If you show me your EB-5, I'll show you mine

How business gets done in South Dakota.

Bob Mercer has a lengthy article in Sunday's Aberdeen American News tracking the EB-5 investments and loans in South Dakota under the auspices of the Governor's Office of Economic Development and its one-time designated agency, the South Dakota Regional Center.  Mercer reports the information as  coming from a "brain-spinning set of records."  He carefully notes: "The version of the report that was obtained as a public record from GOED had much of the information removed because that information dealt with specific individual investors. Most of the dates also were removed."

A previous report in the Beacon deals with how the systemic corruption through which South Dakota state government operates is hidden under a blanket of secrecy, enforced by state laws and rules.  The rules that govern access to the records that Bob Mercer examined are a case in point.  You begin with the statement in the codified laws that give the people the right to see what the government they elect and pay for is doing:

Except as otherwise expressly provided by statute, all citizens of this state, and all other persons interested in the examination of the public records, as defined in § 1-27-1.1, are hereby fully empowered and authorized to examine such public record, and make memoranda and abstracts therefrom...(SDCL 1-27-1)

That first clause "Except as otherwise expressly provided by statute" signals that there are a lot of records that you, the people, just ain't going to get. 

The set of records that Bob Mercer accessed has its own basis for denial among that its expressly covered by statute:

Any documentary material or data made or received by the Board of Economic Development or Governor's Office of Economic Development for the purpose of furnishing assistance to a business, to the extent that such material or data consists of trade secrets or commercial or financial information regarding the operation of such business, may not be considered public records, and is exempt from disclosure... SDCL-16G-11.

Sorry, folks, but when the state and its cronies collude on some scheme,  you have no right to know what is going on.  The fact is that whether the state is involved in economic development, environmental and business regulation, justice, or much of anything else, you will find a statute that provides a way to keep you from getting that information.  In the case of the story Bob Mercer compiled, names and dates were withheld. 

The state legal code is riddled with exceptions that deny access to information.  This will not make exciting reading unless you tend to get pissed off over being bilked and played for a foot, but the first set of statutes that limit your right to know what the state government is doing occurs right after the one that purports to give you freedom to find out:

1-27-1.5. Certain records not open to inspection and copying. The following records are not subject to §§ 1-27-1, 1-27-1.1, and 1-27-1.3:

(1) Personal information in records regarding any student, prospective student, or former student of any educational institution if such records are maintained by and in the possession of a public entity, other than routine directory information specified and made public consistent with 20 U. S.C. 1232g, as such section existed on January 1, 2009;

(2) Medical records, including all records of drug or alcohol testing, treatment, or counseling, other than records of births and deaths. This law in no way abrogates or changes existing state and federal law pertaining to birth and death records;

(3) Trade secrets, the specific details of bona fide research, applied research, or scholarly or creative artistic projects being conducted at a school, postsecondary institution or laboratory funded in whole or in part by the state, and other proprietary or commercial information which if released would infringe intellectual property rights, give advantage to business competitors, or serve no material public purpose;

(4) Records which consist of attorney work product or which are subject to any privilege recognized in chapter 19-13;

(5) Records developed or received by law enforcement agencies and other public bodies charged with duties of investigation or examination of persons, institutions, or businesses, if the records constitute a part of the examination, investigation, intelligence information, citizen complaints or inquiries, informant identification, or strategic or tactical information used in law enforcement training. However, this subdivision does not apply to records so developed or received relating to the presence of and amount or concentration of alcohol or drugs in any body fluid of any person, and this subdivision does not apply to a 911 recording or a transcript of a 911 recording, if the agency or a court determines that the public interest in disclosure outweighs the interest in nondisclosure. This law in no way abrogates or changes §§ 23-5-7 and 23-5-11 or testimonial privileges applying to the use of information from confidential informants;

(6) Appraisals or appraisal information and negotiation records concerning the purchase or sale, by a public body, of any interest in real or personal property;

(7) Personnel information other than salaries and routine directory information. However, this subdivision does not apply to the public inspection or copying of any current or prior contract with any public employee and any related document that specifies the consideration to be paid to the employee;

(8) Information solely pertaining to protection of the security of public or private property and persons on or within public or private property, such as specific, unique vulnerability assessments or specific, unique response plans, either of which is intended to prevent or mitigate criminal acts, emergency management or response, or public safety, the public disclosure of which would create a substantial likelihood of endangering public safety or property; computer or communications network schema, passwords, and user identification names; guard schedules; lock combinations; or any blueprints, building plans, or infrastructure records regarding any building or facility that expose or create vulnerability through disclosure of the location, configuration, or security of critical systems;

(9) The security standards, procedures, policies, plans, specifications, diagrams, access lists, and other security-related records of the Gaming Commission and those persons or entities with which the commission has entered into contractual relationships. Nothing in this subdivision allows the commission to withhold from the public any information relating to amounts paid persons or entities with which the commission has entered into contractual relationships, amounts of prizes paid, the name of the prize winner, and the municipality, or county where the prize winner resides;

　

(10) Personally identified private citizen account payment information, credit information on others supplied in confidence, and customer lists;

(11) Records or portions of records kept by a publicly funded library which, when examined with or without other records, reveal the identity of any library patron using the library's materials or services;

(12) Correspondence, memoranda, calendars or logs of appointments, working papers, and records of telephone calls of public officials or employees;

(13) Records or portions of records kept by public bodies which would reveal the location, character, or ownership of any known archaeological, historical, or paleontological site in South Dakota if necessary to protect the site from a reasonably held fear of theft, vandalism, or trespass. This subdivision does not apply to the release of information for the purpose of scholarly research, examination by other public bodies for the protection of the resource or by recognized tribes, or the federal Native American Graves Protection and Repatriation Act;

