Between the Lines: Ask a simple question: What will it hurt?

By David Lias

David Lias

David Lias

Have you been keeping track (perhaps attempting to keep track is a better way to phrase this question) of the of the Governor’s Office of Economic Development and South Dakota’s EB-5 visa investment program? Alleged wrongdoings of the implementation of this program, particularly in regards to the failed Northern Beef Packers plant in Aberdeen, have warranted both state and federal investigations.

The state has more or less closed the books on its investigation, noting that $550,000 of state incentives to the Northern Beef plant were wrongfully redirected to EB-5 loan monitoring fees, and that then-economic development secretary Richard Benda double-billed for more than $5,000 in expenses related to EB-5 promotion.

Benda died of a shotgun blast to the abdomen on Oct. 20 while hunting alone near Lake Andes. Investigators recently ruled his death a suicide.

State Rep. Kathy Tyler, D-Big Stone City, believes the Legislature should meet before the end of the month to authorize and pay for its own, independent audit into the EB-5 visa program, which funded the bankrupt Northern Beef Packers plant and more than a dozen other South Dakota projects.

Tyler argued the massive failure of Northern Beef, which received several million dollars in state grants and loans, demands a vigorous accounting that tracks every expense.

We’re going to assume that Tyler likely will receive massive resistance from the Republican majority that exists in both houses of our state Legislature. She’ll likely be branded as a Democrat trying only to score political points in the highly conservative atmosphere in our state Capitol building.

Our response to Tyler’s naysayers is a simple question: What will it hurt?

What will it hurt to, as Tyler suggests, call a special session of the Legislature to perform the full “forensic” audit that she is suggesting?

Tony Venhuizen, a senior adviser to Gov. Dennis Daugaard, said the audits and investigations Daugaard has commissioned were both independent and thorough.

The reviews ordered by Daugaard include a review of the Governor’s Office of Economic Development by a Pierre accounting firm that will go item-by-item through programs that haven’t previously been reviewed. That includes the Future Fund, an economic development program that supported Northern Beef.

Daugaard also asked the Department of Legislative Audit, the Legislature’s auditing arm, to audit GOED. That audit runs from the summer 2009 through last summer.

Tyler said that time frame is too short. Although 2009 was when South Dakota changed management of its EB-5 program from a state agency to a private company, it had worked with EB-5 investors for years before that. Venhuizen said further investigations could explore that time frame once the existing reviews are done. Tyler said the state shouldn’t wait.

Tyler isn’t alone as she calls for a more thorough, independent process to take place.

On its Nov. 29 opinion page, the Mitchell Daily Republic wrote:

“We don’t believe the public has lost all trust in state government, but we do believe the circumstances surrounding Benda’s death, his apparent theft of state funds, and his dealings with Northern Beef have lessened the public’s trust in government and do warrant a closer look.

We suggest appointment of a bipartisan panel by the governor — in addition to but independent of the ongoing state and federal investigations — to thoroughly investigate Benda’s death, his conduct regarding the Northern Beef Packers plant both during and after his employment with the state, and any and all related issues. When the investigation is over, a public report should be issued. Benda may be dead, but the public deserves to know what, exactly, he may have done and who else may have been involved.”

Approximately a week ago, the Aberdeen American News opined … “the whole mess around the Governor’s Office of Economic Development, the state’s role in EB-5 and lack of oversight of its own funding mechanisms point to a growing need for more checks and balances in state government.”

Regarding Tyler’s idea for a more thorough audit, the American News editorial board wrote: “We agree. It is time for our lawmakers to take a long, hard study at where the money has been going.

In addition, these lawmakers, who last year turned away so many bills promoting open government, need to focus their indignation at a system of their devising, one that does not shine light on the business of government.

It is a scary proposition to consider how thoroughly some of South Dakota’s biggest projects have been funded through the EB-5 program and other means.

Now is the time to walk back and find out just how viable a system it really was for us, and patch the holes in state government that allowed us to get in this muck in the first place.”

The Watertown Public Opinion also has expressed concerns about the many questions and too few answers concerning Benda, EB-5, South Dakota Beef and the GOED. “Are the problems associated with EB-5 isolated incidents or are they symptomatic of bigger problems in state government that we know nothing about?” it asks in an editorial published Nov. 25.

There’s no way to know if the current ongoing federal investigation will answer questions like these. We believe Tyler’s idea, however, is at least a start at trying to clear up the mystery surrounding this complicated, messy affair involving the GOED, EB-5, Northern Beef, Benda, and South Dakota government.

Regarding the search for the truth, we repeat: What will it hurt?

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