraft, semiconductors, corn and soybeans (emphasis mine)."  Can you imagine a Chinese grain buyer even considering buying heavily tariffed American commodities in a world where everyone else is scrambling to sell their ultra-cheap products unburdened by American duties?  I can . . . and I just don't even want to think about it.  


Saturday, April 16, 2016

Memo To SD Attorney General Jackley: Can We Get An EB-5 Cash Flow Chart Like The One Below?

Following The EB-5 Money In Vermont
VT's AG Sorrell 

(photo from

     This pic just turned up on Cory Heidelberger's excellent blog Dakota Free Press, and like Cory, I'm green with Vermont-envy just now.  Turns out that Vermont's legal appartus has moved itself into position to deal with alleged fraud in that state's handling of its "cash for green cards" program known as EB-5. Though the State of Vermont is still pursuing this as a civil case by filing lawsuits against some developers involved in the scheme,  the state's Attorney General William Sorrell likened the venture to a "bank robbery."  Criminal charges could still be filed according to news sources there, by both the state and the U.S. Attorney. Vermont's position is that it is obligated to make sure that state securities laws weren't violated and that foreign investors, who claim losses by fraud amounting to hundreds of millions of dollars, have their interests protected.
     I can only wish that South Dakota would approach our own EB-5 fiasco with similar zeal and determination.   Our situation doesn't exactly parallel Vermont's.  For one thing, our criminal justice system has stepped in.  A couple of weeks ago SD Attorney General Jackley filed criminal charges against South Dakotan Joop Bollen, whose tenure as the private operator managing the state's EB-5 program has seen the state lose more than $100 million according to the non-partisan Center for Immigration Studies.  
     The matter of whether Bollen was the only principal involved in this mess is still a question that has to be answered.  The 2014 suicide of his associate (and former state official) Richard Benda only adds to the natural curiosity--some would say suspicion--about the web of conspirators/accomplices/unknowing dupes that were caught up in Bollen's scheme . . . and this is where my "Vermont-envy" kicks in.  If you read my link to you'll come away mightily impressed by the investigative effort put into this endeavor by VT state officials, most notably Attorney General Sorrell.  Sorrell's flow chart pictured above no doubt creates a "follow the money" trail that makes the connections clear and compelling.  Up to now what has been most lacking in South Dakota's investigation--if there indeed has been a comprehensive investigation--is some graphic rendering of how and where the money moved around, along with some table organized along the lines of which public officials and private individuals were involved in (or indifferent to) the transfer of a good deal for the state to the private hands of Bollen.  A timeline would also be nice. 
     Here's hoping Attorney General Jackley and other South Dakota investigators can provide us with a complete picture.  I want to see the faces that show up on it.   

Addendum added @1652 on 4/17:  Commenter David Newquist provided this link to a news story about some comments regarding the EB-5 program made by Vermont Democratic Senator Patrick Leahy in connection with legislation amending the program that he's supporting in Congress.  If his remarks on the Senate floor call attention to South Dakota's fiasco, the reaction from our congressional delegation will be worth noting here. 

Thursday, April 7, 2016

Why Doesn't Senator Rounds Like The New Fiduciary Rule? It Seems Sensible Enough. Brokers Should Be Up-Front About Who They Represent.

        It's good to see that the concept of the customer "coming first" has just been added to the rulebook governing brokers and other financial advisors who deal in retirement fund
Conflicts Of Interest?
I Want To Know About Them
The U.S. Department of Labor, which is charged with overseeing the handling of retirement funds by professional money managers, yesterday announced the implementation of the "fiduciary rule," which will force the industry to disclose conflicts of interest when it comes to advising clients.  After the President's Council Of Economic Advisors studied and concluded that $17 billion a year is being lost by many investors to brokers who steer clients to investments that are more suited to the brokers' income than their clients' needs, DOL set in motion and implemented this rule to make brokers disclose any conflicts when advising clients.

