Dan Baker represented citizens

The decision by Gov. Dennis Daugaard to appoint Jeff Burket of Spearfish to the state Railroad Board wasn’t a surprise. Burket, manager of AMCOL International’s bentonite operation at Belle Fourche, already was serving on the state advisory panel for South Dakota’s new rail plan. Burket succeeds Dan Baker of Rapid City, who wraps up two terms and eight years on the board. Baker was the citizens representative on the board. He sometimes was a bit of a thorn in the side of the board, because he asked important questions and wanted processes correctly followed. At times he was the only nay vote. Other board members with long experience in the rail-shipping industry understood the business and generally arrived at sound decisions. Baker wanted a solid return on the state-owned rail lines and he tried to hold rail users to the standard appropriate for a public resource. Sometimes those perspectives didn’t always mesh cleanly or quickly. The rail board is heading forward into the next chapter of what’s become an expansion era under Daugaard, with money flowing from state, federal, local and producer sources. Baker was a cautious force whose voice was one of prudence. He was appointed to the board on April 6, 2006, by then-Gov. Mike Rounds and was reappointed by Rounds in 2010. The Railroad Board canceled its October meeting and Baker’s term expires Oct. 30. The terms are now three years on the board.

Poll: Most South Dakotans think nation on wrong track

The source of funding for the Harper Polling survey conducted Oct. 9-11 in South Dakota isn’t identified in the company’s report of its results. The company describes itself as a Republican firm. What it found was Republican candidate Mike Rounds ahead of Democratic candidate Rick Weiland by 37 percent to 33 percent — essentially the margin of possible error — in the U.S. Senate contest with independent / former Republican Larry Pressler in third at 23 percent and independent / former Republican Gordon Howie fourth at 5 percent. That is a flip of the second- and third-place spots from the Survey South Dakota results released a week ago, but what’s consistent is Rounds was below 40 percent again.

There were two big surprises in the Harper results. One was the pessimistic mood of South Dakota voters. Asked about the nation’s status, 30 percent in the Rapid City media market said right direction while 65 percent said wrong track; the same was generally true in the Sioux Falls media market, where 27 percent said right direction and 67 percent said wrong track.

The other set of findings that stood out were favorable/unfavorable ratings for the four U.S. Senate candidates. Rounds should be careful of where he parks. In the Rapid City market, 58 percent had a somewhat or very unfavorable opinion of him; in the Sioux Falls market, 49 percent has a somewhat or very unfavorable opinion of him. His somewhat or very favorables were only 39 percent in the Rapid City market and 48 percent in Sioux Falls market. He is in danger of tipping over, at least in this poll.

Weiland was 43 percent somewhat or very unfavorable in both markets. He was 45 percent somewhat or very favorable in the Rapid City market and 48 percent somewhat or very favorable in the Sioux Falls market. Weiland still had his head above water in this measure.

Pressler is the most well-liked of the main three in the contest. He was viewed somewhat or very unfavorably by 30 percent in the Rapid City market and 41 percent in the Sioux Falls market. His somewhat or very favorable ratings were the best, with 64 percent in the Rapid City market and 52 percent in the Sioux Falls market.

Howie’s unfavorables totaled 60 percent Rapid City and 58 percent Sioux Falls. His favorables totaled 24 percent Rapid City and 20 Sioux Falls.

I put the unfavorables first for each of the candidates because this contest seems increasingly about the man or men that a voter doesn’t want elected. The blasting now under way by supporters of Rounds and Weiland against Pressler is an attempt to drive up his unfavorables.

If Rounds can hang on at 37 percent support through election day, Rounds likely will be the winner. Rounds hasn’t trailed in any of these polls yet. But he definitely is sinking. And the dirtiest fighting has just started.

Republican candidates faring best among youngest

Give South Dakota Republicans credit. They seem to be doing much better among the state’s youngest voters than Democrats are. That’s shown month after month in the voter registration numbers, with independents and Republicans increasing at a much, much faster rate than Democrats. Where it’s showing up as well this fall is the public opinion surveys on the major statewide election races.

