Rounds-Daugaard Hurt SD Reputation with EB-5, Energy Stimulus

The Rounds-Daugaard regime botched its administration of the EB-5 visa investment program. The state hilariously asserts that it should not be punished for our past failure, which sounds a lot like a drunk driver saying he shouldn’t lose his license for crashing into that bus last night.

My local newspaper doesn’t call Rounds and Daugaard drunk drivers, but it does recommend the state give up its EB-5 license:

Control of the EB-5 program pretty well switched hands in 2009, when the state allowed the newly formed private company SDRC Inc. to run it with little to no oversight.

That led to several investigations, lawsuits, at least one failed project, a death and a mess of money that wasn’t necessarily used for its intended purpose.

…EB-5, under South Dakota or the company the state privately contracted with, has run its course. Trying to keep the state’s hand in the program continues to waste the time of officials who likely have other things to focus on.

Not only is the continued pursuit of ability to administer EB-5 a waste of time and energy, and could continue to come at a cost. Pursuing the program is a disservice to those who are already investing and living in our state [editorial board, “SD Must Walk Away from EB-5,” Aberdeen American News, 2016.08.14].

The Rounds-Daugaard regime also mismanaged the stimulus dollars it gladly took to balance our state budget in 2009. We took $23.7 million in Department of Energy stimulus dollars conditioned on improving energy efficiency, promised to fulfill those conditions, and then didn’t:

The state failed to make good on the assurances required by the federal government to enact statewide building code requirements making new homes and commercial buildings more energy efficient, an Argus Leader Media investigation found. Now, a 2017 deadline is looming: In return for taking the energy efficiency money, states have until 2017 to adopt more efficient energy codes and to create a plan to ensure that at least 90 percent of new buildings are compliant.

In South Dakota, there’s no plan because the state has no mandatory statewide energy codes [Jonathan Ellis, “How South Dakota Took the Money and Ran,” that Sioux Falls paper, 2016.08.13].

Ellis reports that a state task force looked closely at the stimulus conditions and decided to gamble that there would be no enforcement. But just like with EB-5, we may lose out on future opportunities:

Realistically, said Maureen Guttman, the president of the Building Codes Assistance Project, which advocates for stronger building codes, the Department of Energy can’t “claw back” the money it gave South Dakota. But if the state expects future funding, that could be put at risk

“I do think they could use it as criteria for future eligibility. Absolutely I do,” Guttman said [Ellis, 2016.08.13].

South Dakota Republicans preach personal responsibility, but they don’t seem to apply that concept to their own administration of federal funds. On EB-5 and now stimulus dollars, the feds are getting wise to South Dakota’s game, and they’re going to hold us responsible for our errors.


18 Responses to Rounds-Daugaard Hurt SD Reputation with EB-5, Energy Stimulus

  1. Donald Pay

    Taking the money and running is an apt description. For the theft of taxpayer dollars: lock ’em up.

  2. South Dakota has become the armpit of the country, no matter how much deodorant you put on it, without a shower, the stench is still there. It’s time to shower that republican stench off of our state.

  3. Richard Schriever

    The standard Republican retort would be along the lines of’ “Yeah, but the government stole it (taxes you know are “government theft” in the TEAbilly dictionary) from us citizens first, so this is just “taking back” what is ours in the first place. Of course in SD what that knee-jerk ignores is how much a welfare queen to the Blue states we are.

  4. Roger Elgersma

    ‘they can’t claw that money back’, why not. We are proud of our huge reserves, what were they saving them for anyways.

  5. How huge, or perhaps “yooge” in your case, Mr. Elgersma, are our reserves, and how huge (yooge) should they be?

  6. Curt Jopling

    “and they’re going to hold us responsible for our errors.” No they’re not. You know it, I know it, and the state knows it. Tax dollars are about all that is left for the greedy bastards to steal. Privatize this, privatize that. Just what do people think is going on?

  7. The most telling part of the Jonathan Ellis article was Dusty Johnson badmouthing the feds for even asking us to do anything in exchange for the handout Rounds eagerly requested.

    It’s clear that the purpose of the state task force was not to comply with the federal request, but 1) to provide cover to make it look like we were actually considering compliance; and 2) to determine whether we could keep the money if we didn’t comply.

    What the federal government asked us to do, enact an energy efficient building code, was not unrealistic. Expecting South Dakota to deal in good faith is unrealistic, as the federal government is discovering with not just with this grant and EB-5, but also with Gear Up. When dealing with South Dakota in the future the federal government might want to send federal staff out to oversee federal dollars instead of running them through an incompetent/corrupt state government.

  8. Mr. Rorschach, tell us what it was like when you were in the government.

  9. Donald Pay

    Lock ’em up!!!

  10. South Dakota’s leaders need to accept responsibility for past mistakes but they don’t seem inclined to do so. That leaves it up to us. We can help bring ethics back to our government by voting “YES” on 22. We can prevent expanding the electoral advantage of incumbents by voting “NO” on 19. And we can prevent gerrymandering by voting “YES” on Amendment T.

  11. South Dakota’s argument to keep it’s EB-5 regional center designation does not look persuasive. They blame the Joopster for diverting investors’ money to unauthorized purposes, but they don’t even attempt to explain why the state wasn’t performing its oversight role. Remember, the Joopster had a contract with the state to run the regional center, and he was working out of an office at Northern State for most of the time. The state created the situation where the Joopster had a license to steal, and the state actually paid him under a contract to do his stealing out of a state-supplied office building. The state’s response to the feds ignores the elephant in the room (pun intended), but that point is not lost on the feds.

  12. The majority party leading the State of South Dakota makes it an ideological strong point to balk any form of regulation, because enforcing regulation is expensive and we should be good stewards of the resources given to us. Despite this, they seem to make the opposite point in their actions. The federal government wanted to stimulate the economy, so they entrusted the state to be good stewards of federal tax dollars and use them to stimulate the economy based on loose regulations. The state did not hold up their deal. Thus, prompting the federal government to add additional regulation to their grants and further bloating the federal government.

    Congrats South Dakota on another showing as a welfare queen.
    At least if the federal government put that in the hands of the people, they would have taken it and used it to buy stuff to stimulate the economy as intended.

  13. mike from iowa

    South Dakota’s wingnut party seems to have placed their entire code of regulations on women exercising their right to choose abortion.

    Planned Parenthood must be the only business that wingnuts do not want to make any profit whatsoever.

  14. Ror, I found Dusty’s word game about the feds “bribing us with our own money” particularly bothersome. He implied that since federal money is really our money, we can ignore federal rules and expectations and do what we want with it. That sounds like saying that since my federal income tax is my own money, I can lie on my 1040 to get a bigger EITC or deduction for business expenses.

  15. MD, well put! If the kind of “welfare queen” the SDGOP complains about played word games with the feds, took federal money, then didn’t fulfill the conditions placed on that money, they’d be crying for the feds to claw back that cash.

  16. SD – the 7th biggest Federal welfare queen.
    Meanwhile liberal MN is way back at 43 for Federal welfare. Surprising, anyone, that MN is more responsible and pays their way?

    SD is just a big fat corrupted federal welfare pig

  17. Douglas Wiken

    SD legislators have turned down millions of fed money because they did not like the conditions on them. But, they regularly send tax money actually paid by South Dakotans to local SD government structures with a truckload of conditions attached. This “bribery” BS started when Lady Bird Johnson persuaded Congress to regulate awful billboards alongside highways funded by the feds. SD interests making the country side ugly went berserk and with no hesitation legislators pandered with their ridiculous “bribe” humbug and hypocrisy.

  18. Dusty sounds like the other sociopaths in Pierre. We make rules we don’t need to follow. We make deals and lie about complying and have no fear of reprisals. We believe federal dollars exist to keep the trough filled for our pals, again without fear of reprisals.

    Nobody should be surprised with Dusty’s absence of ethics. This is the guy who resigned from the PUC the night he was re-elected to take the Chief of Staff post and maintained a front row seat protecting the Rounds racketeering network until Daugaard was assured of re-election. Being a member of the privileged class in Pierre is a lifetime career.

    What makes me wonder is how many other Gear Up and EB-5 rackets sprouted up in the state with all of those millions of stimulus bucks breezing through the state. While the rest of us were struggling to keep our mortgages and keep our jobs, the Privileged Class was feasting and grafting from our misery. Thanks for everything Sen. Rounds!