- Associated Press - Monday, September 22, 2014

SIOUX FALLS, S.D. (AP) - Former Gov. Mike Rounds and Gov. Dennis Daugaard released written answers Monday to lawmaker questions about a federal job-creating program, but Democrats quickly dismissed the documents as incomplete and just further proof that both men need to testify in person.

The Government Operations and Audit Committee plans to review the answers Wednesday in Pierre and also prepare and send questions to Joop Bollen, the state’s former administrator of the EB-5 program.

That program, which allows foreign investors to seek U.S. residency with a $500,000 investment in an approved rural project that creates at least 10 jobs, is under scrutiny because of allegations of financial misconduct by Bollen and by the late Richard Benda, former commissioner of the Governor’s Office of Economic Development.

Democrats want Rounds, Daugaard and Bollen to answer committee questions in person, but the Republican majority on the panel instead allowed them to submit written answers to questions posed by its members. Authorities had concluded that Benda committed suicide in October.

The documents largely summarize what Rounds and Daugaard already indicated: that the state did not lose millions of taxpayer dollars, that lawmakers need to consult other agencies for some answers and neither had any knowledge of Benda purportedly stealing $550,000 when he left his job.

Rounds dismissed Democratic allegations of a conspiracy as nonsense because eight organizations, led by Republicans and Democrats, have looked into the issue.

“There has been irresponsible political innuendo without evidence,” he wrote.

Daugaard is running for re-election and Rounds is vying with three others for the seat being vacated by retiring U.S. Sen. Tim Johnson.

Rounds said that if elected to the Senate, he would support and lead a review of EB-5 and emphasize federal oversight, though the program has created thousands of jobs and added much to the state’s economy, especially during the recession.

Democratic Rep. Bernie Hunhoff, the House minority leader, said the written answers only muddled the discussion.

“The Daugaard administration said it happened before their time and the Rounds administration is saying it happened after his time. And he’s (Rounds) pointing fingers at GOAC and the Board of Regents,” he said.

Rounds said that state law didn’t require a bid before Bollen’s company, SDRC Inc., was granted the contract to administer the EB-5 program, and the contract was negotiated between Benda and Bollen, which is typical for such agreements.

Democrats earlier released documents showing Bollen founded SDRC five days before signing a deal with the firm and also did not disclose that he owned the private company.

At the time, Bollen was an employee of Northern State University, so he was responsible to the Board of Regents. As such, GOAC was responsible for investigating any wrongdoing and the governor’s office wasn’t part of the chain of command, Rounds wrote.

But Zach Crago, executive director of the Democratic Party, said the agreement that allowed Bollen to administer the EB-5 program required him to keep GOED in the loop.

“Neither Mike Rounds or Dennis Daugaard want to take ownership over Joop Bollen’s contract with himself as a state employee,” Crago said.

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