Consider these results from the Survey South Dakota results released in the past week by the Aberdeen American News, KOTA TV in Rapid City and KSFY TV in Sioux Falls:

For governor, Republican incumbent Dennis Daugaard led Democratic challenger Susan Wismer 59 percent to 30 percent, with independent Michael Myers at 7 percent and just 5 percent remaining undecided. Inside those numbers are patterns by age group. Daugaard had support from 68 percent — that’s not a misprint — of the 18 to 34 year olds in the polling sample while Wismer had 18 percent. In the 35-49 group, the results were Daugaard 56 percent Wismer 29 percent. Among those 50 to 64 years old, Daugaard led Wismer 55 percent to 34. And the 65-plus group broke 59 percent for Daugaard and 34 percent for Wismer. Daugaard is 61 years old. Wismer is 58.

For U.S. Senate the Republican candidate, former Gov. Mike Rounds, led in three of the four age groups. This is a four-candidate contest. Independent Larry Pressler, who held the U.S. Senate seat from 1979 through 1996 when he lost to Democrat Tim Johnson, was second in two of the age groups in the poll and led among the 50-to-64 year olds. Democratic candidate Rick Weiland didn’t lead in any groups. However, they were closely bunched, so perhaps too much shouldn’t be made of each candidate’s share. But again, the overall pattern wasn’t promising for Democrats.

Among 18-to-34s, the results were Rounds 39 percent, Pressler 28 percent, Weiland 25 percent, independent Gordon Howie (a former Republican legislator) 6 percent and undecided 1 percent. (Who says younger voters can’t make up their minds?)

Among 35-to-49s, Rounds had 37 percent, Weiland 29 percent, Pressler 27 percent, Howie 5 percent and undecided 2 percent.

Among 50-to-64s, Pressler led with 37 percent, followed by Weiland at 30 percent and Rounds at 29 percent, with Howie at 2 percent and undecided 2 percent.

Among the 65-plus group, Rounds had 37 percent, Pressler 32 percent, Weiland 27 percent, Howie 1 percent and undecided 2 percent.

The U.S. House contest again has the Republican incumbent, Kristi Noem, strongest among the youngest voters and Democratic challenger Corinna Robinson weakest there. Overall Noem led 55 percent to 37 percent for Robinson.

Among the 18-to-34s, Noem led 59-28. Among 35-to-49s, Noem led 56-35. Among 50-to-64s, Noem led 51-44. And among 65-plus voters, Noem led 57-38.

What could the Rounds campaign have done?

For months I have asked Republican legislators the same question in conversation after conversation: Why doesn’t Mike Rounds simply take responsibility for the EB-5 program that took off like a brush fire during his administration? I never got a meaningful response. Since Richard Benda’s body was found Oct. 22, the focus has been on Benda, who was former Gov. Rounds’ secretary of tourism and economic development from 2006 through early 2011, and then Joop Bollen, who was the point man on EB-5 for South Dakota, and then of late, the South Dakota Board of Regents, for whom Bollen worked more than a decade as director for the South Dakota International Business Institute at Northern State University in Aberdeen until 2009. Rounds meanwhile didn’t answer this reporter’s written questions regarding EB-5 for more than four months. The theme in his answers that stuck out was that he was aware the program was being privatized but he wasn’t aware of the transactional details.

One of the things I looked for Wednesday during the regents meeting at NSU was tire tracks on the backs of any regents, NSU President Jim Smith or regents executive director Jack Warner. They clearly were thrown under the bus regarding Bollen. Smith took the helm at NSU in 2009. He succeed Laurie Stenberg Nichols, the interim president from Aug. 1, 2008, through June 22, 2009. She was on loan to NSU from South Dakota State University. While NSU was going through a series of leadership changes starting in 2008, Bollen had formed his own company for EB-5 purposes called SDRC Inc. By this time Bollen was working primarily for the Governor’s Office of Economic Development arm in arm with Benda in pursuing foreign investors for South Dakota projects. Shortly after Smith became president, he looked at Bollen’s activities and told Benda that Bollen didn’t belong on campus because university officials didn’t know enough about EB-5 to adequately supervise Bollen. Benda arranged for Bollen to move off-campus and to move officially into the private sector. In late 2009, Benda signed a state contract with Bollen giving SDRC Inc. the administrative and management responsibilities over EB-5 for state government. The contract provided a sliver of revenue to state government, via a special set of funds in a bank, from the fees collected by SDRC Inc. from the investors being recruited, primarily from South Korea and China. Bollen in 2008 had already signed a state contract in his role as SDIBI director with his company SDRC Inc. but didn’t disclose at the time that SDRC was his company. That 2008 contract has some legislators in both political parties unhappy for two reasons: The action itself and that they weren’t made aware of it until recent months.

