Posts Tagged ‘Governor’s Office of Economic Development


Jackley to release Benda info to auditor general

PIERRE, S.D – Attorney General Jackley announces that the Attorney General and the Auditor General today filed a joint motion with the Sixth Circuit Court. This joint motion requested a court order authorizing the Attorney General to lawfully release criminal investigative and state grand jury information in the custody of the Attorney General to the Department of Legislative Audit.

“The Legislature and our courts have set limitations on a prosecutor’s ability to release criminal justice information, and I do believe that privacy protections provided by our laws are important and worthy considerations,” stated Attorney General Jackley. “Disclosure of the Benda criminal investigation matters to our State’s Auditor General for a lawful purpose is and should be occurring through proper procedures, not as some suggest by dangerously giving prosecutors unlimited authority to release criminal investigations that may involve innocent witnesses or suspects.”

The release of the documents and information is for the purpose of assisting the Auditor General in completing the Department of Legislative Audit’s financial and compliance audit of the Governor’s Office of Economic Development (GOED) for the period of FY2010 through FY2013. Under South Dakota law, the Department of Legislative Audit has authority to obtain access to financial records that are in the custody of state agencies in order to perform its auditing activities. The Auditors for the Department of Legislative Audit have determined that the Attorney General may have financial records and information pertinent to the GOED audit in the following areas:

  •   Reimbursements to former Department of Tourism and State Development Secretary Richard Benda regarding trips to China that were paid from state funds and from the Expense Fund maintained by South Dakota Regional Center, Inc. (SDRC), which under the agreement between GOED and SDRC are state funds.
  •   The flow of the $1,000,000 Future Fund Grant monies from the Office of Governor to Northern Beef Packers Limited Partnership (“Northern Beef”); the flow of $550,000 of those monies subsequently transferred by Northern Beef to SDRC; and how the $550,000 was used by SDRC.
  •   Other grants, loans or payments made to Northern Beef by the GOED or any other state agency, directly or through the South Dakota Development Corporation (a nonprofit corporation affiliated with GOED and staffed by GOED employees).
 The Auditor General anticipated that some of the financial documentation and information contained in the investigation file and obtained by agents in the course of their investigation are not available from other state agencies or third parties, and that the release of such documentation would also eliminate duplication.

The Court has issued an Order allowing the Attorney General to release the Division of Criminal Investigation Reports reasonably necessary for completion of the Department of Legislative Audit’s financial and compliance audit of GOED, consistent with the Attorney General and Auditor General’s joint motion. The Court noted “This Order neither increases nor decreases any statutory requirements of confidentiality; all such provisions remain in effect. The Order simply allows these two agencies to share information in the exercise of their respective duties.” The Court further made clear that “except to the extent any information is necessary for inclusion in the Department of Legislative Audit’s public audit document, all documents and information obtained under this Order shall be held confidential and only accessed by the Auditor General and those members of his staff that are part of the GOED audit.”


Death certificate: Benda used stick to push trigger

SIOUX FALLS, S.D. (AP) — The death certificate for former state economic development director Richard Benda says he shot himself by pushing the trigger with a stick.

The Argus Leader obtained the document Wednesday ( ).

The certificate says Benda secured the shotgun against a tree and used a stick to press the trigger and shoot himself in the abdomen.

Benda was found Oct. 22 in a grove of trees near Lake Andes, in southeast South Dakota.

Attorney General Marty Jackley announced autopsy results last week indicating it was suicide.

Benda served as secretary of Tourism and State Development from 2006 to 2010 under former Gov. Mike Rounds.

State investigators say that during that time, Benda double-billed the state for three flights, valued at about $5,500.

He also was the loan monitor for Northern Beef Packers.


Information from: Argus Leader,


Feds looking into SD beef plant

DIRK LAMMERS, Associated Press

SIOUX FALLS, S.D. (AP) — Federal authorities are investigating the finances of an idled beef plant and a federal immigration program that supplied much of its funding, two former chief players in the company told The Associated Press on Thursday.

The revelation comes a day after Gov. Dennis Daugaard said the state’s economic development office was being investigated. Daugaard declined to provide details of that investigation, and state officials on Thursday refused to say whether the investigations are the same. News of the probes comes soon after a former top official in the development office was found dead with a gunshot wound.

Dennis Hellwig, who stepped down as Northern Beef Packers’ general partner more than four years ago, and Bob Breukelman, the plant’s former construction engineer, told the AP they have been questioned by federal investigators about the idled Aberdeen plant’s financial dealings and the federal EB-5 program, in which foreign investors can secure permanent residency for as little as $500,000.

“There were some discrepancies in the way the EB-5 program was being handled,” Breukelman said.

Neither Hellwig nor Breukelman would go into detail about the agents’ questions or their responses.

On Wednesday, Daugaard told the Sioux Falls Argus Leader an investigation was underway into the Governor’s Office of Economic Development prior to Daugaard’s administration involving possible financial misconduct. Daugaard declined to provide details of that inquiry, but said there “has also been a federal investigation.”

Daugaard’s statement was made public a day after the funeral of Richard Benda, who was found dead with a gunshot wound on Oct. 22 in a grove of trees near Lake Andes. Benda, who had served as secretary of the department handling tourism and economic development from 2006 to 2010 under former Gov. Mike Rounds, was Northern Beef’s former loan monitor.

South Dakota Attorney General Marty Jackley said Benda’s death remains under investigation, and a final autopsy report is expected in two weeks to a month.

“We’re treating that as a crime scene because there was a gunshot wound indicated,” Jackley said.

Neither Jackley nor Daugaard’s spokesman, Tony Venhuizen, would comment on whether the investigations Daugaard revealed Wednesday involve Northern Beef, Benda or the Aberdeen-based South Dakota Regional Center, which arranged EB-5 loans to the beef plant and other projects in the state.

Allegations about the South Dakota center have drawn the attention of U.S. Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Judiciary Committee. Grassley in February sent a letter to the U.S. Citizenship and Immigration Services asking the agency to look into the “possible violations.”

Northern Beef Packers opened its $109 million state-of-the-art facility on a limited basis in 2012 after years of delays. Its owners filed for Chapter 11 bankruptcy protection less than a year later, saying they didn’t have enough money to buy cattle for slaughter. With $138.8 million in liabilities and just $79.3 million in assets, according to court documents, the plant laid off most of its employees.

The plant was pitched in 2006 in response to Rounds’ South Dakota Certified Beef initiative. Rounds, who is now running for U.S. Senate, hoped to get the state’s ranchers premium prices by allowing consumers to track animals from birth, through a feedlot and to a meatpacking plant.

Rounds said in a statement issued Wednesday that he “recently became aware of an investigation into some alleged misconduct” but referred all questions to Jackley. Mitch Krebs, Rounds’ Senate campaign spokesman, said Thursday the former governor would not comment further.

Once locally owned, Northern Beef Packers is 41 percent owned by businessman Oshik Song with 69 other South Korean investors who each gave at least $500,000 under the federal EB-5 program. The plant used the funds to spur the start of construction, and Hellwig stepped down as general partner when the Korean investors asked to buy out his shares.

The new owners recruited another round of EB-5 investors, but the new investment fund provided loan money instead of equity shares in the company. Northern Beef eventually began to ramp up production earlier this year to about 200 head a day — far short of the 1,500 capacity — after obtaining additional financing.

Bankruptcy attorneys have asked that a minimum bid of $12.75 million be set for the plant, which is scheduled to be sold at auction on Dec. 5.



EB-5 Program:


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November 2018
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