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Rounds only candidate to support EB-5

By Dirk Lammers

SIOUX FALLS — Former Gov. Mike Rounds stands alone among the four candidates for U.S. Senate in South Dakota in his support of the state’s troubled EB-5 immigrant investor visa program.

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Democratic candidate Rick Weiland, however, takes issue with the program that encourages foreign investment in exchange for qualifications to secure permanent residency. During his recent convention speech, he said allowing foreign investors to jump to the front of the immigration line isn’t fair to others with lesser means waiting to earn residency.

“Should citizenship be for sale to the highest bidder?” Weiland asked. “I don’t think it should.”

Rounds, Weiland and two independent candidates — former Republican U.S. Sen. Larry Pressler and former Republican state Sen. Gordon Howie — are seeking the seat being vacated by retiring Democratic Sen. Tim Johnson.

The South Dakota Governor’s Office of Economic Development for years contracted with privately held SDRC Inc. to administer the state’s EB-5 program, but the company’s contract was cancelled in September, months after state officials learned that a federal grand jury was investigating the program. The investigations have focused on the agency’s former commissioner, Richard Benda, whose body was found Oct. 22 and whose death was ruled a suicide.

Rounds said EB-5 helped him create 28,000 jobs when he was governor, and it was used for several successful projects, including The Dakota Provisions turkey plant in Huron, several dairies and the Deadwood Mountain Grand hotel, casino and event center.

But EB-5 funds also were used to fund the failed Northern Beef Packers plant, which fi led for bankruptcy protection last year because it lacked money to buy cattle for slaughter. The Aberdeen plant, which also used about $3.5 million in state Future Fund Grants and $845,000 in construction tax refunds, has been bought at auction but sits idle.

Rounds said the state’s investment is offset by taxes generated from the plant’s construction and the property takes paid to local jurisdictions.

“It’s going to be an operational facility in the future” Rounds said. “And we will, as a state, reap the benefits of having beef processing in the state where farmers and ranchers have one more place to market their livestock.”

Howie said the he thinks the program’s use in South Dakota is a valid campaign issue because taxpayers lost money on a project pushed by Rounds’ administration.

“I think it’s a bad program because it lends itself to crony capitalism and corruption,” Howie said. “It interferes with the free-market system.”

Pressler said he is squeamish about selling citizenship or green cards for any amount of money. He said he doesn’t know details of the investigations, but the program seems to have operated under an “old boys’ network.”

If elected, Pressler says he would support legislation eliminating the program.

“I just don’t like the flavor of it,” he said.