Senate races

FBI investigation into controversial SD visa program active

by Alexandra Jaffe

Former South Dakota Gov. Mike Rounds (R) says he was unaware of the $600,000 loan his Cabinet secretary approved for a beef plant just weeks before that secretary left to work for a firm that benefitted from the loan.

Rounds’s spokesman Mitch Krebs told the Argus Leader that Rounds “did not sign off on those requests” for the $600,000 loan increase and wasn’t aware of the increase “that he recalls.”

A staffer for Rounds’s successor, Gov. Dennis Daugaard (R), said the governor typically signs off on loans of more than $100,000 under the state’s controversial EB-5 visa program, which offered foreigners visas in exchange for investments in local projects.

Questions about the program have dogged Rounds and turned the race to succeed South Dakota Sen. Tim Johnson (D) into a nail-biter.
 
The FBI probe into the program is reportedly “active,” meaning additional details could dribble out in the final days of the campaign.
 
{mosads}Richard Benda, secretary of Tourism and State Development under Rounds, oversaw the state’s EB-5 visa program. 

Benda proposed a $600,000 loan to the Northern Beef Packers plant, just two weeks before he left office to work as a loan monitor for SDRC Inc., a company that managed EB-5 investment programs, including South Dakota’s.

Benda committed suicide in October of last year while facing indictment for allegedly attempting to redirect $550,000 from another $1 million loan to the plant — which Rounds did sign off on — to pay his own salary.

The latest statements by Rounds won’t put to bed continued questions from Democrats about his management of the program. He told the Argus Leader that he had no regrets about how he handled the program, and he only wished he had paid more attention to it, so he could explain it better to the public.

Polling has shown South Dakotans don’t believe he’s fully answered their questions on his management of the program, and he’s lost support in the race to former GOP Sen. Larry Pressler, now running as an independent. Democrats also see an opportunity for their candidate, Rick Weiland, to gain traction and are spending millions attacking Rounds on the EB-5 scandal.

On Tuesday, MayDay PAC launched its first negative ad against Rounds, suggesting he’s been lying about the visa program.

Pressler, meanwhile, has been hit with attack ads as well, from Republicans worried at the threat he poses to Rounds. But he’s getting an assist of his own from a group of former staffers, who are pouring an undisclosed sum — a “couple hundred thousand dollars,” one said — into an ad in which they all praise their former boss and decry the negative attacks against him.