     I understand the pushback that the rule is getting from the industry.    Having been a registered broker-dealer with the Securities and Exchange Commission and a registered Commodities Futures Introducing Broker with the Commodity Futures Trading Commission, I spent a couple of decades complying with rules and regulations that seemed onerous and unnecessary and intrusive and damned expensive.  But as things turned out a few years ago, they didn't go far enough.  That's why even though the "fiduciary rule" will hit most brokers with the same force that continually bugged me, it's a good add-on.  As the crash of '08 demonstrated, the industry needs all the transparency that can be forced on it.  That a broker has to demonstrate to a client that the broker might have a compelling personal interest in a suggested investment seems like pretty sensible stuff to me.  
     Why our U.S. Senator Mike Rounds doesn't see it that way makes no sense. Rounds yesterday issued a statement opposing the fiduciary rule, saying it will "have harmful consequences" for retirement savers, that it "will limit the availability of retirement investment advice," especially for "low- and moderate-income Americans." He says that the rule is just another
Invest This
I Know I Can Trust You Now
of the Obama administration's "undue financial burdens on already overtaxed Americans."  I dunno. That sounds like a lot of political hooey to me.  I doubt that brokers will be particularly overburdened by explaining their own financial relationships with the investments they promote to their customers. Seems to me that this should be an essential part of a broker's advice.  

     As to limiting services to "low- and moderate-income Americans," Rounds needs to explain how that would come about because of the fiduciary rule.  A simple and straightforward document prepared by every broker explaining individual and corporate connections to recommended investments can't be that hard to produce. The mega financial advisor-servicing firm LPL (14,000 advisors in the U.S./at least 10 within two hundred miles of the Black Hills) even told the Wall Street Journal that "it was pleased" with DOL's changes to the fiduciary rule. The fact that a raft of other brokers are fighting against this required disclosure makes them look kind of suspect to me.  What are they trying to hide?  And why is Senator Rounds standing with them in their battle against transparency?  

Wednesday, April 6, 2016

Guest Post: "How Race, Ethnicity, Migration And History Have Affected 2016 Votes" By Ted Venegas

In the aftermath of Wisconsin, the media is going to tell you that Trump finally shot himself in the foot with his comments, that people are finally starting to turn away from him. There's very little evidence of that. His abortion comment happened on March 30. The polling in Wisconsin after the comment was the same as it was before. His numbers are pretty similar after his vicious attacks on Heidi Cruz.

Trump was never strong in Wisconsin. It's one of the states, like Iowa, that Ben Carson led at one point during his surge. Consolidation of support after some candidates dropped out has truly hurt Trump. In Wisconsin, he has hard core support, like he has had in other places, but the rest of the electorate was clearly looking for someone else. There is no ceiling for Trump at 35 percent. He's polled nationally over 40% for a month. He's cracked 40% in 10 states and over 35% in several others. So why not in Wisconsin? Or Iowa? Or Minnesota? Or Kansas? Or Utah? Or Idaho, Oklahoma or Nebraska?

Part of the reason in the western states is Mormonism. Sure Mormons are "nice" people and all that, but a lot of people are nice. As an aside, when you see someone use "nice" as analysis, they are talking out of their asses. I live in Illinois, and there are tons of nice people here, yet Trump won it. Same with Ohio and Michigan. Mormons don't like Trump for two reasons. First, they are against his immigration policies. Second, his attacks on Muslims hit a little too close to home since they are also a religious minority. They also are outside his demographic region since many are well educated and most are weekly churchgoers.

But the upper non-Rust Belt Midwest is not known for its Mormon population. Why has it been resistant to Trump? Part of that has to do with ethnicity, and part with migration patterns. We're about to go down a long and winding road, but bear with me. There's a payoff.

In my US History classes, part of the curriculum involves "old" vs. "new" immigration, another part involves the two waves of the Great Migration of Southern blacks to the North. The first large wave of immigration from Europe to the US was sparked by Napoleonic Wars in Europe. The end of those wars meant the end of service for many men in Northern Europe, including Germany, the Netherlands, Scandinavian countries, and England. Industrialization transformed those economies and made employment difficult to come by. So waves of these "old immigrants" came to the US. Where did they settle? The upper Midwest where they gained their own land and farmed it. A vast majority of these people settled in homogenous regions in these states. We're taking about Minnesota, Iowa, North and South Dakota and...Wisconsin.

The Irish immigration story is different. The first wave involved skilled workers, and they settled mostly in Appalachia. The second wave was poorly educated and unskilled. They came as a result of the Potato famine. Industrialization caused them to settle in the cities on the East Coast. They were reviled because of their lack of education, their accents, their Catholicism, and the fact that they were competition for labor. This caused them to ghettoize themselves into packed and poor neighborhoods that closely bordered neighborhoods of other ethic make ups.

Then came the "new immigrants." Russians, Italians, Greeks, Polish, other Eastern Europeans, natives of the Balkans. Few spoke English. Most were uneducated and unskilled. They were also reviled, to the point where in the 20s, in the aftermath of WWI, the US passed the National Origins Act to stop them from coming.

