Rounds: Feds right in exercising oversight of EB-5 in SD

U.S. Sen. Mike Rounds said Thursday that the federal government is right in exercising its oversight of an investment-for-visa program pioneered in South Dakota when he was governor.

His comments came in response to questions about a federal notice that the state's participation in the EB-5 visa program, which allows wealthy foreigners to invest in projects in exchange for green cards, could be terminated.

U.S. Citizenship and Immigration Services determined that South Dakota's regional center for the program isn't promoting economic growth and said administrators have failed to submit required information to the agency, according to a late September notification.

Rounds said Thursday during a conference call with reporters that he hasn't seen the notice, but he believes the concerns raised in the report occurred when the regional center was run by a private firm or after he left the governor's office in 2011.

"I simply haven't looked at it," he said. "I haven't seen anything on it that suggests that I should respond to anything on that. If they've got questions on it that they need to have information on it, it's fair for them to ask those questions, but I haven't seen them."

However, September's notice cited a lack of credibility impacting the regional center's ability to promote economic growth, including allegations of mismanagement of the program that occurred during Rounds' time as governor, as part of the agency's intent to terminate the regional center

The state has until the end of the month to respond to the notice that the agency intends to terminate South Dakota's participation.

The senator said the program created thousands of jobs in South Dakota. But he said he hasn't taken a position on whether the federal EB-5 program should be renewed by Congress.

Congress gave the program a short-term extension until mid-December. Peter Joseph, executive director of the Association to Invest in the USA, an EB-5 trade association, said in a statement that there are five bills under consideration to re-authorize the program.

Many of the questions raised in a Citizenship and Immigration Services inquiry into the South Dakota regional center, detailed in the notification, concern the management of the program under Joop Bollen, who oversaw the program as a public employee and as part of SDRC Inc., a private company that he founded. SDRC entered into a contract in 2009 with the state to manage the program.

Rounds said in November 2013 that it was a strategic decision to separate the state from the regional center roles of marketing the projects to investors and overseeing the financing, since the EB-5 money was from private investors going to private companies.

South Dakota ended its contract with SDRC in 2013, and administration of the program went to the state. There haven't been any new EB-5 projects since the state took over.

Bollen has declined to comment about the notice.

Rounds served as South Dakota's governor from 2003-2011. The management of the program, which began in South Dakota in 2004, became a distraction for Rounds during his Senate campaign last year and was a major issue in the race. A beef packing plant approved as part of the program called Northern Beef Packers, which was pitched in response to Rounds' South Dakota Certified Beef initiative, went bust.

Rounds went on to easily win the Senate seat in 2014.

http://www.mitchellrepublic.com/news/politics/3867502-rounds-feds-right-exercising-oversight-eb-5-sd

Mentions

• South Dakota Regional Center Inc.
• Invest in the USA (IIUSA)
• Peter Joseph
• U.S. Citizenship and Immigration Services

States

• South Dakota