Quick hits from the just-released audit of the Governor’s Office of Economic Development with regards to the EB-5 program:
- Richard Benda, who oversaw the EB-5 program as economic development secretary and then went to work for the EB-5 program monitoring Northern Beef immediately after leaving office, approved an increase in state aid to Northern Beef Packers after he had already discussed this future work. The report concluded Benda should have been required to disclose his employment plans and recuse himself from anything to do with Northern Beef after that point: “The GOED should have had a policy in place that would have required Secretary Benda to disclose his future employment plans and remove himself from involvement in subsequent matters relating to NBP,” the audit concludes.
- The state had highly inadequate systems set up to monitor its EB-5 contract with SDRC, Inc. SDRC’s email updates were “inadequate” and didn’t include bank statements to corroborate claims. “Documentation was not adequate to determine whether the DTSD or the GOED was receiving the copies of books, records and reports that were required to be provided.” Expenses were approved by Benda with no supporting documentation. For three years, bank accounts related to SDRC were not included in the state’s annual financial reports.
- There was a very freewheeling approach to expense vouchers by Benda. In addition to the previously disclosed double-billing of airline tickets, the audit found Benda submitted, and was paid, reimbursements for nearly $15,000 in “translation services.” These six payments were made “in cash” and were handwritten. One was written on the letterhead of a Philippine hotel with four handwritten names. Five said, “pay by cash next trip.” All said the document was the “only invoice available.”
Lt. Gov. Matt Michels, speaking just now, said that even before these shortcomings were identified in the reviews, the cash payments couldn’t have happened under Gov. Dennis Daugaard’s administration.
"I can’t understand how it was happening before," Michels said. He noted that foreign trips under Daugaard have involved the governor and senior staff and been much more formally organized.