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Legislative panel gains no ground on GOED/EB-5 probe

PIERRE — The June 3 primary elections, for Democratic and Republican nominations for governor and for the Republican nomination for U.S. Senate, will be in the books before South Dakotans know anything more from the Legislature’s panel that was requested to conduct hearings on the Governor’s Office of Economic Development.

The Government Operations and Audit Committee met Wednesday. But the only discussion regarding the state agency, and its activities involving Future Fund grants and the EB-5 foreign-investor program, dealt with what to talk about at future meetings.

Sen. Larry Lucas, D-Mission, identified a state law dealing with state government employees’ conflicts of interest that he said could be extended by the Legislature to run for a year after an employee departs.

Lucas said that would treat state employees similar to legislators whose activities are somewhat restricted for one year after they leave office.

The GOAC chairman, Sen. Larry Tidemann, said he had identified that topic for a future meeting.

Tidemann, R-Brookings, said the committee needs to revisit the findings of the special audit and two special reviews of GOED that were conducted in late 2013 and early 2014.

They were performed at the request of Pat Costello, the state commissioner of economic development, with the approval of Gov. Dennis Daugaard.

The reviews and audit extended from 2009 through mid-2013. They came on the heels of a federal grand jury subpoena that was served on the governor in March 2013. The subpoena prompted an investigation by state Attorney General Marty Jackley into the activities of Richard Benda, who was secretary of tourism and state development from 2006 through early 2011 for then-Gov. Mike Rounds.

Tidemann said Wednesday he also wants to look at the past two years of Future Fund grant distributions and the effects of those grants.

“I don’t want a long explanation but feel we should have some knowledge,” he said.

Rep. Susan Wismer said the three reports didn’t talk about the issue “most people are concerned about — SDRC Inc.”

SDRC received a state contract in 2009 signed by Benda and SDRC president Joop Bollen for the Aberdeen-based corporation to handle all EB-5 activities for state government. SDRC in turn charged fees from the foreign investors and from the companies who received the large loans.

Costello severed the SDRC contract in September 2013. Bollen dropped from public view.

Benda was found dead Oct. 22 at a farm near Lake Andes of a shotgun wound to the abdomen that Jackley’s investigation determined was a suicide.