South Dakota AG releases economic development probe, Benda death documents to auditor general

SIOUX FALLS, S.D. – South Dakota Attorney General Marty Jackley said Friday that he is releasing criminal investigative and state grand jury information to the Department of Legislative Audit to assist with its examination of the Governor’s Office of Economic Development.

Jackley and state Auditor General Martin Guindon filed the joint motion with the 6th Circuit Court on Friday, and it was approved by the judge the same day. It will be up to the state Department of Legislative Audit to decide what records will be made public when it issues its report, Jackley said.

“The Auditor General will further define what is necessary,” he said.

Guindon said he’s not sure what documents may be made public with the report and that he cannot comment on an ongoing investigation. He expects the report to be completed by Jan. 24.

“That’s still our goal,” Guindon said.

Gov. Dennis Daugaard announced an investigation into possible financial misconduct before his administration. The news came in October, a day after the funeral of former economic development director Richard Benda.

Benda had left state government when Daugaard took office. Benda accepted a loan monitor job with SDRC Inc., a privately held Aberdeen company that recruited foreign investors for the failed Northern Beef Packers plant and other ventures in the state.

The Governor’s Office of Economic Development for years contracted with SDRC to administer the federal EB-5 program, in which foreign investors can secure permanent residency for as little as $500,000. South Dakota has since cancelled the contract.

Jackley’s investigation found that $550,000 of a $1 million state grant given to Northern Beef for construction and equipment costs was improperly diverted to SDRC to pay EB-5 immigration loan monitoring fees. He also found that Benda had double-billed the state for three flights.

No charges have been filed, but a federal investigation into the use of the EB-5 program in South Dakota is ongoing.

Jackley has said his office is assisting the U.S. Attorney’s Office and the Department of Justice, which have primary authority over federal immigration law and the EB-5 program.

Northern Beef opened on a limited basis in 2012 after years of delays, but the company filed for bankruptcy protection in July because it lacked money to buy cattle for slaughter.

San Francisco-based investment banking firm White Oak Global Advisors submitted the winning $44.3 million credit-and-cash bid for the idled plant during a bankruptcy court auction in December. The sale closing is pending court approval.


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