Rounds says he didn't approve $600K for beef plant

Former Gov. Mike Rounds says he didn't approve $600,000 in state aid for an Aberdeen beef plant authorized by a cabinet secretary in the final days of his administration -- or even know about it.

Richard Benda, then Secretary of Tourism and State Development, increased a pair of existing loans to the Northern Beef Packers by $600,000 on December 23, 2010, just weeks before leaving office. That increase happened after Benda had already discussed going to work for a private company monitoring Northern Beef's loans.

Benda's signature appears on the loan documents, along with the then-head of the South Dakota Development Corporation -- a nonprofit corporation run by the Governor's Office of Economic Development.

Rounds' signature does not, though he did sign his approval for a separate $1 million grant for the beef plant effective Dec. 8, 2010. That grant reimbursed Northern Beef for documented construction costs.

Rounds is currently the Republican nominee for U.S. Senate, competing against independents Gordon Howie and Larry Pressler and Democrat Rick Weiland.

Asked if Rounds approved the $600,000 loan increase, Rounds campaign spokesman Mitch Krebs said in an email that Rounds "did not sign off on those requests." A Tuesday night Argus Leader story said Rounds had signed off on the loans.

Rounds wasn't aware of the loan increase before he left office, "that he recalls," Krebs said in an email.

Krebs said Rounds had a "booked solid" schedule Wednesday and was unable to talk about the issue to the Argus Leader.

Both Benda and SDDC's board at the time were appointed by Rounds.

Under Rounds' successor, Gov. Dennis Daugaard, the commissioner of economic development routinely approves small grants -- under $100,000. But larger grants usually involve the governor.

"Any grant that was higher, certainly more than $100,000, I think, there would be a conversation between the commissioner and the governor, and maybe others about that," said Tony Venhuizen, Daugaard's communications director.

The loan increases were related to the indictment Benda was facing at the time of his death. He was accused of directing $550,000 from the $1 million grant to pay his own salary. One of the loans to Northern Beef increased by that same amount, $550,000.

Benda's didn't violate South Dakota state law by going to work for a company he had signed contracts with and given aid to as a state employee. Under current law, it's only a crime for a state official to have a financial interest in a contract he or she issues while in office. A legislative committee voted unanimously last month to recommend extending this ban to cover former employees for a year after leaving office.

In a live interview Wednesday on the Argus Leader's "100 Eyes" online show, Daugaard said he's leery about putting so many restrictions on former state officials that it would become hard to recruit people to work for the state. But he said he could be open to a narrowly tailored restriction aimed at officials in Benda's position.

"In that kind of a narrow circumstance where the opportunity for illegal or immoral behavior is clear, I could see prohibiting that," said Daugaard. Daugaard also said he'd be open to requiring more public disclosure from former employees about where they work after leaving state government.

Here's the documents Benda signed to increase grants to the South Dakota Development Corporation, designed to enable SDDC to make loans to Northern Beef: