Tucked in Jeff Sveen’s initial response the state’s lawsuit against SDRC Inc. is this one little sentence:
As you are aware, the Consulting Agreement between SDRC, Inc. and GOED… was terminated with no cause in September 2013 [Jeff Sveen, letter to Paul Bachand, 2015.10.22, in South Dakota response to USCIS, Exhibit G, p. 59].
Around that grit of sand Sveen and fellow Siegel Barnet Schutz lawyers Reed Rasmussen and Julie Dvorak craft this pearl of an Answer and Counterclaim to 32CIV15-000270, the state’s lawsuit against the corporate iteration of former EB-5 czar Joop Bollen.
Sveen and company now formally contend to the court that the state wrongfully terminated Bollen’s self-dealing contract. The September 19, 2013, letter from GOED Secretary J. Pat Costello to Joop Bollen says the state is canceling SDRC’s EB-5 contract “for cause,” but it does not state that cause. Paragraph 17 of the original contract says, “…This Agreement may be terminated at any time by either party for cause, including but not limited to any breach of this Agreement or the lack of good faith compliance by either party with the terms of this Agreement.” The contract does not lay out the state’s obligation to explain cause for termination to SDRC Inc.
SDRC Inc. contends that it “repeatedly requested the state to provide an explanation or documentation of the ’cause’ [mock quotes in original!] for which the contract was terminated,” but “The State never provided such explanation or documentation” [Counterclaim, paragraph 2].
Check it out: Joop Bollen is now suing the state for not sharing documents.
It gets funnier. In charging that the state failed to act in good faith, SDRC Inc. alleges that the state demanded that SDRC Inc. “maintain funds/accounts of monies belonging to the State, in essence forcing a private company to hold State money in what appears to be, in SDRC Inc.’s opinion, an attempt to circumvent legislative control of these monies” [Counterclaim, paragraph 18(a)].
SDRC Inc. appears to be referring here to the Indemnification Funds that SDRC Inc. held for the state. Team Bollen–Sveen may have a point: the 2014 audit of the Governor’s Office of Economic Development concluded that GOED had indeed kept those funds off the books for three years, until FY2013.
Now Joop Bollen and Jeff Sveen are accusing the Governor’s Office of Economic Development of hiding money from the Legislature. I must be rubbing off on my Aberdeen neighbors.
SDRC Inc. alleges that the state deliberately set out to harm Joop Bollen’s business. Sveen and company contend that SDRC Inc. stood to make more $1.5 million on the Dakota Natural Meats project, which the state approved for EB-5 investment in July 2013 and for which SDRC Inc. was recruiting Chinese investors in August 2013, just one month before Governor Dennis Daugaard canceled the SDRC Inc. contract. For good measure, Team Bollen throws some Mike Rounds magic math into the counterclaim and says the state’s interference with the Dakota Natural Meats project cost the state 1,273 jobs [Counterclaim, paragraphs 3–5].
The counterclaim further contends that the state, “through the Division of Banking, the Governor’s office and other state agencies and employees, intentionally engaged in tortious conduct” intended to “cause SDRC Inc. reputational and financial harm” [Counterclaim, paragraphs 13–14]. This count includes no details, but the mention of the Division of Banking suggests Bollen was none too happy having to apply for a lending license and possibly pay bank franchise tax on all those loans he made with EB-5 money.
SDRC Inc. claims the state has done it further harm by defamation and improper administration of the EB-5 Regional Center. SDRC Inc. asks the court to throw out the state’s lawsuit against it, pay Sveen and company for their labors on behalf of Bollen, and extract “damages resulting from wrongful termination of its contract with the State of South Dakota, lost profits, punitive damages, and other damages suffered due to the State’s wrongful actions.”
In other words, Joop Bollen doesn’t just want to escape the state’s suit; he wants one more big dip of our tax dollars.