Energy projects received EB-5 recruiters' attention
PIERRE -- Joop Bollen and Richard Benda, two of the men at the heart of recruiting foreign investments for South Dakota during the administration of previous Gov. Mike Rounds, spent much of their time trying to generate financing for large energy projects, planned by major companies, that fit into Rounds' strategy for economic expansion.
Bollen and Benda wanted to use EB-5 loans for the proposed Hyperion oil refinery that was planned in Union County, according to public records. But it wasn't built.
A copy of a 2007 article from Reuters that was published by The New York Times was included as part of the application in 2008 to a federal agency for authority to expand South Dakota's use of EB-5 financing to include petroleum and energy projects.
Much of the application was redacted, but Bollen in his letter referred to "windmill energy generation which currently is expanding rapidly in South Dakota" and said "South Dakota is courting the first oil refinery project to be built in the U.S.A. during the last 30 years."
After receiving approval for the expansion from the U.S. Citizenship and Immigration Services, EB-5 was used successfully for an electricity generation plant in Brookings County and a wind farm in Day County.
The recruiters also attempted to arrange EB-5 investors for a 105-turbine wind farm in Deuel and Brookings counties, but that was rejected by USCIS authorities who oversee the visa program.
Benda was secretary of tourism and state development in the Rounds administration from 2006 through early 2011. He wasn't retained when Gov. Dennis Daugaard took office.
Bollen was president of a private company called SDRC based in Aberdeen.
Benda and Bollen signed a contract in 2009 and amended it in 2010 making SDRC the administrator for state government's efforts in EB-5 projects. EB-5 is a type of visa available to foreign persons who provide at least $500,000 in a loan or as an investment to create jobs in the United States.
Basin Electric was approached in 2009 by SDRC with the EB-5 program concept as a possible method of financing the Deer Creek Station gas-fired generation facility in Brookings County, according to Curt Pearson, a spokesman for Bismarck-based Basin.
"After our staff reviewed the program and potential benefits, Richard Benda and Joop Bollen made a presentation to the Basin Electric board of directors in Bismarck," Pearson said.
"Following that presentation, the Basin Electric board authorized staff to utilize the EB-5 program to finance a portion of the Deer Creek Station. Our loan agreement was signed January 1, 2010," he said.
During this same period the approach was made to Iberdrola Resources for its Buffalo Ridge II wind project.
"In late 2009, officials from the SDRC and the governor's administration reached out to our development team working on Buffalo Ridge II. At roughly the same time, we were already engaged in civil construction work at the site," said Paul Copleman. He is communications manager for Iberdrola Renewables.
"We were invited by state officials and the SDRC to participate, but due to our completion of the project in December, 2010, we were denied by the USCIS," Copleman said.
The SDRC contract required that Bollen get permission from state officials before pursuing a new project for EB-5.
The Sioux Falls Argus Leader reported Sunday that Bollen and Benda attempted in 2011, after Benda had gone to work for SDRC, to get USCIS authority to apply EB-5 financing for the proposed Keystone XL pipeline that TransCanada wants to build from Alberta through Montana, South Dakota and Nebraska.