These people settled in the East Coast and in the Rust Belt and got industrial jobs in the cities and in the immediate surrounding areas. They also ghettoized by necessity because of common language and job availability. Upton Sinclair's famous socialist screed, The Jungle, was about the plight of these Eastern Europeans workers in the stockyards of Chicago.

The Great Migration involved the descendants of slavery, and it lasted for decades. There were many reasons for it: the fear of white violence, the boll weevil infestation in the cotton crop, the poor subsistence level for tenant farming, industrial employment availability especially during wars when white males were abroad fighting, and propaganda type prodding to migrate by black publications like the Chicago Defender, which even claimed that winters were milder up north. (Ha!) Black people wound up settling in the same cities and surrounding areas where Irish and new immigrants lived. Large numbers were also lured to work in the coal mines in Appalachia with the Scotch-Irish and with Eastern Europeans, specifically because the tensions among those groups were so high that they were unlikely to unionize.

This has had effects that last even to this day. It mostly has to do with employment competition, but racial fear is a factor as well. For example, in Appalachia, when the coal mines used more automation after WWII, job competition became intense. We've seen a long series of racial conflicts in these areas since these migrations happened. Race riots in major cities. Bussing standoffs like those in Massachusetts. MLK's Freedom Campaign in Chicago which led to major protest from white ethnics in the suburbs who did not want their neighborhoods integrated for fear of the violence they saw in black areas of the city. Shoot, you can go back 100 years before that, when Irish rioters protesting the Civil War draft indiscriminately killed any black person they could find.

So how does all this affect the 2016 election? Racism is not as prevalent as it was in 1863, nor as it was in 1919, nor as it was in 1966, nor as it was in 1975, nor as it was in 1992. But it's still there. When people are fighting for jobs, especially uneducated people (Trump supporters?), it can cause racial polarization.

When whites see black people abandoning nonviolence and destroying their own cities in the intermediate aftermath of the passing of the Civil Rights Act of 1964, the Voting Rights Act of 1965, and several Great Society programs targeted at black people, they can come to a reasonable conclusion from their perspective that black people are ungrateful. There was fear of the Black Muslims, Black Panthers, and the Black Power movement that lasted into the 80s. There was the emergence of gangsta rap in the late 80s and 90s, and the fact that many white kids embraced it. There were the LA riots and the OJ trial, where black people foolishly celebrated the freeing of a likely double murderer. Couple this with the decay of urban marketplaces and schools, and from the white perspective, this can give some whites the impression that black people are dysfunctional. Obviously the explanation for these phenomena is not that simple, but it can be without proper research of the issues, and most people don't have the time or inclination for that. Combine that with affirmative action in the workplace and on campus, the expansion of the social safety net to the poorest of people, the fraud that comes with that, and the slow creep of the PC culture in schools and in the marketplace, and these people can feel like they're under attack.

So let's apply this to today. Anyone paying attention to the campaign knows that Trump has made explicit racial appeals. He kicked off the campaign by calling Mexican illegal immigrants rapists. He has decried Islamic immigration. He has defended police officers no matter what they do. He talks about the good old days when protestors used to go off on stretchers, a particularly galling image for black people who remember or have studied the civil rights movement. And let's not kid ourselves, when his campaign uses his Twitter page to retweet false claims from white supremacy groups, or when he pretends to not know David Duke before the SEC primary, they know exactly what they're doing. They're calling to the people I've talked about above: people who are mostly uneducated, people who have seen racial conflict, sometimes up close, and people who fear the way the country is moving. Of course, this isn't the only reason, and many of these people aren't out and out racists. Trade has obviously been a major issue, and the lack of a true Republican economic plan geared at actually helping these people has also been a large factor. But in these exit polls, when people say Trump "tells it like it is," this is what they mean.

Evidence of this is literally everywhere. It's in the higher percentage of his supporters that favor the ban on Muslim immigration. It's in the higher percentage that believe the wall should built, although I admit you don't have to be racist to want that, but it's also no coincidence that a lot of racists do. Shoot, most REPUBLICANS don't believe the wall should be built. It's in the 70% of Trump's South Carolina supporters who wished the Confederate flag was still flying over their statehouse, or in the 76% of his SC supporters who either wished the South had won the Civil War or weren't sure (?!) Or the 85% of Trump supporters nationally who feel that the US has lost its identity, the 91% who feel their beliefs and values are under attack in America today, or the 80% who feel like minorities are getting too much from the government.

