Ex-Governor Rounds Wins in South Dakota Despite EB-5 Scandals

By David North on June 4, 2014

Despite the scandals about the state government's promotion of the controversial EB-5 (immigrant investor) program, former Governor Michael Rounds easily won the Republican primary for the U.S. Senate in South Dakota yesterday.

The Republican nominee is widely expected to carry the day in November, for the seat now held by retiring Senator Tim Johnson (D). President Obama got less than 40 percent of the vote there in 2012, and the Democratic Senate nominee, Rick Weiland, is not regarded as a strong candidate.

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The EB-5 program is more controversial in South Dakota than anywhere else in the nation. There have been sensational (for this state) bankruptcies of EB-5 projects, charges of mass misuse of both state government and EB-5 funds, losses in the tens of millions for alien investors, and the mysterious death of one of the EB-5 middlemen, Richard Benda. Benda, once one of Rounds' state cabinet officers, was ruled a suicide by the state's attorney general, another Rounds ally.

The AG ruled that Benda shot himself in the stomach with a shotgun, a decision that led to much head-shaking among the state's lively press corps.

There are various investigations of all this, as we reported earlier, but those at the state level are being kept under wraps by the Republicans who control all arms of government. A state legislative inquiry will report its findings only after the fall elections are safely over and the AG has quashed efforts to reveal any details of Benda's grisly death.

The local press has reported that there are one or more federal investigations ongoing, but what, if anything, will come from them is unknown.

Nationwide, most state governments ignore the EB-5 program. South Dakota, under Rounds, made sure that all EB-5 moneys for the state were funneled through a state-designated agency. He also sent some state funds into at least one of the EB-5 projects, a failed beef slaughterhouse.

The program, nationally, grants an alien family a set of green cards if it invests half a million dollars in a USCIS-licensed, but not guaranteed, project.

The overseas family in question does not have to settle in the state where the investment is located, and there has been no hint that any of the many rich Asians involved in S.D.-based EB-5 programs have done so. There are also no suggestions that any of the Asians played a role in any of the EB-5 scandals, except as passive investors — and off-stage losers.