Ah, the smell of money….
Mark Mickelson and Paul Kostboth have been trying to make it easier to set up and expand factory feedlots—concentrated animal feeding operations, or CAFOs—in South Dakota for years. Representative Mickelson has pushed legislation to ease zoning restrictions, and this week he threatened to make state funds harder to get for rural counties that don’t open their doors to CAFOs. Paul Kostboth worked for five years as our Department of Agriculture’s agricultural development director, in which position he mostly used state resources to promote factory feedlots:
Paul Kostboth runs the department’s county site analysis program. The department’s employees scour each county’s zoning regulations, identify sites that meet setback rules and have the utility capacity for large agricultural or industrial operations, and then reach out to the landowners nearby and ask whether they’re interested in working with investors.
Kostboth says the department hears “almost daily” from local or out-of-state investors looking to expand or establish themselves, but the state doesn’t usually have great answers for potential locations.
“South Dakota is really attractive for companies looking to develop,” Kostboth said. “What we’re trying to do is be proactive with local leaders and start those conversations earlier” [John Hult, “Money vs. Stink: S.D. Push for Huge Feedlots,” that Sioux Falls paper, 205.02.14].
Mickelson and Kostboth’s shared interests in CAFOs have brought them into the same room on multiple occasions. Kostboth testified in support of Mickelson’s pro-CAFO House Bill 1201 in February 2015. Later that year, Kostboth and Mickelson appeared in a panel discussion on livestock development hosted by SDSU Extension and broadcast in two parts on SDPB Television, in which (Part 1, around 7:22) Mickelson referred to “conversation in the Legislative hallways with Paul and his friends’s expertise” who worked as “a team and a cadre of folks” to look into ways to reduce the appeals processes available to feedlot opponents:
Kostboth left the Department of Agriculture last spring for the private sector:
Kostboth’s company, A1 Development Solutions, still does the same thing Kostboth was hired to do for the state, helping CAFOs set up in South Dakota:
Development Done Right
A1 Development Solutions is a business development services firm specializing in the siting, permitting, and development of livestock and other agricultural-related facilities of all sizes.
From identifying the best sites for your specific project(s) to working with landowners, neighbors, and local and state officials throughout the entire permitting process, A1 Development Services takes the guesswork out of finding the right sites in the right locations to ensure both your company’s immediate and long-term success [A1 Development Solutions, home page, retrieved 2017.12.13].
So Kostboth left his state job promoting dairy and livestock operations (and he must have been doing a lot of work, because the state had to hire two directors, Jeremy Freking and Bryan Sanderson, to replace him) and created for himself a private job that has him doing the same work but for profit. Why does this sound familiar?
At one time [Joop] Bollen was a state employee working for the Board of Regents doing the same kind of work. But Rounds told KELOLAND News both the Board of Regents and Benda’s office asked Rounds in 2009 if the state could privatize EB-5 to be more competitive with other offices recruiting foreign investors across the country.
“What I also asked was, ‘So who’s going to do this? Because there aren’t a lot of people who understand the EB-5 program at the federal level.’ And the response I received back was Mr. Bollen, who was working for the Board of Regents, has agreed to separate himself out and do this,” Rounds said [Ben Dunsmoor, “Rounds: I Was Told Bollen Was the Man to Run EB-5,” KELOLand.com, 2014.10.02].
“We weren’t worried about whether Mr. Bollen was privatizing or not. We were worried about whether or not the projects that needed this outside investment would have access to an office that knew what they were doing. It was not the time to go out and start somebody brand new and find out later on they didn’t know what they were doing,” Rounds said [Ben Dunsmoor, “Rounds on EB-5: ‘There Is No Conspiracy’,” KELOLand.com, 2014.10.02].
“…it appeared that NSU and the state system didn’t have the stomach to accept the liabilities that were associated with the entrepreneurial activities they asked for and encouraged me to establish and for which I was hired” [Bollen, 2014.11.10, p. 9].
One big difference here is that when Joop Bollen privatized his EB-5 visa investment coordinator’s job, he signed a contract with himself to keep state money flowing into his pockets. There’s no sign that Kostboth’s A1 Development Solutions has any contracts with Kostboth’s former state employer.
But guess who’s partners with Kostboth at A1 Development Services?
Speaker G. Mark Mickelson. The Sioux Falls legislator signed the papers incorporating A1 Development Solutions on May 3, 2017, as agent and co-organizer alongside his Sioux Falls neighbor Kostboth and listed A1’s physical address and phone as the same as his own business consulting firm, Mickelson & Company, LLC.
So for Speaker G. Mark Mickelson, helping CAFOs come to South Dakota isn’t just a legislative priority. It’s his job.
Folks in other states might call that a conflict of interest. But in South Dakota, we call that just another perk of being part of the club.