News, notes, and observations from the James River Valley in northern South Dakota with special attention to reviewing the performance of the media--old and new. E-Mail to

Wednesday, January 29, 2014

Why the prospects are better for Ukraine than for South Dakota

It is not as if there is not plenty of evidence of corruption in South Dakota or that organizations that monitor integrity in government have not listed South Dakota's deficiencies in the openness-and-honesty department.  The Better Government Association has published its ranking of South Dakota as 47th of the 50 states on its Integrity Index.  In  a multi-organization integrity project, South Dakota is one of seven states to be graded F in integrity and its individual report card places it at 49th of the 50 states.  

Corruption Risk Report Card
Rank among 50 states: 49th

  Overall grade: F
Click a category to see detailed scores and notes.
 South Dakota reporter Denise Ross supplied the basis for these ratings.  

Only through strenuous and obstinate denial is it possible to escape the fact that the state has serious moral and cultural problems with openness, honesty, fairness, equality, and justice.  That is why, despite the constant measures of deficiencies in moral character which brand the state, nothing changes.  No movements to improve go beyond a few disapproving mutterings and a few legislative attempts that never get out of the committees in the GOP-run legislature.  However, the self-deceit that allows the people to accommodate such inferiority of state character is bipartisan.  People of all political persuasions insist on referring to the "great state of South Dakota."  But by the measures of the human values of decency, forthrightness, honesty, and good will, South Dakota dwells on the bottom.  

South Dakotans like to brag about their work ethic.  That has bothered me since I moved to this state over three decades ago.  They believe that no people in the rest of the world are as enterprising, conscientious, and effective as they are.  Like many professors who moved here from other places,  I found the amount of work students were willing to do dispiriting.  The kind of assignments that would send students scuttling off to get the work done in other places was met with whining and complaining in South Dakota.  Students resented foreign students because they set such a high standard of study and accomplishment.  And students who transferred from other places were dismayed at the low expectations they encountered in South Dakota. Many South Dakota students did not distinguish  between appearing busy and engaging in actual, productive work. 

Perhaps, the most difficult attitude to deal with in South Dakota involved academic cheating.  One day a delegation of advisees came into my office to register a complaint about something that happened in a class they were in together.  The professor thought it was instructive for students to grade each others quizzes.  In seeing mistakes in others, he thought, students had a better understanding of their own learning processes.  The students who came to see me informed me that the majority of students in his class actually corrected the answers on their classmates' papers by changing them.  The delegation told me that the result was that they were punished for being academically honest because their errors were marked off instead changed and they were consistently getting lower grades than those who collaborated on cheating.  As one of the students commented,  that kind of widespread dishonesty makes a fool out of anyone who actually studies and does the work honestly.  

I brought the matter up with the dean of the college, who spoke to the professor and convinced him he needed to change his grading practices, but the dean also raised the issue in a faculty meeting.  A response from some of the faculty was that cheating was probably no worse on our campus than at any other.  Those of us who studied and worked at other places confronted that notion.  At other places, intentional plagiarism meant not only an automatic failure of the paper, but an automatic failure of the course.  So did cheating on tests.  The policy was to let the student know that academic dishonesty disqualified a student from a degree, but by taking a course over again, the student had a chance to rectify the matter.  However, a severe or repeat violation of academic honesty would result in the expulsion of a student.  For those of us who studied, earned our degrees, and worked in institutions that arduously protected the integrity of the degrees, the casual and sometimes mocking attitude toward cheating among some South Dakota colleagues was devastating to any sense of professional ethic.  They promoted, perhaps unwittingly, the idea that academic work is a game and anything you can get away with is fair.

That attitude toward cheating is reflected in the notion prevalent in South Dakota about  business practices and what constitutes an entrepreneurial enterprise.  Anything a business can do to make money and gain power is fair game.  Honesty is a posture one projects for the fools who are customers and possible investors, but it is an unnecessary encumbrance to the actual running of a business.  There are honest businesses, but there are many people who pose as business leaders who promote the idea that good business decisions are matters of making money, not matters of how those decisions will affect a community or the people touched by them.  Profits trump all  other considerations. These leaders insist that the only purpose of a business is to make money and that is the sole criterion in making business decisions. 

The complications that have been revealed in the bankruptcy of Northern Beef Packers and the investigations into the EB-5 loans, the layers of financing by companies that operate by stealth, and the blanket of laws that make the stealth legal, and prevent the public from knowing what has actually occurred are expressions of a great tolerance for cheating and dishonesty in the South Dakota culture.  Other states, such as Illinois, are regarded as corrupt, but that is because the corruption is exposed and dealt with.  Illinois has freedom of information laws and rules that require all actions involving the state to be recorded and made public.  South Dakota has laws that provide ways to keep the public ignorant.  The real problem is that the majority of people take refuge in that ignorance and prefer to bask in the notion that they live in a great state.

Currently, there are protests and demonstrations in Ukraine over the government's corruption and oppression.   They started when the people indicated they wanted an alliance with the European Union and the president rejected it in favor of an alliance with Russia.  That triggered a revolt and brought the protesters out on the streets.  The people in the streets decided it was time to address the corruption and oppression, too.  As is usually the case with corruption, the complicity of government with businesses looking to gain advantage through under-the-table dealings siphoned money and opportunity away from the people and gave it to the predatory interests at work. 

The government decided to meet the public demands with more oppression.  At the instigation of the president, the parliament rushed through a series of laws that criminalized the protest tactics used by the people.  However, the people increased their resistance and opposition, and the president and parliament repealed the laws

In South Dakota, the legislature doesn't have to pass laws to suppress and control any opposition from the people.  The blanket of laws that authorize the government and its chosen business partners to operate by stealth and make organized crime legal are already in place.  They prevent people from access to information about what officials are doing and how government operates; they uphold a system of justice largely devoted to enforcing those suppressive laws and diverting public attention from what officials are doing by filling the prisons with petty offenders who take to drink and drugs as a way of dealing with oppression and injustice. The intimidation in those acts of using criminal punishment keeps the public in line.  

