Committee concludes Benda responsible for EB-5
PIERRE (AP) -- A former state official who committed suicide last year was solely to blame for an investment-for-visa program scandal that spawned state and federal investigations, a legislative audit committee said in a report released Monday.
PIERRE (AP) - A former state official who committed suicide last year was solely to blame for an investment-for-visa program scandal that spawned state and federal investigations, a legislative audit committee said in a report released Monday.
The state Government Operations and Audit Committee's final report said Richard Benda was alone responsible for the controversy surrounding the EB-5 visa program, including hundreds of thousands of dollars in "misdirected" funds. Missing from the report were others Democrats have accused of having a hand in the program's mismanagement, including former Republican Gov. Mike Rounds - now an incoming U.S. senator - and Joop Bollen, a former state administrator who oversaw the program as a public employee and as part of a private company.
Sen. Larry Tidemann, the Brookings Republican who serves as chairman, said the committee could still look into Rounds and Bollen if federal investigations produce additional information.
South Dakota was one of the pioneers in EB-5 financing under Bollen and Benda, a former Governor's Office of Economic Development secretary. The program recruits wealthy immigrant investors for projects in exchange for green cards. But for more than a year, South Dakota's EB-5 program has been investigated by state and federal authorities.
Benda's suicide came as state officials prepared felony theft charges against him in connection with the financial misconduct, which left the state short of more than $500,000.
The Legislature asked the audit committee to look into the controversial visa program during the 2014 session. Democrats want a more thorough accounting of Bollen's role in the program's troubles and have criticized Bollen for moving the program under a privately run company he created. Bollen headed the program for the state when he was in charge of the South Dakota International Business Institute at Northern State University. The program was privatized in 2009 and turned over to SDRC Inc., a company which Bollen had founded and served as president.
Bollen disputed in written testimony to the committee his ownership of the company and said that he didn't believe the document linking SDRC, Inc., and the university business institute was a contract.
Rounds was criticized during his campaign for U.S. Senate for his role in overseeing the program and his opponents accused him of being untrustworthy.
Tidemann said the committee will put forward legislation during the 2015 session to require a waiting period during which state officials who leave government employment can't enter into contracts with the state as members of the private sector. The measure is meant to discourage conflicts of interest during the contracting process.
It builds on already instituted measures to correct problems in state government exposed by the visa program. The executive branch has tightened oversight of officials' travel and lawmakers last session passed legislation that allows the governor's economic development office to perform background checks on upper-level staff.
Tidemann also said that chasing after Bollen was outside the committee's authority. He said lawmakers could return to the issue if the pending investigations yield new findings.
But Democrats are unsatisfied. Sen. Larry Lucas, D-Pickstown, said Democrats will prepare a companion "minority report" that will ask the Legislature to appoint a special prosecutor to continue reviewing the program and ask lawmakers to allow the audit committee to continue looking into the EB-5 controversy next year.
"I still think it's our due diligence as state officials to make sure we have covered all our bases in the matter," Lucas said. "Right now I'd say we're about on third base."