EB-5 questions factor in to gov, Senate races
Mike Rounds has been steadfast in his defense of the EB-5 economic development/immigration program he championed during his two terms as governor. If his U.S. Senate opponents get their way, he might get more chances to defend the controversial program.
Two of his opponents called for him to testify under oath or in writing about the program, which offers foreign investors a United States visa in exchange for at least $500,000 invested in an American business.
The issue took up much of the time of an hour-long debate held Wednesday at Dakotafest near Mitchell, and also was a major issue in the gubernatorial debate held right before the Senate debate.
Independent/tea party Senate candidate Gordon Howie attacked Rounds the most pointedly, calling his administration "corrupt."
"We need to know if Governor Rounds should be vindicated of any wrongdoing. Now is the time for vindication," Howie said. "I would ask the governor to be willing to go before that (legislative) panel and testify under oath. That would bring the truth. South Dakotans deserve the truth."
Independent Senate candidate Larry Pressler called for Rounds to write out a "memorandum of fact" that would include every detail Rounds could produce about his administration's work with EB-5 and his hiring of the late Richard Benda as head of the Governor's Office of Economic Development.
Under Rounds, the EB-5 program moved from a state-run enterprise under a salaried state employee named Joop Bollen to a private entity owned by Bollen who generated millions of dollars in fees for putting deals together.
Democratic gubernatorial candidate Susan Wismer sits on the legislative committee that Howie mentioned, and when she made a motion at a recent meeting to subpoena Bollen to testify, she did not get a second and the matter died.
Democratic Senate candidate Rick Weiland said from the debate dias that Bollen should be made to answer questions.
"They just crossed over the line there," Weiland said of Republican lawmakers refusing to second Wismer's motion. "This just does not feel right to me. The people of South Dakota are entitled to a real explanation of what happened here.
"The EB-5 program allows the state to go out and solicit big-money foreigners to come in for half a million dollars and get green cards. This is a tragedy and big money gone wild."
Wismer, too, said she is dismayed that her motion died and she believes South Dakota should not be using the EB-5 program.
"South Dakota should not be involved in a program that allows foreigners to buy their way to the front of the green card line," she said.
Independent gubernatorial candidate Mike Myers said he wants subpoenas issued to Rounds and sitting Gov. Dennis Daugaard, a Republican.
Daugaard did not defend the EB-5 program and said, "It's a federal program I have not emphasized since becoming governor."
Rounds said he believes the program brought money to South Dakota ventures, most of which were successful.
"I believe the EB-5 program was good for South Dakota," Rounds said. "We worked hard to bring more economic development resources to bear on South Dakota projects."
Rounds responded to criticism that various state grants and loans to Aberdeen's Northern Beef Packers -- an EB-5 participant -- totaled more than $4 million and were lost. He said the state gained more than that in contractor's excise taxes and sales taxes.
In addition to EB-5, Obamacare proved a hot topic at Wednesday's debates.
Democrat Wismer called for the state to expand Medicaid under Obamacare, formally called the Patient Protection and Affordable Care Act. Daugaard said he worries that expanding Medicaid to able-bodied adults who should be able to provide for themselves could weaken the state's solid financial standing.
"This state is passing on $272 million a year of investment in our health care institutions because we are refusing to take that federal money to expand coverage to 48,000 people who could have preventive health care with the stroke of a pen," Wismer said. "We are writing off $88 million of bad debt in our two major hospital systems. That's not just going away. That's being financed by counties and you and I with health insurance premiums."
Daugaard said he does not want Medicaid to be facing insolvency as Medicare and Social Security are.
"In South Dakota we share the value of self-reliance. We should help people who can't help themselves, but those who can help themselves should do so," Daugaard said. "The first couple of years it would only the state a couple million dollars. After that $10 million, then $20 million, then $36 million. What kind of trade-offs are we making when we obligate ourselves to those kinds of expenses?"
Myers said he would examine the non-profit status of hospitals that pay top administrators and doctors in the high six- and seven-figures each year.
Howie and Rounds both called for the repeal of Obamacare, with Howie accusing Rounds of supporting it while he was governor.
Weiland said he would support adding Medicare as an option for people buying insurance at the Obamacare marketplaces, saying it would inject competition for the for-profit insurance companies and drive down costs.
Weiland and Wismer -- the two Democrats -- both decried South Dakota's last-place ranking for teacher pay, blaming Rounds and Daugaard for the situation.
"Mike Rounds when he was governor, I'm sorry to say, cut education," Weiland said. "That's one of the reasons we're in this mess. We've not been investing in education."
Rounds did not directly respond to the charge.
Wismer said the free market has left schools with vacant teaching jobs because teachers can earn $10,000 more just by crossing the state line.
"We've got $1 billion in the bank and bragging rights to our last-place ranking, and we are chasing our future right out of this state," Wismer said. "The tone in Pierre desperately needs to change. You can't give lip service to this during a campaign and then cut funding."
Daugaard said that local school boards decide what to pay teachers, while the state's overall per-student funding ranks 39th nationally.
"It's decisions that are made at the local school district, made by people you elect and are right for your community, I have to assume," Daugaard said. "In South Dakota, we're proud the state spends almost half of its general fund budget on education -- more money than any other program."
When Daugaard pushed through across-the-board budget cuts to balance the budget during his first year in office, education took a lesser blow than other parts of state government, he said.
"Since then I have proposed fully funding the formula every year, plus more," Daugaard said.