In a press conference in Sioux Falls today, Democratic leader Rep. Bernie Hunhoff (D-Yankton) identified $329,968 in political contributions to Republicans from corporate directors who received more than $29 million in state grants.
“Even though it’s impossible to determine how much money the state is giving away in the name of economic development, it’s now clear corporate welfare recipients are giving hundreds of thousands right back to Republican leaders in Pierre,” said Hunhoff.
The two-way contributions prove a need for reforms before creating a new large corporate giveaway program with Referred Law 14.
A study conducted by the South Dakota Democratic Party reviewed only the REDI fund between 2007 and 2011 and the futures fund from 2000-2010, two of many economic development programs scattered throughout state departments. Further review was hampered by lack of transparency and open records in state government.
Hunhoff and other legislators have tried to create accountability and transparency for all our economic development programs, but Republican leaders in Pierre have consistently killed bills to prevent pay-to-play and kickbacks with state tax dollars.
Hunhoff said that the Democrats have worked hard to find common ground on economic development issues. The new large projects fund, Referred Law 14, and the new Manpower boondoggle are the only two programs they have opposed. He said the number one argument against the large project fund is that the money comes from the general fund, which supports education and healthcare, at the same time the Governor cut $127 million from the general fund budget and slashed school funding.
“Education is the best form of economic development,” said Hunhoff. “And the governor cut education funding to the bone.”
Hunhoff said this could all have been avoided. “We told the governor’s staff on many occasions that if we found a better funding source, we could compromise on the other objections to the program. But the governor’s staff and the corporate lobbyists refused to compromise,” said Hunhoff. “That’s why it was referred to a vote of the people.”
Hunhoff said that Democrats worked with Republicans on numerous other policies including the expansion of TIFDs, relaxing manufacturer liabilities, preserving tourism funding, road improvements, protecting investments in wind, safeguarding funding for Ellsworth Air Force Base, and developing ethanol in South Dakota.
Now Governor Daugaard wants to expand a budget busting boondoggle without protections against pay to play and kickbacks, said Hunhoff.
“After identifying hundreds of thousands of dollars in suspicious campaign contributions from corporate welfare recipients, it’s easy to see why the public has such low regard for economic development initiatives,” says Hunhoff. “We need to restore the public’s trust in economic development programs before creating new programs.”