The SDWC Top 10 Political stories of 2014: #6 The EB-5 issue that wasn’t.
Early last legislative session, I’m told that an e-mail went out from a South Dakota state legislative leader to his caucus… as well as mistakenly to a Republican legislator who received it when they sent it to them. The marching orders for the Democrats were clear – (As it was related to me) the Dem leader directly said that they needed to keep the EB-5 federal immigration visa issue in the public eye at least through the June primary.
Welcome to South Dakota politics.
The EB-5 immigration visa program was one used in several instances by the State of South Dakota to attract foreign investment to opportunities that might require the type of investment that you don’t receive from banks. A little more pie-in-the-sky. A little more risk. And when one of those investments went under, it attracted a bit of attention.
Along with that attention, it also caused a review of how the program was implemented in the state, as well as how a state employee slid from a job with the state into the company that had been handling the EB-5 program in South Dakota.
Tragically, that same employee committed suicide prior to an indictment being brought accusing him of grand embezzlement.The most significant charge from the indictment may never be conclusively proven that the manner in which he was paid $550,000 was conducted in an illegal manner.
The result was (and is) an example of how long and convoluted a financial investigation actually can be as people trace transactions in and out of rabbit-holes. The investigation possibly involved at least one bad actor, and still resembles a badly tangled reel of fishing line as the state and federal government attempt to untangle it.
Now try to make a mess like that sexy, concise, and direct enough to be used against a candidate who was a level or so of supervision above the potential bad actor(s) in the matter.
Democrats tried to raise the issue early. It was too confusing, and too little information was known. How seriously was it taken by them at the time? Democrats on the legislative committee looking into it either skipped meetings, or in the case of the Democrat Gubernatorial candidate…..
At a legislative hearing in March, at which state officials answered numerous questions, Rep. Wismer said the following to a state-retained auditor: “Your report takes up about an inch of this book or more. Could you talk – I didn’t read it. Could you talk a little bit about what else takes up the rest of the inch of paper?”
With that little understanding of what took place, Democrats were ill-prepared to turn it into anything resembling a sound-bite at that point. And Republican opponents to Mike Rounds and Dennis Daugaard fared even more poorly as they attempted to raise the issue in the primary.
Post-primary, as more information came out and was released from the investigation into the death of Richard Benda, as well as the EB-5 investigation itself, opponents tried to latch onto nuggets and use them for political purposes.
Individually they failed, but each instance reinforced, or at least attempted to impress, one thing with the public – “EB-5 bad.”
The public couldn’t and largely still can’t pick out why it was bad or what was wrong with it. They just knew that all these people were making all sorts of accusations of unsavory behavior over it, whether truthful or not.
Democrats rallied publicly and made demands of the committee looking into it that went far beyond it’s statutory authority. They made demands which, if implemented, would have been violative of due process and 5th Amendment rights. But at this point in the campaign, it wasn’t about the rule of law – it had become full blown political theater.
And the issue remained completely confusing for most voters. After the issue had been railed on in the public eye for over a year, 79% of voters really didn’t care. As noted in the Argus Leader:
The Democratic campaign against Rounds has focused on his management as governor of South Dakota’s EB-5 program, in which foreign investors were recruited for South Dakota projects. After millions of dollars of ads attacking Rounds on the subject, around half of all voters say EB-5 has affected their vote. But most of them say it’s only had a minor impact.
Meanwhile 45 percent of voters say EB-5 has had no effect on their vote — driven by huge numbers of Rounds voters who don’t care about the issue.
“The only concern I have is that Weiland is making an issue out of it,” said Floyd Mills of Custer, a committed Rounds supporter.
Of the 21 percent who say EB-5 has had a major impact, Weiland wins 65-18 over Rounds, with Pressler at 12. It’s a mirror image among the larger group of voters for whom EB-5 hasn’t had an impact: Rounds wins 68-17 with Pressler at 6 percent.
After a year of a constant political drumbeat of the issue in a heated US Senate campaign, with millions of dollars spent attacking the Senate front runner Rounds over the issue, only 21% of voters cared enough that it mattered, and 20% percent of them sided with Rounds.
Considering that Mike Rounds won over Rick Weiland 50% to 21%, despite millions spent on advertising trying to convince people there was evidence of wrongdoing, the numbers in which it drove people away from the front runner Rounds could be said to be negligible. Considering that Dennis Daugaard won with a record setting percentage over his opponent who only was curious enough to request to know “a little bit about what else takes up the rest of the inch of paper?” it affected him even less.
There might be a lesson to be learned here. But ultimately it was that when it came to electoral politics, no matter how hard Democrats pushed the EB-5 issue few understood it, and even fewer cared.
Sometimes, it comes down to picking the right horse. And in the 2014 election cycle the EB-5 issue wasn’t it.