PIERRE — In early May, reporter Bob Mercer submitted questions to former Gov. Mike Rounds regarding the EB-5 foreign investor program that was expanded during his administration from 2003 through 2010.

In 2009 a member of the Rounds administration, Secretary of Tourism and State Development Richard Benda, signed a contract designating an Aberdeen company, SDRC Inc., as the administrator for EB-5 in South Dakota. The contract was terminated in September 2013 by Benda’s successor in Gov. Dennis Daugaard’s administration, state Commissioner of Economic Development Pat Costello. Benda was found dead Oct. 22, 2013, of what authorities determined was a self-inflicted shotgun wound to his abdomen. Subsequently, news organizations began reporting on EB-5 in South Dakota and the investigation of Benda by state Attorney General Marty Jackley, whom Rounds appointed in 2009.

Rounds, the Republican nominee for the U.S. Senate seat up for election Nov. 4, provided his answers in writing a few days ago to Mercer’s questions as originally requested in May.

Here are the questions and answers verbatim, with changes only for capitalization, abbreviation, punctuation and correct names.

Q: EB-5 began for dairy development in South Dakota in 2003. What was your role in that decision?

A: I was aware of the desire to expand the federal program beyond dairy development. It's been reported that the federal EB-5 program has created more than 5000 jobs and added more than $600 million in capital investment in South Dakota. I wasn't involved in the transactional details — but I did agree with the concept to create those jobs and diversify South Dakota's economy.

However, the program and the personnel were responsible to the South Dakota Board of Regents. As governor, I wasn't directly involved in the transactional details of the expansion or in seeking the federal approval to do so. As you know. South Dakota International Business Institute resided within the South Dakota Board of Regents, and Northern State University President James Smith has reported that Mr. (Joop) Bollen was an employee of the university until December 21, 2009. On June 16, 2008 — then NSU President Patrick Schloss in responding to the South Dakota (Legislature’s) Government Operations and Audit Committee (GOAC) question: "Who (does) Mr. Joop Bollen actually work for; report to; and has management and fiscal oversight responsibility over his activity?" President Schloss responded to GOAC that "'management, personnel and fiscal oversight reside with the Dean of the Business School in collaboration with the Human Resources Office; Purchasing Office; Finance Office; and subject to the above (BOR) chain of command. All members of NSU are responsible to the SD Board of Regents.'"

Q: Joop Bollen was in charge of EB-5 and dairy development while he was employed at the South Dakota International Business Institute at Northern State University. How did you come to know him?

A: I was aware of Mr. Bollen's early efforts to expand dairy development in South Dakota, and I have always been supportive of dairy development in our state. Direct interaction was limited updates on SDIBI's efforts came by way of staff reports.

Q: Joop Bollen sought to expand EB-5's scope regarding dairy development to allow for more investors and a broader geographical range in South Dakota. What was your role in the initial expansion of the dairy component ofEB-5?

A: I was aware and supportive of the dairy expansion efforts. However, as governor, I was not involved in the day-to-day activities of the BOR program.

Q: Joop Bollen asked USCIS (United States Citizenship and Immigrations Services) to expand EB-5 for meatpacking, specifically for Northern Beef. What was your role in that effort? Did you support this fundamental change?

A: I was aware of and supportive of the desire to expand the federal program beyond dairy development. However, as governor, I was not involved in the transactional details or the effort to receive federal approval. I did sign a letter that certified that much of South Dakota was agricultural. This certification is required in order to expand the geographic eligibility for additional projects.

It’s important to understand that the state doesn't decide which projects get approved. Once the area of operation of the federal EB-5 program was expanded to the rest of the state, the decision as to what projects would be eligible is made by the federal government on a project by project basis.

My involvement and support was not unlike the federal EB-5 support expressed by South Dakota's entire congressional delegation. We were all supportive.

Q: Joop Bollen next asked for EB-5 expansion to include casino gambling, manufacturing, petroleum and coal projects and electricity production. At the time, South Dakota's economy appeared strong, as did the national economy, prior to the 2008-09 recession. Did you approve of this major change for EB-5? What was your role?

A: I was aware of the desire to expand the federal program. My support was similar to that expressed by South Dakota's entire congressional delegation. Before this issue was politicized (it) had broad bipartisan support.

We used many tools for economic development, this was just one of them. There was no reason to restrict the usage of these tools by private projects. The federal EB-5 program did not draw from state resources because the investments came from private sources and potential projects would decide whether or not they would apply for eligibility.

Q: In 2007 Bollen and others involved in South Dakota's EB-5 program traveled overseas to recruit EB-5 investors in Asia, including China. Did you approve? Did you consider going?

As NSU President Schoss stated in his June 16, 2008 letter to GOAC, SDIBI's management, personnel and fiscal oversight resided within the university and ultimately, the SD Board of Regents. A governor would not typically be aware of the travel schedule of a university employee.

I did not personally travel or recruit investors.

Q: In 2008 Bollen and Aberdeen lawyer Jeff Sveen formed SDRC Inc. and established the first LLC mechanisms for loan pools for EB-5 purposes in South Dakota. Were you involved in the discussions? Were the SDRC and loan pools part of your strategy for EB-5?

A: I was not. Based on the June 16, 2008 letter from the university to GOAC — SDIBI was still wholly responsible to the SD Board of Regents. I was aware of the desire to expand the program and seek federal approval to do so — but I was not involved, nor did I have a specific "strategy" to do so.

