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Rounds Proposes Reform of EB-5 to Protect Advantages for Wealthy Urbanites

As Governor, Mike Rounds let the EB-5 visa investment program become a den of South Dakota corruption. As Senator, Rounds wants to play the guy who fixes that corruption. Seth Tupper reports that our junior Senator has spent three years composing a bill to fix exactly the abuses of the program that his EB-5 cronies committed:

Many provisions in the bill aim to prevent and catch malfeasance, including some highly specific provisions that read like a point-by-point reaction to some of the improprieties committed by South Dakota’s EB-5 program.

For example, the bill would:

  • Prohibit people from serving as loan monitors for projects they were previously associated with as regional center employees.
  • Require regional centers to provide 120 days advance notice of significant changes in their organizational structure, ownership or administration.
  • Require evidence from regional centers that money invested by foreigners is committed to intended projects.
  • Authorize the secretary of homeland security to suspend and terminate regional centers and third-party promoters for a number of program violations, and to fine regional centers up to 10 percent of the money invested through them.
  • Require the Department of Homeland Security to perform site visits to regional centers and their projects.
  • Require reports on various aspects of the EB-5 program from the Government Accountability Office and other federal offices.
  • Allow the secretary of homeland security to deny program applications that are contrary to the national interest, for reasons pertaining to national security or public safety [Seth Tupper, “Rounds Doubles Down on EB-5: New Bill Would Reform and Prolong Program,” Rapid City Journal, 2019.11.08].

You’d think, with an election coming up, Mike Rounds wouldn’t want to give us any excuse to talk about EB-5 again. Maybe Mr. Ehrisman is right: maybe Rounds isn’t going to run again and thus has nothing to lose by dredging up his greatest failure (not just EB-5 specifically but his facilitation of deadly crony corruption). But the 2014 election showed that Rounds’s “R” branding is more powerful than EB-5 and every other letter and number combined, so he can plow happily forward into the primary and the general beating back his opponents’ plaintive cries of “EB-5!” with his own shouts of, “Yeah, EB-5! And I’m fixing it!”

Or maybe, most likely, there are just some rich guys who don’t like the increased cost of EB-5 visas and other rich immigrants who are sick of waiting. Rounds obliges both interests, as his bill lowers the cost of a normal EB-5 visa from the impending $1.8 million back down to $1.1 million and creates a loophole that allows 73,000 foreigners currently trapped in an EB-5 backlog to come on in. We’re capping refugees, people in dire need of safe harbor on our shores, at 30,000 a year, but Senator Rounds will let people willing to pay seven figures for green cards cut to the front of the line in more than double those numbers.

EB-5 critic and anti-immigration writer David North also notes that Rounds’s bill would undo the currently pending regulations that would prevent the gerrymandering past EB-5 operators have used to funnel dollars intended for depressed and rural areas into more lucrative urban projects. As I reported last month, big EB-5 firms have a harder time pitching projects in the boonies to foreign investors (the same as you’ll have a harder time selling a house in Reliance than in Sioux Falls). Allowing the EB-5 promoters to keep rigging their maps, not to mention reducing premium for prime investment zones from 100% to 10%, makes it more likely that foreign investors will sink their money into already profitable urban areas and not have to gamble on two-bit schemers in South Dakota proposing small casinos and beef plants and turkey farms and the occasional imaginary oil refinery.

Given those points, Mike Rounds’s EB-5 reform bill might not do anything for South Dakota’s general welfare… but then he wasn’t thinking about the welfare of anyone but himself and his rich pals when he plunged South Dakota into the EB-5 mess in the first place. And when voters made clear in 2014 they didn’t really care what Rounds did with EB-5, why would he behave any differently now?

15 Comments

  1. jerry 2019-11-10

    Two Cents in the Rapid City Journal, nails it

    “Rounds talking about EB5 is like returning to the scene of the crime.”

    Should be a bumper sticker and a banner for those who oppose him (if anyone) in the coming election. Did you get a load of the crooks supporting this in the senate? The blatant disregard for corruption only shows that crime does pay.

