Jackley: Didn’t talk with Benda, $550,000 restitution “not my call”

By Bob Mercer

State Capitol Bureau

PIERRE – State investigators didn’t talk with Richard Benda before his death last month about their findings that he double-billed and received double payments from state government in 2009 and 2010 for three airline tickets while he was a member of Gov. Mike Rounds cabinet.

State Attorney General Marty Jackley confirmed Monday that neither he nor any of his office’s lawyers or investigators spoke with Benda during their investigation, which was requested April 8 by Gov. Dennis Daugaard.

Consequently Jackley’s office didn’t receive any explanation or offer of restitution directly from Benda.

Jackley said Monday he doesn’t publicly discuss conversations with defense lawyers for people under investigation.

Benda was represented by Sioux Falls lawyer Mike Butler. On Friday, after the public release of the investigation results, Butler said he didn’t expect that Benda would take his own life.

“Richard consulted with me after he became aware that he was being investigated for alleged wrong-doing in connection with (Northern Beef),” Butler said Friday night.

“I had discussions with law enforcement authorities and was more than confident that the allegations were political, not criminal,” Butler continued.

Butler said Monday that Benda didn’t meet with the state authorities.

“I did though,” Butler said. “I had professional and cordial discussions with the attorney general and his staff that focused primarily on the Northern Beef aspect of the investigation and very little on ‘vouchers.’ I did not share their point of view nor interpretation of the case-evidence,,based on what they shared with me.

“Richard was interviewed by the FBI, according to what I was told. He was less than pleased with their accusations. This was before he retained me. He was not called to a federal grand jury,” Butler said.

The investigation came in response to a federal grand jury’s subpoena in March asking the governor’s office for eight sets of information.

The subpoena hasn’t been publicly released. Benda’s travel was one of the eight matters in it. The other seven haven’t been publicly disclosed.

After receiving the subpoena, Daugaard said, travel vouchers were inspected and double payments were found. Jim Seward, Daugaard’s legal counsel, next sent a letter to Jackley asking that the attorney general’s office look into the situation.

In September, Jackley briefed Daugaard and others about the results. Three instances of double-billing and double-payments were found.

Vouchers dated Dec. 14, 2009, and March 11, 2010, used the same credit card receipts, for airline tickets to China on Nov. 1, 2009, and Dec. 8, 2009, according to Jackley.

A third set of doubling up involved vouchers dated March 11, 2010, and April 16, 2010, for an airline ticket to Las Vegas on Jan. 11, 2010, for a firearms-industry trade show, according to Jackley.

Those over-payments totaled $5,559.80, according to Daugaard.

Jackley said an additional finding was the improper diversion of $550,000 from a $1 million state grant to Northern Beef Packers.

Jackley provided that information to U.S. Attorney Brendan Johnson.

Johnson confirmed that Jackley sent him a copy of the letter to the governor but said he couldn’t confirm nor deny the existence of a federal subpoena or a federal investigation.

The money came through a Future Fund grant that then-Gov. Rounds approved in December 2010 during last months in office. The $1 million was released in January 2011 to Northern Beef. It was supposed to be for expenses of construction and equipment at the Aberdeen packing plant.

The $550,000 reportedly was diverted to pre-pay fees charged by recruiters, promoters and agents to immigrant investors.

They wanted to make $500,000 loans to South Dakota projects so they and their families can qualify for EB-5 permanent visas to live anywhere in the United States. Northern Beef received approximately $60 million in loans from two pools of EB-5 investors from South Korea and China.

Discovery of the diversion by Jackley’s investigation led Pat Costello, state commissioner of economic development in Daugaard’s administration, to terminate the state contract with SDRC Inc. in September.

The Aberdeen-based SDRC managed and administered EB-5 matters for GOED under a 2009-2010 set of contracts.

Those documents were signed by SDRC president Joop Bollen of Aberdeen and Benda, who was secretary of tourism and state development in the Rounds administration

Benda died Oct. 20 and his body was found Oct. 22 at a farm in the Lake Andes area. The matter was investigated by Jackley’s office.

Jackley released the findings of the Benda death investigation Thursday, Nov. 21. The cause of death was determined to be a self-inflicted gunshot wound to the abdomen and was ruled a suicide. Jackley said a 12-gauge shotgun was the only weapon found at the scene.

Jackley said a suicide note wasn’t found.

On Friday, Nov. 22, Daugaard’s office released to news organization a copy of his office’s letter requesting the travel-voucher investigation, Jackley’s Nov. 21 letter detailing the results of that investigation and a lengthy statement from Daugaard about the situation.

Daugaard said he couldn’t tell the public that Benda was the target of a state investigation until after Jackley released the death investigation results on Nov. 21.

Jackley wouldn’t say Friday who was involved in the diversion of the $550,000. Daugaard separately said Benda worked for SDRC at the time of diversion.

Benda wasn’t retained in Daugaard’s administration after the new governor took office in January 2011.

Jackley in his letter to the governor didn’t mention Benda’s name in relation to the diversion. Jackley identified SDRC and the Hanul law firm of California and South Korea.

Hanul’s James Park routinely worked with Bollen and Benda on EB-5 matters.

Jackley said federal authorities are responsible for enforcement of laws regarding EB-5 investments, loans and visas because it is a federal immigration program.

Regarding the $550,000, Jackley demurred Monday about seeking its repayment to GOED. He said that is a matter for Northern Beef’s and GOED’s lawyer. GOED uses outside private counsel.

“It may become a restitution issue in any federal criminal matter but that is premature at this point and not necessarily my call,” Jackley said.

Tagged , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>