Business Visa Scandal Embroils South Dakota Senate Race

By MARK ANDERSON

While four candidates make for an interesting Senate race, a pre-election subject that arose in South Dakota transcends whatever the Nov. 4 election outcome may have been.

As October gave way to November, the South Dakota competition for the Senate seat of Democrat Tim Johnson, who stepped down, was highlighted by controversy surrounding the little-known EB-5 visa program. For the record, Johnson’s departure created a four-man race that included not one but two “independent” candidates: Larry Pressler and Gordon Howie.

Pressler’s a former Republican congressman whose political career goes back some 40 years. And former South Dakota state lawmaker Howie was, until recently, a Republican.

Those two faced Democrat Rick Weiland and Republican Mike Rounds — a former South Dakota governor whose past has been checkered by EB-5.

EB-5 is a federal program that allows foreigners to receive a permanent visa to live in the US — if the applicant invests at least $500,000 dollars for the creation or preservation of “at least” 10 jobs. Not 100 jobs, mind you, nor even 50 — just a minimum of 10. And the jobs can even be “indirectly” created, whatever that means. Furthermore, permanent visas can be extended to the recipient’s family members.

The controversy surrounding EB-5 made the race for South Dakota’s open Senate seat all-the-more competitive and interesting, as corruption allegations which have plagued Mr. Rounds made sizable headlines.

According to the Rapid City (S.D.) Journal, Rounds has been dogged by accusations that the EB-5 visa program, heavily promoted when he was governor, violated the law by providing American visas to wealthy Chinese investors. And according to The Nation magazine, records reveal that the same South Dakota state agency which oversaw EB-5 also extended taxpayer “assistance” to companies into which Rounds and his campaign manager, Rob Skjonsberg, had made investments. The magazine noted: “Governor Dennis Daugaard, Rounds’s successor and former running mate, appointed a number of Rounds’ allies ... to the board that made the investment decisions.”

In an Oct. 23 televised debate featuring all four Senate candidates, Mr. Howie pressed Rounds on the EB-5 scandal, focusing on how the issue played out when Rounds was governor. Howie told Rounds: “I just want to say that Gov. Rounds, you brought this on yourself.”

But beyond politics, EB-5 is arguably a strange beast. In Michigan, official sources say that under EB-5: “Investments of $500,000 to $1 million that create at least 10 full-time jobs ... can lead to permanent legal residency.”

Michigan’s “investment options” for those seeking US residency in this manner include everything from “real estate,” to “state government development programs,” to “supporting local businesses.”

Granted, EB-5 may seem better than illegal aliens skirting the border and being illegally hired by unscrupulous meat-packing factories, in construction or in other areas where their presence can, and sometimes does, drive down domestic wages.

But EB-5’s design suggests US residency is for sale. Is permanent residency and possible citizenship earned simply by plunking down big bucks and making vague job-creation promises?

While South Dakota, Michigan and other states perhaps cannot be faulted for seeking job-creation in general, EB-5 looks like a complicated, distasteful way of getting there—especially when EB-5 invites corruption, as in South Dakota.

A strong alternative, among several, would be reinstituting reasonable tariffs. These import taxes, levied at the water’s edge and applied to slave-labor imports, would curb the outsourcing of gainful, well-paying US jobs by creating an incentive for US-based companies to make their goods in the US.

By making their wares in the US, they’d avoid the tariff. Why would any sane US-domiciled company farm out labor to the cheapest-possible distant workers to save money, if, upon shipping those slave-made goods back into the US marketplace, a tariff was applied to cancel the profit margin created by the cheap labor?

Plus, tariffs would create a steady revenue stream and enable government to lighten the domestic tax load for small US businesses — as they’re the ones who create most of the jobs anyway.

So, perhaps we don’t need foreigners buying their way into America on assurances of creating jobs — when we can assuredly create our own.

EB-5 springs from the mindset that economic progress can be gauged only on a material basis — that money and job creation are ends in themselves, and not means to a greater social good.

Historically, we’ve been pinched between hyper-libertarianism (monopoly capitalism) and Marxist communism, even though both of those extremes, with rare exceptions, are pro-free trade and anti-tariff. The populist way applies a tariff at America’s gateway to build necessary and gainful jobs through a sensible, organic national policy, rather than accepting what amount to foreign bribes adjoined to thin promises.

Mark Anderson is a veteran journalist who divides his time between Texas and Michigan. Email him at truthhound2@yahoo.com.

From The Progressive Populist, December 1, 2014