U.S. Attorney, Blessed by Obama AND Trump, Squashes EB-5 Indictments

By David North, April 17, 2017

This is a story about how one wily South Dakota politician managed to be appointed to (and retained in) office by both the Obama and the Trump administrations, all within a period of less than 18 months, while protecting the embattled EB-5 (immigrant investor) program from a series of criminal indictments and nasty headlines.

The direct beneficiaries of all this are a group of local EB-5 middlemen and their far-flung cronies, while the indirect beneficiaries are the big city (Manhattan, Los Angeles, and Dallas) real estate developers who secure most of the profits from the ongoing EB-5 program. The latter's wallets would suffer were the main part of the EB-5 program not to be renewed by Congress before its April 28 sunset.

There were also obscure and distant winners from the lack of indictments stemming from these EB-5 scandals — appreciating the lack of publicity, presumably, is a Russian railroad oligarch, and various known and unknown actors in these current or former bits of the British Empire: the Cayman Islands, Cyprus, Hong Kong, and the British Virgin Islands. Who knew that this prairie state could secure so much attention from such exotic places! Places, it should be noted, that are known for their money laundering.

It is a largely untold story of the loss of scores, if not hundreds, of millions of EB-5 dollars, including the massive bankruptcy of a large beef slaughterhouse in Aberdeen and assorted other project failures. Some Washington or New York journalists should get their teeth into this story, but none have as yet.

Nationwide, EB-5 has been a loosely administered federal immigration program in which an investor can secure a family-sized set of green cards by placing a half-million-dollar stake in an investment approved by, but not guaranteed by, the Department of Homeland Security. The Obama administration liked and promoted the program.

On center stage in this EB-5 story is our non-hero, the U.S. attorney (i.e., federal prosecutor) for South Dakota, Randolph J. Seiler. Seiler, until recently a career federal employee, was a bystander, a supporting actor, and then the (dark) star in the following chronology.

Early 2013. The U.S. attorney for the state was Brendan Johnson, son of then-Senator Tim Johnson (D-S.D.). Seiler, a long-time employee of that office was the chief deputy U.S. attorney. The Johnson/Seiler office never (at least publicly) showed any interest in the then-ongoing, complex, and serious EB-5 scandals rocking the state, despite the fact that they were closely tied to the administration of Governor Mike Rounds (R), as CIS reported at the time.

October 20, 2013. Richard Benda, until a year earlier the cabinet officer in the Rounds administration in charge of EB-5, and at the time in a well-paid, EB-5-funded job, died of a shotgun wound to the stomach. The state's attorney general, Marty Jackley (R) ruled it a suicide and refused to make public the detailed autopsy, on the grounds that Benda's estranged wife had objected. Jackley later said that Benda was on the verge of being indicted on the day of his death, but offered no details.

Fall 2014. The Democratic candidate for senator from the state, Rick Weiland, seeking to replace the retiring Sen. Johnson, and running against former Governor Rounds, utterly failed to make good political use of the EB-5 issue and wasted energy attacking U.S. Senate Minority Leader Harry Reid (D-Nev.). Rounds won the race.

February 18, 2015. Brendan Johnson resigns from his post and Seiler becomes the acting U.S. attorney; the press reports that Seiler is openly seeking the position. The general understanding is that he will not get the job if he offends either the White House or the state's two GOP Senators, all supporters of EB-5.

June 1, 2015. Seiler reviews an FBI report on the EB-5 scandal, refuses to make any part of it public, and decides that no indictments are warranted. While we outsiders cannot know what was in the FBI document, even if it only included information published by the media it would seem to this non-lawyer — and to many in the state's media — that indictments were clearly in order. Many EB-5 players heave a big sigh of relief.

October 8, 2015. President Obama nominates Seiler for the U.S. attorney's position. The appointment is subsequently confirmed by the U.S. Senate.

March 10, 2017. President Trump announces that he is firing 46 U.S. attorneys, but Seiler is not one of them. Seiler may be re-appointed, or replaced, in the future, but for the moment this skillful player remains in charge and on the payroll, and the state's EB-5 scandals remain untouched by his office.

How somewhat similar EB-5 scandals were treated rather differently in Vermont was the subject of an earlier blog.