Testimony from a recent arbitration hearing in California shows that Bollen decided in 2007 to create SDRC Inc. as a new mechanism for recruiting investors. He had been using James Park from the Hanul law firm of Los Angeles and Seoul, South Korea. Park’s testimony in the lawsuit shows that Bollen listed Park as the director for SDRC Inc. during the 2008 start-up. Bollen wanted to move into recruitment of investors from China and needed to hire agents in China. SDRC Inc. became the means to do that. In late 2007, according to Park’s testimony, Bollen already was preparing a recruitment drive for Dakota Provisions, the turkey processing operation at Huron. One of the turkey company’s top officials was Jeff Sveen, the Aberdeen attorney with whom Bollen worked closely on EB-5 matters for years to come. Sveen is the lawyer for many Hutterite colonies that supply turkeys for the processing plant. Sveen represented Bollen in the 2009 state-contract negotiations.

As photographs show, all of these men including Rounds spent time together. The connection was business recruitment via EB-5. A 2007 document on state letterhead was signed by Benda and Bollen to be distributed to potential investors in China. According to Park’s testimony, Park met Bollen during a failed attempt by Bollen to recruit in South Korea. Park said he helped get a NSU faculty member (who isn’t named) and a friend of the faculty member out of prison for a violation during their recruiting trip to South Korea. That led to Park and the Hanul firm becoming the prime recruiter worldwide for Bollen, except in China. The lawsuit developed after a California businessman named Robert Stratmore offered his company to be the recruiter in China. For a few months in 2007 it seemed Stratmore’s company had a contract with Hanul to recruit for South Dakota. But that seemed to evaporate when a deal involving a tilapia farm went sour and Park found that Stratmore’s company didn’t have the level of expertise Park thought was necessary in China. Bollen’s decision to form SDRC Inc. and list Park as director in January 2008 sealed the end of the Stratmore deal.

The Stratmore deal was the topic of the arbitration hearing in California. Park no longer works for Hanul. The retired judge’s decision became public a few days ago. He found that no one in the matter — the regents on behalf of Bollen, Hanul or Stratmore’s company — had liability to a degree that money should change hands for damages. The regents and Rounds proclaimed victory. Rounds is now running a TV ad for  his U.S. Senate campaign declaring the arbitrator’s decision proves all of the information from opponents regarding EB-5 was essentially a lie. That’s not the case at all, however. The retired judge wrote a highly readable decision that makes clear Bollen was responsible to both the regents and the Governor’s Office of Economic Development at the time of the Hanul-Stratmore dispute. Other lawsuits regarding Northern Beef and the loan pools that Bollen arranged for it through SDRC Inc. have brought other facts to light. What we still don’t definitively know is how involved or uninvolved in EB-5 Mike Rounds was during his time as governor. What we do know is that it was kept secret from the Legislature and the general public until after Benda’s death last October. (The arbitrator’s decision is available here.)