You see it in this.

Or this.

Or this.

Or this.

Notice the similarities between this map (click on Trump)...

And this one...

Most importantly, the evidence is how Trump has dominated majority-minority districts in this primary despite the fact that not enough minorities vote in Republican primaries to even register in exit polls.

So what does this have to do with his failures in Wisconsin, Iowa, Minnesota, Kansas,etc.? Simple. These areas have not seen the same kind of racial strife in the past like the Northeast, the Rust Belt, and the South have. As a result, you see less racism in those areas. I was telling my wife about this a week ago. Sure enough, it showed up in the New York Times a couple of days later. Trump does WAY WORSE in places whose residents identify as Northern European ("old immigrants") than he does anywhere else. And that map above with Google searches of the N word? Less searches in the areas that he loses.

So what can we do with this information, other than try to predict the results of future primaries? Well, in my opinion, not much. I'm not much of a "national dialogue on race" kind of guy, and jumping up and down and screaming "you people are racists" doesn't help. Only events change minds. Talking doesn't. The gradual change will continue. The country is getting younger and browner. These factors by themselves will cause the Republican Party to naturally drift away from this stuff, just as it caused the Democratic Party to start the natural drift away in the 60s. The next generation is far more educated, and as we can see from some of the protests on campus, even some of the dumber ones, these kids are not gonna tolerate it.

I think there are good ways to use this information though. First, it can be used to get away from the media coverage of the primaries that focuses on day to day "gaffes" and the mostly ridiculous idea of "momentum," which almost never exists. We'll see it when Trump wins NY, NJ, PA, DE, and WV easily. This information doesn't translate directly to the West Coast, but the different issue of white/Latino relations does, as we've seen in the Arizona primary, and as we could see in California, which has had its racial ballot initiatives in the past like Prop 187.

More importantly though, it's a good historical understanding of how things that happened over 150 years ago still affect us in concrete ways today. I'd love to teach that in a classroom, but it's a little too radioactive for that. I'll just have to settle for sharing it with you. 😀

A wise old writer from Mississippi once wrote: "The past is never dead. It's not even past." Boy, was he right.

Venegas teaches History and Social Sciences at a suburban Chicago high school.  He has a B.A. in History from the University of Southern California and a Masters Degree from Saint Xavier University in Illinois.  

Saturday, April 2, 2016

Hmm. Bollen's Lawyer Is Calling Him A "Scapegoat" And AG Jackley Wants To "Bring Back Integrity To State Government." Amazing Phraseology, Actually.

     Joop Bollen's lawyer Reed Rasmussen piped up with an interesting depiction of his client's legal problems yesterday.  You can get a recap of the situation in my prior post, which is about the
Attorney Rasmussen
Bollen Is A "Scapegoat"
(photo from
criminal charges filed a day ago against South Dakota's EB-5 maven Joop Bollen, who is accused of helping himself to money that the people of South Dakota had a claim on, to the tune of more than a million bucks. Said Rasmussen, the charges are "an apparent attempt to make Mr. Bollen a scapegoat for problems encountered with the EB-5 program."  This statement is so loaded with implications that it can't be dismissed as standard criminal defense attorney jargon. That word "scapegoat" needs some consideration.  By definition in context of current usage, a "scapegoat" is a person made to bear the blame for others or suffer in their place.  If Bollen is the scapegoat that his lawyer says he is, then the defense is taking the position that others are to blame for those EB-5 problems.  

     If I'm wrong I certainly invite Rasmussen to correct and clarify here. Not saying there was a conspiracy to divert millions of dollars that should have gone to the State of South Dakota to Bollen's company instead, just saying that this whole shebang reeks of incompetence and a culture of complacency that seems to have settled on the state government.  That a conspiracy may be buried in that morass of indifference would come as no surprise, especially now that Bollen's defensive posture is that of a scapegoat.  As this story evolves I expect Rasmussen to identify those who are scapegoating his client and shine some light on their involvement in this, even if their ineptitude doesn't sink to the level of criminal involvement.  If Bollen isn't to blame, who is, Mr. Rasmussen?
     As to the overall condition of gross laxity if not gross negligence in South Dakota state government, Attorney General Marty Jackley made a stunning statement, virtually simultaneously with Rassmussen's claim that others were scapegoating Bollen.  Jackley characterized this action against Bollen as "my desire to bring back integrity to state government, and that's part of what this process is."  Go to 19:30 of his radio interview yesterday and you can hear Jackley's remarks in full context.  Three years ago, during the early stages of the drama, Jackley's general position was that his office didn't find enough evidence to pursue further investigation, that
AG Jackley
"Bring Back Integrity"
(photo from
approach coming shortly after the suicide of a key participant in 2013.  The AG changed his mind in recent months as new information came to light.  

