Once viewed as a lock for Republicans, the race for the open US Senate seat in South Dakota is now very competitive as corruption allegations plaguing GOP candidate and former Governor Mike Rounds boost the prospects of his challengers, including Democrat Rick Weiland and independent candidates Larry Pressler and Gordon Howie. In particular, Rounds has been dogged by accusations that an EB-5 visa program heavily promoted by his administration violated the law as it provided American visas to wealthy Chinese investors.
Now records reveal that the same state agency that oversaw the controversial visa program also extended taxpayer assistance to companies in which Rounds and his campaign manager, Rob Skjonsberg, are investors. Governor Dennis Daugaard, Rounds’s successor and former running mate, appointed a number of Rounds allies along with Skjonsberg to the board that made the investment decisions.
The relationship between Mike Rounds and Skjonsberg has been very close for over a decade. “My life took a 180-degree turn,” Skjonsberg recalled years ago when remembering the moment Rounds picked the former campaign volunteer to become his chief of staff after winning the gubernatorial election in 2002, calling the experience “one of the greatest opportunities and privileges in my life.” Since then, Skjonsberg’s stock in state politics has been rising, as he has co-founded a political consulting firm, taken on work for Rounds’s insurance company and was picked to serve as campaign manager to lead Rounds’s quest for the open Senate seat this November.
The ties extend into an investment scheme that appears to have violated state ethics guidelines. Records show that an economic-development board overseen by Skjonsberg and other Rounds supporters provided special tax incentives and other state assistance to start-up companies that are part of the portfolio of a boutique investment firm called Lake Sharpe Investments. Lake Sharpe, which is run by Skjonsberg, counts Rounds as a personal investor to the project, according to documents obtained by The Nation.
In January of 2013, Skjonsberg was appointed by current Governor Daugaard to the South Dakota Board of Economic Development, a department within the Office of Economic Development tasked with promoting economic growth through loans, tax credits and other programs to boost local businesses. Six months prior to the appointment, Skjonsberg formed Lake Sharpe Investments, a company in which Rounds holds a position and an investor.
Lake Sharpe, through a private equity firm called Nordic Venture Partners, holds a number of investments in start-up companies, including an electronics fashion company. Two of the firm’s investments are in South Dakota: Novita LLC, a start-up developing corn-oil technology and Design Tanks, a firm that manufactures fiber-glass storage tanks for the gas and agriculture industry. Skojnsberg is reportedly an expert in crop-fuel technology. He previously served as a lobbyist for POET, one of the state’s largest ethanol producers, and as a founding board member of Growth Energy, a trade association for the ethanol industry.