University centers have value

It’s hard to think of the Internet, videoconferencing and a building as types of transportation. But in South Dakota’s system of public universities, they are indeed delivery mechanisms. The three university centers that were built in the past decade at Sioux Falls, Pierre and Rapid City provide classes in partnership with the six traditional state campuses. On one hand, they’re now struggling for enrollment. On the other hand, they are still serving more than 3,300 students. The state Board of Regents received the annual report Wednesday during the board’s meeting in Aberdeen at Northern State University. An experiment at Sioux Falls to increase enrollment by offering tuition discounts on foundation courses didn’t work out, and it won’t be continued in the spring 2015 semester. The campus ran a deep deficit for two years, largely because of the discount policy. Meanwhile distance education is booming in the state university system. Many students even take Internet courses while living on campuses in the dormitories. A friend at NSU told me Wednesday about a student who took her entire course load via Internet and lives in an NSU dorm. The regents received the distance education report Wednesday and it shows record levels of activity. The unduplicated head count for distance courses throughout the state system was 22,533 in the past year. Some of those students also might be taking classes at the university centers. Several regents would like to know how many students are in each of the categories: distance only, campus only, center only, distance and campus, distance and center, and campus and center. The universities’ enrollment data systems don’t seem to be capable to easily sift that information, however. The total fall enrollment head count was 36,532. That includes distance, campus and center students. Finding ways to fully understand the enrollment trends might be a worthy investment.

5,885 have already voted…

County auditors and campaign insiders have a better idea than some reporter in Pierre about the voters who have requested and submitted absentee ballots for South Dakota’s Nov. 4 general elections. Four weeks remained as of Tuesday before election day, and the statewide totals showed 10,089 absentee ballots had been requested so far and 5,885 ballots had been submitted back to county auditors.

Absentee voting could be the decisive factor in the 2014 contest for U.S. Senate. The latest Survey South Dakota polling results released Tuesday evening showed former Gov. Mike Rounds, the Republican nominee, still in the lead, at 35 percent. Former U.S. Sen. Larry Pressler, who lost the seat in 1996 to Democratic challenger Tim Johnson, was in second place in the poll at 32 percent. Pressler is running as an independent this time, while Johnson is retiring. Democratic nominee Rick Weiland sat third at 28 percent, and former Republican legislator Gordon Howie, running as an independent, was at 3 percent.

Pressler has been spending his personal money on his campaign. He doesn’t have the resources of Rounds or Weiland. Pressler has made an amazing climb in public opinion in the past 10 months. But he doesn’t appear to have a grassroots organization that can identify supporters, get absentee ballots into their hands, or get supporters to the voting booths on election day.

If Pressler is found to pass Rounds and have a lead of more than 5 percent over Rounds in the polling later this month, then Rounds likely is in serious trouble. We don’t know what will happen in the remaining four weeks, especially with an outside political action committee vowing to pump $1 million into advertising intended to help Weiland against Rounds.

Looking back to 2012, absentee voting ranged broadly from county to county. But it’s worth noting that some of the highest absentee-ballot participation came in Republican strongholds two years ago. Counties over 20 percent absentee included Codington 25.4 percent; Custer 28.9; Fall River 20.2; Haakon 23.1; Hanson 32.2; Lake 26.7; Lawrence 22.9; Pennington 21.9; and Yankton 25.8. An absentee vote is a vote in the bank for a candidate. The 5,885 who have turned in their ballots so far this month won’t be affected by any revelations or advertising in the four weeks left.

California arbitrator’s decision explains early EB-5 wrangling by South Dakota w/updates

A California arbitrator’s decision was released Tuesday involving the South Dakota Board of Regents in a legal battle over a 2007 business arrangement regarding the EB-5 program. The arbitrator’s decision deserves to be read because it explains very well what was transpiring in the EB-5 program then run by Joop Bollen at the South Dakota International Business Institute at Northern State University in Aberdeen. The decision explains the period when Bollen started his own private business, SDRC Inc., and arranged a contract between SDIBI, where he was director, and SDRC Inc. The regents have posted the arbitrator’s decision here. The arbitrator denied all of the claims and counter-claims by all parties in the case and suggests that all sides let the matter rest rather than battle next over attorney fees.

UPDATE: One reporter calls the decision an embarrassment for Democrats, and a Republican spokesman proclaims victory for Republicans. SDIBI and the regents appear to have avoided paying damages, and that’s certainly a victory, but the details of what was secretly happening in South Dakota’s EB-5 program at a key turning point are laid bare in language that is easy to understand. This will be fresh information for many people. Coming four weeks before election day, this information doesn’t seem likely to inspire confidence or increase support for how EB-5 was conducted from 2006 until the Daugaard administration in September 2013 terminated the state contract with Bollen and SDRC. Since the termination, the EB-5 program has been taken in-house at the Governor’s Office of Economic Development; GOED Commissioner Pat Costello has said publicly several times that GOED isn’t recruiting EB-5 projects or investors.