     Jackley's epiphany notwithstanding, his comment about bringing integrity back to Pierre stands out as the words of a crusader with truth, justice and the South Dakota way leading the charge. No question that the EB-5 fiasco and the Education Department's utterly bungled handling of federal "Gear-Up" funding have put SD government oversight in a bad light, but to go from there to making the sweeping claim about the lack of "integrity" in state government is quite the leap for a top elected official whose establishment credentials are self-evident.  It sounds to me like Jackley's well known interest in running for Governor may evolve into a campaign as a reformer. That would be most interesting indeed, considering that he'd be running against his own party's entrenched leadership.  "Bringing back integrity to state government" is a statement that has the makings of a platform.  If high-level scapegoaters are at the heart of the EB-5 disaster, they have good reason to keep their eyes on this Jackley fellow.  

Friday, April 1, 2016

Re: EB-5. Bollen Gets Busted For Helping Himself To Public Money. More Compelling Q: How'd He Get Away With It In The First Place?

     The criminal charges just filed by the State of South Dakota against Joop Bollen for his audacious personal use of money that we South Dakotans had an interest in--like everything
Bollen's On The Right
Benda Later Killed Himself
(photo from
else about the EB-5 scandal--raise more questions than they're likely to answer in court.
The EB-5 program is a federally developed plan to encourage foreign investment in the United States by offering wealthy hopefuls a chance to gain entry into our country.  The foreigners get green cards for themselves and their families by putting up $500 thousand blocks of investment capital into projects that are likely to create American jobs.  It's operated through several regional centers in the U.S., South Dakota's being among them.  The one here had been run through a state-operated office by Joop Bollen, whose work was essentially being done on behalf of the state.  That ended in 2009 when Bollen was able to privatize the center, allowing his company (SDRC, inc.) to charge and collect fees from investors for services that had previously been provided by the state.  The money was pretty impressive according to the Washington, D.C.-based Center For Immigration Studies.  CIS believes South Dakota lost about $120 million of such fees.  

     It's a lot of money, and I don't have any reason to question the amount. Others may, but I have yet to see an analysis as comprehensive and convincing as CIS's.  The Sioux Falls Argus Leader provides a pretty good re-cap and timeline if you want to get into the details, but let's just say the whole affair stinks to high heaven. That Bollen was able to hijack a lucrative deal for the state and make it his own private entity is a story that needs to be explained and ultimately exposed. It calls all sorts of questions to mind, principally those involving conflicts-of-interest and the lack of oversight that allowed this to happen.  I mean, some of this stuff is actually unbelievable--particularly the part where Bollen was able to sign a contract with himself on behalf of the State of South Dakota. The "you gotta be kidding me" reaction should make everybody wonder about competence or collusion in Pierre.  
    As to the charges themselves, they come in as a "class-six felony."  I suppose you could call this the low-end of nefariousness on the scale of criminality, but each of the five charges claims that Bollen helped himself to funds that were set aside to be used by the State of South Dakota as a third party in case things went financially awry with any aspects of EB-5 activities.  It's the same as, say, selling a car that has a loan against it without telling the lender.  That amounts to theft.  If true and if
Yes It May
Was Rounds Clueless Or Clued-In?
(photo from
Bollen is found guilty, he could spend up to 2 years in the slammer and pay a fine of 4 thousand bucks on each charge.  Of considerable interest, South Dakota Attorney General Marty Jackley has noted, these are preliminary charges, subject to amendment and addition.

     Meantime, should we get an actual trial, there might be some interesting news about how Bollen was able to get away with this stuff.  If not directly addressed in the trial, at some point during the course--or as a consequence--of the trial I would certainly love to hear U.S Senator Mike Rounds explain how this occurred during Rounds' tenure as Governor of South Dakota.  I also wouldn't mind hearing from the South Dakota Legislature's Government Operations and Audit Committee.   I want to know why that body seemed okay with the SD State Legislature's cursory examination of the mess and its less-than-aggressive pursuit of the truth from Joop Bollen.  As has been all too typical about EB-5 in South Dakota, the more you learn, the more you gotta wonder.