Q: In 2009, Richard Benda as secretary of tourism and state development and Joop Bollen as SDRC president reached a contract that privatized South Dakota's EB-5 administration and other activities. The contract was drawn by Tim Engel of the May Adam Gerdes Thompson law firm, under a long-standing contract agreement, for the Department of Tourism and State Development, and Jeff Sveen on behalf of SDRC. Did you approve of the concept? What was your role in the contract? Did you inspect the 2009 contract before it was signed by Benda? Did you approve him to sign it?

A: Not unlike the hundreds or thousands of state agency contracts, this transaction was handled at the department level and they utilized department counsel. I was aware of the desire to privatize the program in order to better compete with the 500 regional centers located around the country. I was advised that there were only two state government-managed regional centers and that privatization would help South Dakota compete at the national level. From a competitive standpoint, I agreed with the concept of privatization. I was not involved in the transactional details nor did I review the contract.

Q: Under what state legal authority was the contract formed in such a way that state government derived money from a portion of the fees charged by SDRC to EB-5 investors/lenders?

A: I was not involved with the transactional details of the contract. It was handled by the state agency in consultation with their counsel.

Q: The contract provided for state government to receive a reduced share of fees from two loan pools for Dakota Provisions. Why?

A: Once again, I was not involved with the transactional details of the contract. It was handled by the state agency in consultation with their counsel.

Q: Did the contract provide for a profit margin for SDRC? Did you receive any financial benefit from the EB-5 activities of South Dakota and SDRC? Did any friends, relatives or political acquaintances? If so, how much, to your knowledge?

A: As stated, I was not involved with the transactional details of the contract. It was handled by the state agency in consultation with their counsel.

I have no ownership interests in any projects financed by the federal EB-5 program or SDRC. I'm not aware of any family members having ownership in the projects. As the attorney general has repeatedly and publicly stated; beyond Mr. Benda, his investigation found no evidence of involvement from additional state officials.

The "beneficiaries" of the federal EB-5 program number in the tens of thousands. As reported: 5000-plus jobs, $600 million in capital investment local property tax payers. schools, 27 or more projects in almost as many different communities, utility users, investors. indirect jobs created, service providers. and spin-off businesses. Where. precisely, should we draw the line with "beneficiaries"?

Q: Were you aware in 2010 at the time of making the $1 million Future Fund grant to Northern Beef that $550,000 was to be diverted into an escrow account by Northern Beef to SDRC? Did you know the $550,000 was to pay the SDRC salary for Richard Benda and for other SDRC expenses?

A: No.

Q: Who approved the $550,000 increase in the Future Fund grant to South Dakota Development Corporation in late 2010? Were you aware of the increase? If not, how did you become aware of it?

A: My understanding is that Richard Benda acted independently and without my approval. I became aware of the transaction in the fall of 2013.

Q: In March 2013, Gov. Daugaard's office received a federal grand jury subpoena. Were you the target of any part of that subpoena? If so, for what purpose?

A: No. And, I believe the federal subpoena should be made public. So Attorney General Marty Jackley has repeatedly stated that I was rot a target of the investigation. Eight separate law enforcement and investigatory agencies have reviewed various aspects of this case. Local, state and federal authorities have worked cooperatively. And yet. the U.S. Attorney Brendan Johnson maintains his silence. The federal subpoena was delivered to the state in March or April of 2013, Governor Daugaard notified SD Attorney General Marty Jackley a short time later, the SD attorney general concluded his investigation in October 2013 — almost a year ago. The U.S. Attorney, Brendan Johnson, has had this file longer than anyone — despite the SD Attorney General concluding his investigation almost a year ago. The U.S. Attorney should release the federal subpoena.

Q: Were members of your administration from your time as governor the target of that subpoena? If so, can you identify them and for what reasons?

A: I do believe the federal subpoena should be released to the public. I cannot speak to the singular actions of Mr. Benda. What we do know is that the attorney general had summoned a grand jury. The attorney general has stated that his investigation — which concluded almost a year ago — found no evidence of involvement from additional state officials beyond Mr. Benda. What occurred was an isolated incident with a single state employee — allegedly taking place during and after his employment with state government. And again, the attorney general has clearly stated that I was not a target of the investigation and that no other state officials were involved.

Q: Are you otherwise aware of what was sought in subpoena? Did you and Gov. Daugaard confer about it? Did you and state Attorney General Marty Jackley confer about it?

A: No. No. No.

But, the federal subpoena should be released. I am confident that the public disclosure of the federal subpoena would also clarify that 1 was not a target. The U.S. Attorney has had the file longer than anyone. The attorney general concluded that no other state officials were involved, the attorney general has stated that I was not a target of the investigation — and yet — the U.S. attorney remains silent and withholds the federal subpoena from public disclosure.

Q: As governor, you were generally silent in the public arena regarding EB-5 as a development tool by your administration. You didn't address the Legislature about it. The state contract with SDRC wasn't publicly filed. Why?

A: As stated, I was not involved with the transactional details of the contract. It was handled by the state agency in consultation with their counsel.

Q: Did Gov.-elect Daugaard confer with you regarding the future of Richard Benda? Why wasn't Benda retained?

A: He did not.

Q: Did Richard Benda and/or Joop Bollen and/or Jeff Sveen remain in contact with you regarding EB-5 matters after you finished your time as governor?

A: No.

Q: Did you agree with Gov. Daugaard's decision, via Economic Development Commissioner Pat Costello, to terminate the SDRC contract in September before its schedule expiration? Why do you feel that way?

A: We did not discuss his decision. However, I trust his good judgment in making an appropriate and informed decision.

Follow @pierremercer on Twitter.

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