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Senate advances anti-corruption board

Senate advances anti-corruption board

EB-5 Visa, EB5 Visa, EB-5 Investment

The Daugaard administration’s proposal to deter corruption in state government and throughout South Dakota’s public education system won unanimous approval Wednesday from the state Senate.

The 35-0 vote to create a new state Board of Internal Control sends SB 162 to the House of Representatives.

The House has already approved 67-0 a separate measure to regulate conflicts of interest involving members of state boards, commissions and authorities.

That legislation, HB 1214, came from Rep. G. Mark Mickelson, R-Sioux Falls, and Sen. Deb Peters, R-Hartford. A Senate committee holds a hearing on their measure Feb. 29.

The internal-control legislation approved Wednesday is the product of Lt. Gov. Matt Michels, who led the project at the request of Gov. Dennis Daugaard. The Senate’s two partisan leaders praised the results.

“What’s occurred in this bill is pretty thoughtful,” Senate Republican leader Corey Brown, of Gettysburg, said.

The board would develop a system of control, a code of conduct and a conflict-of-interest policy that would apply to all state agencies and to all recipients of state funding for education no matter where in a chain of recipients they receive state money.

All grants and agreements would be publicly posted on state government’s websites, while responses to audit findings would be checked and followed. The board would work with the Legislature’s Government Operations and Audit Committee.

“I think this is a terrific first step to try and shore up, and be consistent, across state government,” Brown said.

Senate Democratic leader Billie Sutton, of Burke, said part of the plan’s importance is it reaches to recipients, sub-recipients and sub-sub-recipients.

 “It takes some very bold steps, I think,” Sutton said.

Daugaard’s request that Michels work on a proposal came in the wake of the EB-5 immigrant investor scandal that came to light in 2013 and the Mid Central Education Cooperative scandal that arose in 2015.

One former state employee allegedly killed himself over the EB-5 matter, and the Mid Central business manager allegedly shot to death his wife and their four children, set their house afire and then killed himself. The wife was the assistant business manager.

All seven deaths happened in Charles Mix County.

SDRC Inc. of Aberdeen operated the EB-5 program starting under then-Gov. Mike Rounds’ administration under a contract with the Governor’s Office of Economic Development.

Federal authorities issued notice last year that South Dakota would be dropped from the program. State government in turn filed a lawsuit against SDRC Inc.

Mid Central, based in Platte, received millions of dollars annually from the federal government through the state Department of Education for GEAR UP. The program is intended to encourage American Indian high school students to pursue higher education after graduation.

The Mid Central deaths came less than 24 hours after the cooperative’s executive director received notice in September from state Education Secretary Melody Schopp she was withdrawing the contract. The state Board of Regents now oversees the program.


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