When the state treasurer found that the governor's henchmen were accruing funds from their business cronies, the governor would not say how much money was involved, where it was banked, or where it came from.  As the treasurer called for investigation, the governor had his  legislative cronies make it a crime for any state official to reveal to the public that an investigation into  possibly illegal activities was taking place.  The treasurer backed off from any investigation because he said he did not want to go to jail.  In Ukraine, the people rose up in demonstrated opposition to such laws.  In South Dakota, they complied.  

Cory Heidelberger's Madville Times has tracked and reported on the developments in the Northern Beef Packers bankruptcy,  the financing by stealth, and the handling of the EB-5 loans. A majority of the comments on the blog express concern and disapproval of the fact that 400 people who went to work for NBP in good faith lost their jobs and that Chinese and Korrean EB-5 investors lost $60 million, and that the Aberdeen community had been jerked around with misleading, often false information.  Some commenters insist that all is right in state government and that what happened with NBP-EB-5 scandal was merely a matter of a business plan gone awry.  A self-appointed spokesperson for the GOP majority presents Madville Times readers with a screed of denial.  He is a former member of the state government's economic development department, and defends the whole affair as business as usual, and dismisses any concerns about the stealth financing and misinforming the public by stating "to assert there was rampant 'misdealings' is not supported at all by the facts."  The facts are that from conception to eventual failure, the NBP project  is a history of misdeal after misdeal, and representatives of state government were involved every step of of the way.The plan originally slated for Huron suddenly collapsed amid rumors that the Governor became displeased with it.  It migrated to Flaudreau where its failure cost the Flandreau Development Association and the Farmers' Union hundreds of thousands of dollars. When the plan was revived in Aberdeen, the spokespersons for the state government, the development agencies, and the developers carpet-bombed the people with claims about what the plant would do for them and the cattle industry in the region, but the difficulties it was experiencing with financing were never openly addressed.  It turns out the state, which committed millions of dollars in loans, knew of them. but the shaky and shady nature of the project was not known until contractors began filing mechanics' liens in order to get paid for their work.  NBP was granted TIF bonds, but they wouldn't sell.  Investors scorned the idea.  It was not reported in the news media until very late in the development that $60 million of the money came through EB-5 loans. And that information did not get reported until some of the Chinese and Korean investors sued the South Dakota Regional Center, broker for the loans, for not supplying full information about the risks of the investments.  Then the bankruptcy hit, the loan monitor committed suicide, announcment was made that both state and federal agencies were investigating the scheme, and the story of offshore stealth companies were shuttling money around. In the history of this scheme, there is nothing but incident after incident of misdealing.  

The economic devleopment and business-as-usual defender echoes that attitude toward cheating in his appraisal of what happened to the EB-5 investors:   "I don't get the consternation about the lost money from the Chinese and Korean investors." he said.   "They invested this money with two objectives: To get a return on their money and a permanent green card. They were sophisticated investors who made a mistake."  To get the green card, an investor of half a million dollars must put the money into something that produces 10 jobs.  NBP never had a workforce commensurate with the EB-5 investments and no jobs were maintained, a condition of earning a visa, so it is unlikely that any of the investors received their green cards.  As for being sophisticated investors, even the most careful investors rely upon accurate information for their investment decisions..  The South Dakota way of doing business is to withhold information and give out misleading information when it is furnished.  If these investors made a mistake, it was not recognizing NBP as an enterprise of fraud with government sponsorship.  It is that same attitude that cheating is fine, make grades or money any way you can.  It's all a competitive game,

There are good people and honest businesses in South Dakota that deliver valuable goods and services to the people at a fair price and make money.  There are many people in South Dakota who believe in and practice fair and equitable treatment of others.  Buy they are not the majority and their values do not influence the level of integrity at which business is done by the dominant culture.  The dominant culture reaches back into feudalism and thinks that business people are the lords of the land, and their employees and customers should bow before them in obedience and gratitude.  The dominant culture is not one that recognizes equal rights and works to extend the benefits of democracy to all people, but thinks in terms of game in which winner takes all.  Therefore, winning is the only consideration.

South Dakota Republicans, like their national cohorts, prefer a restrictive corporate fascism to an equal democratic society.  There is a cultural aspect.  There are those who, as matter of what they consider success, have a need to dominate.  The majority that currently rules South Dakota equates status with bullying and inflicting abuse and damage on those who do not subscribe to their prejudices and sets of bigotries.  This need for domination shows up in the philosophy of business and state government.  Business by stealth, closed government, and  systematic defamation of other people are driving motives of the system that has earned disreputable integrity ratings.

The good people of South Dakota have not found a way to have their equal status and rights acknowledged by that portion of the culture that is so obsessively devoted to domination and bullying.  Democratic voter registrations have  declined.  The perennial outmigration of the young and the talented is relentless.  South Dakota needs improvement.  It can be improved.   But it can only be done when those who insist that it's a great state face up to its faults.  Its stealthy, bullying, oppressive dominators are huge fault.  
It is a fault defined by those integrity indexes.

So, the first matter is to face the faults.  The second is to recognize that those faults are getting worse because no one confronts them aggressively.  The people in Ukraine finally took to the streets.  The officials who had previously dismissed them paid attention.  The people are being listened to because they started acting on their concerns.  If that could happen in South Dakota,  it might be a great state. 

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Aberdeen, South Dakota, United States