SIOUX FALLS, South Dakota — South Dakota Democratic lawmakers are calling on a legislative committee to issue subpoenas for Gov. Dennis Daugaard, former Gov. Mike Rounds and others involved in the state's program that administered an investment-for-green-card program.
Lawmakers on Tuesday said the Government Operations and Audit Committee should issue the subpoenas to seek answers regarding allegations of financial misconduct at the Governor's Office of Economic Development.
"The state legislature has a responsibility to the taxpayers to hold the executive branch accountable as part of our democratic system of checks and balances," Rep. Bernie Hunhoff said from prepared remarks at a press event.
A state audit found that before Richard Benda left his job as head of economic development in 2010, he tacked on an extra $550,000 to a grant agreement to help the struggling Northern Beef Packers plant in Aberdeen. A report from Attorney General Marty Jackley showed the same amount was improperly diverted to SDRC Inc., Benda's new employer.
SDRC, managed by businessman Joop Bollen, administered the EB-5 visa program in the state, which allows people to seek U.S. residency if they invest at least $500,000 in approved projects. The failed Northern Beef Packers plant in Aberdeen was funded in part through that program and was also the project through which Benda arranged the transfer.
Hunhoff said the Democratic lawmakers hope that mounting pressure from newspaper editorials and the public lead the committee to force Rounds and Daugaard to explain "what they know and when they knew it" regarding the program.
Hunhoff and others said Daugaard, Rounds and Bollen must explain where the $550,000 in question is, whether Benda was working alone when the money was diverted and what they categorized as finger-pointing between the Rounds and Daugaard administrations.
"The governor is also frustrated that we cannot learn more about what state and federal investigators have found involving the EB-5 program, but he understands that is how the process works," Tony Venhuizen, Daugaard's spokesman, said in a statement.
Venhuizen said that although Jackley may have learned more information about the fate of the $550,000, "state officials do not know what happened to those funds once they were received" by Northern Beef.
A spokesman for Rounds said the former governor "has fully cooperated with the state's investigation and he will continue to do so."
Daugaard and Rounds are Republican. Daugaard is running for re-election in November and Rounds is seeking a U.S. Senate seat.
The Democratic lawmakers on Tuesday asked for a subpoena against Bollen. In July, lawmakers on the committee rejected a motion by member Democratic Rep. Susan Wismer to subpoena Bollen. The Governor's Office of Economic Development ended its contract with SDRC in September.
Bollen could not be reached Tuesday.
Jackley last month said he was ready to file felony theft charges and seek an indictment against Benda days before he committed suicide last fall.
A draft of the complaint against Benda showed that Jackley would have charged Benda with three alternate felony counts alleging he illegally obtained $550,000 in economic development money intended for the Northern Beef Packers plant and double-billing the state $5,559.80 for three flights to China and Las Vegas.