SECOND UPDATE: The arbitrator notes that Bollen didn’t disclose to the federal regulatory agency in November 2007 that SDRC Inc. was to be  his own corporation. Bollen as SDIBI director contracted with SDRC Inc. in January 2008. Bollen instead said the Hanul Professional Law Corporation would control SDRC Inc. The arbitrator also notes that Bollen didn’t wait for federal approval and instead went ahead in January 2008 in registering SDRC Inc. as a South Dakota corporation headed by James Park of Hanul. The arbitrator also notes that Bollen in January 2008 began establishing the loan pool partnerships that would be used by SDRC Inc. for attracting foreign investors whose money would be borrowed to business projects. The first such project identified in the arbitrator’s decision was Dakota Provisions; it is a turkey-processing operation at Huron.

Benda and Bollen pursued China investors in 2007

We become more confused each day about the facts in the EB-5 matter during the administration of then-Gov. Mike Rounds’ administration. Of late Rounds has portrayed Joop Bollen as an employee of the state Board of Regents at Northern State University. The above letter was given to EB-5 recruiters for South Dakota in August 2007 (Correction: October 2007) to be used in pursuing investors in China, Hong Kong and Taiwan. The letter is on state government letterhead, specifically the Governor’s Office of Economic Development, and bears the signatures of Richard Benda, who was secretary of tourism and state development in the Rounds administration from 2006 through the end of Rounds’ second term in early 2011, and of Bollen, who at the time worked at the South Dakota International Business Institute at NSU in Aberdeen.

Just months after this letter was written and signed, Bollen in January 2008 formed his own company, SDRC Inc., to manage EB-5 investments in South Dakota. In late 2009, Bollen and Benda signed a state contract making SDRC Inc. the manager for state government’s EB-5 activities. The contract was terminated in September 2013 by the Daugaard administration. GOED had been paying much of the cost for SDIBI while Bollen was running SDIBI and the payment contract outlined specific duties Bollen was to perform for GOED.

The above letter seems to make clear that Bollen/SDIBI and Benda/GOED were working openly together on EB-5. The letter doesn’t refer to the Board of Regents. It talks about the State of South Dakota and refers to “loans/guarantees from the State” instead.

The regents are in a lawsuit brought by Darley International in California because Bollen/SDIBI didn’t carry through in 2008 on arrangements to use Darley to recruit EB-5 investors in China.

This letter seems to indicate GOED and the Rounds administration were at least 50 percent involved — especially with the letter carrying Benda’s signature, and GOED’s letterhead bearing the marketing for Rounds’ 2010 initiative, and Benda identifying himself as “Cabinet Secretary to the Governor.”

Napoli smacks Kooiker hard

We hadn’t heard much in the way of public commentary from Bill Napoli since he chose to retire from the Legislature rather than seek re-election in 2008. Napoli, R-Rapid City, spent eight years in the House and six years in the Senate. He had seen some highs, such as repeal of the state inheritance tax by voters in 2000 and his term as Republican assistant leader in 2001-2002, and some difficulty, such as when former Rep. Ted Klaudt, R-Walker, was convicted of four counts of second-degree rape in 2007. Behind the scenes in Pennington County politics Napoli remained active in recent years. On Saturday, he took center stage again with an opinion piece in the Rapid City Journal blistering Rapid City Mayor Sam Kooiker.

You can read it here. From what I can gather, Sam Kooiker was something of a Bill Napoli prodigy. Kooiker won election to the Rapid City municipal council in 2002 and kept winning. Then he ran for mayor in 2011 and won, defeating two-term incumbent mayor Alan Hanks by some 400 votes. An interesting article showed Kooiker’s innovative use of Facebook to reach voters in that contest. Kooiker won re-election as mayor in 2013. What Napoli suggests in his opinion piece Saturday is that Kooiker lost his way and now supports higher spending and higher taxes, both of which Napoli criticizes. It’s worth reading. This is a situation to watch in the months ahead.