(14) Records or portions of records kept by public bodies which maintain collections of archeological, historical, or paleontological significance which nongovernmental donors have requested to remain closed or which reveal the names and addresses of donors of such articles of archaeological, historical, or paleontological significance unless the donor approves disclosure, except as the records or portions thereof may be needed to carry out the purposes of the federal Native American Graves Protection and Repatriation Act and the Archeological Resources Protection Act;

(15) Employment applications and related materials, except for applications and related materials submitted by individuals hired into executive or policymaking positions of any public body;

(16) Social security numbers; credit card, charge card, or debit card numbers and expiration dates; passport numbers, driver license numbers; or other personally identifying numbers or codes; and financial account numbers supplied to state and local governments by citizens or held by state and local governments regarding employees or contractors;

(17) Any emergency or disaster response plans or protocols, safety or security audits or reviews, or lists of emergency or disaster response personnel or material; any location or listing of weapons or ammunition; nuclear, chemical, or biological agents; or other military or law enforcement equipment or personnel;

(18) Any test questions, scoring keys, results, or other examination data for any examination to obtain licensure, employment, promotion or reclassification, or academic credit;

(19) Personal correspondence, memoranda, notes, calendars or appointment logs, or other personal records or documents of any public official or employee;

(20) Any document declared closed or confidential by court order, contract, or stipulation of the parties to any civil or criminal action or proceeding;

(21) Any list of names or other personally identifying data of occupants of camping or lodging facilities from the Department of Game, Fish and Parks;

(22) Records which, if disclosed, would constitute an unreasonable release of personal information;

(23) Records which, if released, could endanger the life or safety of any person;

(24) Internal agency record or information received by agencies that are not required to be filed with such agencies, if the records do not constitute final statistical or factual tabulations, final instructions to staff that affect the public, or final agency policy or determinations, or any completed state or federal audit and if the information is not otherwise public under other state law, including chapter 15-15A and § 1-26-21;

(25) Records of individual children regarding commitment to the Department of Corrections pursuant to chapters 26-8B and 26-8C;

　

(26) Records regarding inmate disciplinary matters pursuant to § 1-15-20; and

(27) Any other record made closed or confidential by state or federal statute or rule or as necessary to participate in federal programs and benefits.

Source: SL 2009, ch 10, § 6; SL 2012, ch 11, § 1.

And that's just for starters.  No doubt, some of the restrictions are legitimate in certain circumstances, but if some official just doesn't want you to have information, it does not take a great deal of smarts to construe one of those statutes into a denial. 

So that you may never know how Richard Benda was shot, the Attorney General has an entire legal code that he can use to keep you from knowing.

County and city officials can, likewise, cover up and bury things going on their jurisdictions with the state legal code and some their own governments dream up.

But this is the kind of government the people want.  And they've got it.

They call corruption "economic development."

South Dakota's business climate is often rated as number one, and that may well be because it is the most corrupt. 

It is a state that raves about free enterprise, but free enterprise is interpreted as being free to screw customers and bilk taxpayers.  The Governor's Office of Economic Development is undergoing investigation which appears to lead to many avenues of perfidious connivance, actually dark and seamy alleys of larcenous enterprise. The now-defunct Northern Beef Packers plant in Aberdeen seems to be at the center of the investigations, but its relationships with state and local government-sponsored organizations are typical of other situations in which the government has been involved in providing special and secret advantages for business operations, few of which have the trappings of open and honest dealings.   

A majority of people in South Dakota accept under-the-table and behind-closed-door transactions as business as usual.  For years, South Dakota has striven mightily to be at the bottom of the Better Government Association's Integrity Index for state governments.  Many times, it has succeeded.  In the latest Index, it is ranked 47. 

State officials have discretion about making sensitive records secret.  When records do not have to be made available to the public and there are no sunshine laws requiring them to be produced at some point, officials have no need to conduct themselves forthrightly and above board.  So, they don't.



The right to do business in clandestine and prejudicial ways has even been written into state law.  An example is when Dick Butler, a Democrat, was state treasurer from 1995-2002.  When Butler took office, he instituted a number of reforms.  This spurred  the Janklow administration to campaign to cut Butler off from access to information on state financial matters and to restrict his authority in exercising the office of treasurer.  The Lakota-Dakota-Nakota Coalition, which has a full account of Butler's work, recounts, "The Commissioner of Banking in South Dakota, Richard Duncan, wrote a memo to all state banks in South Dakota advising them not to give information to Butler regarding executive accounts, and a bill was proposed that was intended to strip the State Treasurer of his banking authority for colleges and universities."


In 1996, Governor Janklow initiated a gag law that would restrict Butler's activities.  The law selectively closed  corporate records and prohibited state officials from disclosing information on investigations into the actions of corporations, even the fact that such an investigation was taking place.  Janklow's chief henchman in shepherding the law through the legislature was then Senate Majority Leader Mike Rounds.  The law has since been revised, after a number of challenges pointed out that it violated every aspect of a democracy.   

As Governor, Mike Rounds was involved in the beef plant scheme when it was first advanced in Huron under the Ridgeway Farms schemers, then floundered and went to Flandreau, where it seemed to die until it popped up again in Aberdeen. 

Even where information is available, the press has not tracked the state's involvement in economic development.   One thing it could have done and can do is track the number of enterprises to which the state has contributed money and adjusted rules and regulations and kept an account of how many such enterprises succeeded, fulfilled expectations to some degree, or failed. 

The only place any account of Dick Butler's tenure as state treasurer appears is at the Lakota-Dakota-Nakota Coalition, which is largely based upon reporting from the Lakota Journal.

State government is corrupt. The record is long and detailed, as the Coalition points out.   It gets lots and lots of help.