  2. leslie 2019-11-10

    While you have hidden from your role facilitating Joop’s EB5 ”Laundramat” of $600M, this is what a real leader does:

    “This is what pipelines do” said Chase Iron Eyes, lead counsel for the Lakota People’s Law Project. “They spill.”

    The Standing Rock Sioux Tribe protested the installment of the Dakota Access Pipeline for nearly a year before newly minted President Donald Trump reversed his predecessor’s order and allowed the pipeline’s construction to continue. The tribe is still battling the line in court and disputing Texas-based Energy Transfer’s pipeline. The Lakota people are literally standing up to the fossil fuel industry to protect SD land, water, the environment, and our souls.

  3. mike from iowa 2019-11-10

    First SIL and other wealthy FOD have been allowed to take advantage of enterprise zones for their pet projects, an offshoot of EB-5 and I damn sure doubt there is enough oversight to matter about how the money is spent.

    In another boondoggle, the new head of EPA was a lobbyist for rich California landowners and is proposing to give the first water guarantee to one of his former wealthy California farm groups. I’m still looking for the link.

  4. jerry 2019-11-10

    EB5 Rounds whines about the House Impeachment Inquiry but fails to mention the facts regarding Ukraine and the corruption. Chubby, EB5 and the rest of the fraudulent accomplices to corruption, want us to believe that there was cash involved in the 391 million extortion. EB5 Rounds and Chubby lie.

    “No meaningful “dollars” or “funds” were actually going to Ukraine. The public reporting on this is sparse to nonexistent, but it seems pretty clear that this issue concerns purely “military aid“ – i.e., military weapons, equipment, radios, night-vision goggles, etc., and lots of training for such advanced equipment hardware. In other words, the value of the military aid package was estimated to be $391 million, but the Ukraine was not actually receiving $391 million in money.” Booyah!

    So there ya go. The military aid was for military armaments that we manufacture here in the United States by American workers. Some deal makers these crooked republicans are, workers be damned when there is dark money to be made from Putin.

  5. Debbo 2019-11-10

    I seem to recall hearing that Homeland Security is one of the departments Dumpster Fire Donnie gutted. They don’t have the personnel to do the oversight Roundy has described. I’m sure he knows that and it’s part of the plan. When the Democrats win everything next year Roundy’s vault will be slammed shut. Hopefully he’ll be investigated, along with Thin and the rest of the GOP criminals. They’ll keep prosecutors busy for years and years.

    Imagine having a lawful government again. Last time was Carter years. (Not counting Obama because he should have prosecuted crooked bankers and GWB’s crooks.)

  6. Mark 2019-11-11

    OMG
    The corruption stink will never leave
    this state as long as Noem, Rounds, Thune continue to worship at the altar
    in the church of Janklow.
    Joop Bolen got a $2000 fine and 2 years
    probation for his crimes. Rounds should
    be in jail.
    And the proprietor of Kristyland wants
    to put the Truck driver of a legal hemp
    load passing through our state in prison
    for possession with the intent to distribute for 20 years.

  7. Aaron 2019-11-11

    Unfortunately Rounds will be able to phone in his 2020 campaign and win without breaking a sweat. His only real competition for the job will be in 2026 when Kristi is term-limited out as governor and decides that she wants the job.

  8. Cory Allen Heidelberger Post author | 2019-11-11

    That’s an interesting 2026 scenario you foresee, Aaron. However, I doubt we’ll have the pleasure of any such battle. If Rounds still has the fire in his belly, the establishment will rally around him, his seniority, and his deeper cronyism. Jackley’s people will bring their long memories back and join that rally to send Noem home for good.

  9. Cory Allen Heidelberger Post author | 2019-11-11

    Homeland Security gutted, Debbo? I don’t think any federal department is running on all cylinders right now. I get the impression the federal government is in a state of abject neglect.

    Trump likely has no idea Rounds is working up this EB-5 extension and reform. He won’t know anything about it unless Fox News mentions it, and even then, he won’t understand it or say anything instructive about it.

  10. Debbo 2019-11-12

    Good link Mike. The GOP swamp is overflowing with sewage solids.

  11. leslie 2019-11-18

    Rounds is just tidying up his past fraud complicity for the future.

  12. leslie 2019-11-18

    Good Article, Tupper!

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