Gov Daugarrd , Mike Rounds and Jackley do NOT deserve to be elected. Cliff Notes Version of the EB-5 Visa Program in South Dakota, a Rerun Aug 10 by kathytyler2012 With so many South Dakota daily newspapers writing about the necessity of a deeper investigation into the state’s EB-5 scandal and Governor Daugaard’s weekly address touting his thorough investigation through three audits into the issue, I decided to rerun a previous blog of mine, paraphrasing a bit. The citizens of South Dakota deserve to know the truth; the audits covered part of the issue back to 2011. Things had gotten way out of hand before that. The EB-5 (EB stands for employment based) visa program is a nationwide program that gives foreign investors and their families green cards and lawful residency in the US for a $500,000 or $1,000,000 investment in a business project. There are 5,000 – 10000 of these green cards available each year. The program is run through regional centers—either private or state run. South Dakota’s first efforts with this program were to fund dairy projects, but have expanded. The EB-5 program is not my issue at this time. My issues are with the shenanigans that have been going on with the EB-5 program in South Dakota, especially as it pertains to the beef processing plant in Aberdeen. Yes, there were some good projects partially funded this way, but there are also a couple of failures with millions upon millions of dollars lost by foreign investors, local people, and the state. Up until 2009, the program was run by a state agency called the South Dakota International Business Institute. At that time, the state signed a contract with a private company, SDRC, Inc. to handle the program. The person in charge of the state program is the owner of the private company contracted by the state within a day of his resigning his state position and for a fee of a bit less than $50,000, the amount that requires a bidding process. Do you see a warning flag here? The company’s job was to recruit foreign investors whose money would go into specially created companies that would then loan money to a project. Supposedly the low interest loan would then be paid off within five years. In addition to the investment money, investors paid up to $10,000 per year on top of a $30,000 expense fee. One $35,000,000 loan involved 70 investors. You do the math. The center was making money. I have nothing against making money, but where did the money go? The packing plant started out as a $40 million dollar project and ended up with total investments of over $115 million. The packing plant started having financial issues, recruited more investors, but still had problems. I quote from the Argus Leader: Consider this scenario (one of many that should be discussed). . . A company was created in the British Virgin Islands with the expressed intent of loaning the beef plant $30 million at 29 percent interest. That company was owned by another company in the Cayman Islands, and both companies were run by a third firm that was incorporated in the Caymans but based in Hong Kong. Pretty straightforward, right? To do that [i.e., make the loan] the beef plant backers needed the state banking commission to sign off on the contention that the Virgin Islands company — that was created for the sole purpose of making the $30 million loan — was NOT lending money under South Dakota law. 1. Why not? The proposal received unanimous approval from the state banking commission. To further quote another source: “It appears, therefore, that an anonymously owned, ‘unrelated’ off-shore company created Epoch Star for the purpose of lending money to Northern Beef; but that somehow Northern Beef acquired all of the shares of the lending entity which currently has no value.” So Northern Beef owns the company which was created to lend Northern Beef money. And the company that bought out Northern Beef is an agent for the same company. I could go on, and on. Folks, this is just the tip of the iceberg. South Dakota has poured millions of dollars into this failed project. GOAC’s investigation was just a beginning. It’s time to finish what the Legislature’s resolution started: a thorough investigation. It’s not a political issue as some have claimed. It’s an issue of integrity, honesty, and trust. By the way, since Benda was going to be charged with extortion, who was the person who reported him? What was he going to tell? So many questions; so few answers. Rep. Kathy Tyler kathytyler2012@gmail 605.237.0228
Posted on: Mon, 18 Aug 2014 03:37:37 +0000
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