Poli Sci Prof Examines EB-5 In Election

Sep 16, 2014

One political scientist says election activity revs up after Labor Day. An increasing number of press conferences, debates, news releases and campaign stops prove his point. As more stories make the air and the papers, it may seem like election overload. 

With less than two months until election day, South Dakota candidates are becoming more active in the political process. Northern State University Professor Jon Schaff says that’s typical for this time of year.

"I don’t sense that there is any greater level of playing politics, if you want to put it that way in the lowest sense of playing politics," Schaff says. "There isn’t any more of that this year than in previous years."

Schaff says South Dakotans may notice the political jabs more often in the campaign for United States Senate. He says that’s because it’s the closest of the major statewide races. Schaff says all candidates often use election season to emphasize the ways they stand out from other political hopefuls.

"Competing candidates sometimes exaggerate distinctions, or, if they find a particular argument, they might exaggerate the importance of it because they want to make a very sharp distinction with their opponent," Schaff says. 

One main issue many candidates keep mentioning is the EB-5 foreign investor visa program.

"The fact of the matter is this is political corruption, and, in political corruption, politics gets involved. That should not obscure the matter at hand. It should focus the matter at hand," South Dakota Democratic Party Executive Director Zach Crago says.

Crago has helped set up several press conferences about EB-5 in the last couple of weeks. He says examining the way leaders handled the program is a valid election issue.

"And I think, by laying out these documents, by explaining the story and the timeline in a way that hasn’t been shared by Mike Rounds or Dennis Daugaard or others, we are doing our part to let sun shine on this matter that’s been concealed for so long," Crago says.

Crago says Republicans were in charge when a lawsuit putting South Dakota tax dollars at risk began. He says Republicans lead state government when a Board of Regents employee at Northern State University created his own company and gave his new business administration of the EB-5 program. Crago says that cost the state $140 million dollars that went to a private businessman instead of into state accounts.

Dick Wadhams is a consultant for the South Dakota GOP. He says the Democrats don’t have any new revelations relating to problems with the EB-5 program. Wadhams says the state of South Dakota didn’t actually lose any money – in successful EB-5 projects or even in one venture’s bankruptcy.

"Investors in the Northern Beef Plant lost money, but the state of South Dakota did not lose a dime," Wadhams says. "In fact, the State of South Dakota recouped all of the money that it had in the program."

Wadhams says this is pure politics.

"I frankly believe they are desperate, nonsensical attempts to try to help Rick Weiland and his failing campaign by trying to pin EB-5 issues on Mike Rounds," Wadhams says. 

The question is, who is right? Northern State University Political Science Professor Jon Schaff answers.

"I think it’s fair to say that there’s at least something to both arguments. It’s fairly obvious that within the EB-5 program and the economic development office with the state under Governor Rounds that there was corruption. We know that Richard Benda was soon-to-be indicted before his tragic death.  So we know that something was going on, and there certainly is a lot of smoke there and likely at least some fire," Schaff says.

Schaff says it makes sense Democrats are trying to link their Senate rival, Mike Rounds, to the scandal. He says it’s valid to question whether he was aware of the corruption and what he did about it as the chief executive of the state. But, Schaff says, Republicans in South Dakota are dominant, so Democrats are bound to capitalize on an issue that could damage their political rivals.

"The Democrats are behind in most races. They’re looking for an issue. And, in the normal course of things, this would be a very strong Republican year within our state," Schaff says. "And I think what Democrats may have determined is that here is one issue that they can use against Republicans."

Schaff says Democrats have to be careful, because they could damage their own arguments if they push too far or make the entire campaign about EB-5. That could burn out voters and turn them away from Democratic candidates. But the political scientist says Republicans have their credibility on the line, because they run the risk of appearing to endorse corruption if they gloss over EB-5 issues.

Schaff says EB-5 isn’t automatically an election issue, but he thinks it’s valid for politicians to have public discussions about both the program itself and how the state has handled it in the past. Schaff says it’s a bigger challenge than other issues, because all the details aren’t public. He says voters have to recognize the context of the EB-5 arguments and remember that an election is a competition.

This story originally aired on September 12, 2014.