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EDITORIAL: Does EB-5 probe stop at Benda?

EDITORIAL: Does EB-5 probe stop at Benda?

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South Dakota Attorney General Marty Jackley told a legislative committee last week that he had prepared a criminal complaint and arrest warrant for Richard Benda just before his death last year.

Jackley told the Legislature’s Government Operations and Audit Committee that he called for a grand jury to meet on Oct. 28, 2013, to consider the matter involving Benda’s involvement in South Dakota’s EB-5 immigrant-investor visa program. Benda’s body was discovered on Oct. 22, 2013, on a Lake Andes farm. A coroner’s report ruled he had committed suicide with a shotgun.

Jackley said the charges were that Benda diverted $550,000 from a state grant administered by his office to pay for two years of his salary after he left state government. The other charge was that Benda double billed for airline travel.

The money that was allegedly embezzled was part of a $1 million state Future Fund grant that Gov. Mike Rounds’ administration provided to Northern Beef Packers of Aberdeen in 2010. Benda worked for Rounds as secretary of tourism and state development until Dennis Daugaard became governor in January 2011. Benda then went to work for SDRC, which had taken over the EB-5 program. SDRC was created in 2008 by Joop Bollen.

Jackley also disclosed that Bollen was interviewed as part of the investigation -- but he didn’t publicly reveal what he said -- and reminded the panel that an earlier audit found that no state money was missing.

Based on the actions of the legislative committee, or rather inaction, the panel apparently considers the EB-5 issue closed and is entirely laid at the feet of Benda. According to the joint resolution authorizing its investigation into the EB-5 scandal, the committee will issue a report in 30 days.

Before the committee gaveled to a close last week, Rep. Susan Wismer, D-Britton, called on the panel to subpoena key members of the Rounds and Daugaard administrations involved in the EB-5 visa program and Bollen, president of SDRC, the private company that was running the program during the time of Benda’s alleged embezzlement. Wismer’s motion to continue the investigation was ignored by the panel. Wismer is running against Gov. Daugaard as the Democratic candidate for governor.

In an op-ed written by Wismer and published by the Journal on Monday, she complained that the committee did not subpoena witnesses who could reveal more information about what went wrong in the state’s EB-5 visas program.

“It’s time to let the light shine on EB-5,” Wismer wrote. “South Dakotans deserve answers.”

We are in agreement with Wismer. The legislative panel should subpoena members of both the Rounds and Daugaard administrations who were involved in the EB-5 visas-for-investment program so the public can hear for themselves what was going on rather than be told what happened by parties who may have an interest in controlling the flow of information.

That doesn’t necessarily mean that there’s more to the story than Benda’s alleged misconduct. But when the Legislature’s committee -- which is tasked with finding out what went on in the EB-5 program and report its findings to the public -- goes into executive session and refuses to hear from anyone other than the attorney general, it invites speculation that we’re not being told all the facts.

If there’s nothing to hide, why keep secrets?

[Editor's note: This editorial was changed to reflect a clarification.]

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