By Jason Ferguson
While the recent scandals involving two government programs—EB-5 and South Dakota Gear Up—were a black eye on the state and cause for concern, two of South Dakota’s District 30 legislators say the scandals were simply the results of state employees who were underhanded and should not result in an overall condemnation of current or former administrations in Pierre.
“You can speculate all you want, but until facts come out and something can be proven to the contrary, I have complete confidence in our governor and attorney general,” Rep. Mike Verchio said. “I think we are a very trusting people in this state and we believe you until you prove you have been lying to us.”
EB-5
The EB-5 Immigrant Investor Program is administered by the U.S. Citizenship and Immigration Services (USCIS). Under the program, entrepreneurs (and their spouses and unmarried children under 21) are eligible to apply for a green card (permanent residence) if they:
• Make the necessary investment in a commercial enterprise in the United States; and
• Plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.
This program is known as EB-5 for the name of the employment-based fifth preference visa that participants receive.
Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. In 1992, Congress created the Immigrant Investor Program, also known as the Regional Center Program. This sets aside EB-5 visas for participants who invest in commercial enterprises associated with regional centers approved by USCIS based on proposals for promoting economic growth.
Former state Secretary of Tourism & State Development Richard Benda died by suicide while awaiting indictment for embezzlement for allegedly stealing money from a state grant used for the program.
According to an article in the Sioux Falls Argus-Leader, under the EB-5 loan model, for example, a project might seek $25 million in funding. Fifty foreigners would be recruited to invest $500,000 each in a specially created company, which would in turn loan $25 million at a low interest rate to the project. The project would pay off that loan over a period of time, such as five years.
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