Indie Shocker in South Dakota: GOP Shot at Senate Seat in Trouble

He has no outside money, virtually no staff, and, until a few weeks ago, he had no chance.

But thanks to political scandal the likes of which South Dakota has never seen, former Republican U.S. Sen. Larry Pressler, independent candidate for his old seat, has surged to within a few points of the Republican frontrunner, former Gov. Mike Rounds.

When he announced his run two years ago, the popular former governor was considered unbeatable by most South Dakota political insiders.

But a scandal over his administration’s handling of the EB-5 visa foreign investment program has resulted in a drop in points by seemingly a thousand allegations.

Meanwhile, Rounds’ Democratic challenger, former Sen. Tom Daschle acolyte Rick Weiland, has also seen his support eroded by Pressler.

Recent polling by SurveyUSA shows a statistical dead heat between the well-funded but wounded Rounds at 35 percent and Pressler at 32 percent. Meanwhile, Weiland, who’s visited all 317 towns in South Dakota at least once and has seen third-party support from Every Voice Action, MayDay PAC and, finally, the Democratic Senatorial Campaign Committee, still trails Rounds—or Pressler—by a few points to over 10 points, depending on the polling you believe.

Even former Republican, current tea partier and independent Gordon Howie’s 3 to 5 percent takes precious conservative Republican support away from Rounds.

Pressler’s surge has been in the making for the past two months, with polling from SurveyUSA and Nielson Brothers Polling, a South Dakota firm, showing support shifting from both Rounds and Weiland to Pressler. Pressler polls equally well among Democrats, Republicans and independents and also does well in the 50-64 age group.

For Rounds, he has watched his once high-teens lead and over 50 percent majority evaporate to a lead by the margin of error and a 35 percent plurality while details about his role in the EB-5 scandal dribble out on nearly a daily basis.

The South Dakota news media, not known for its aggressive reporting, has been uncharacteristically relentless on the EB-5 story since the alleged suicide of Rounds’ former secretary of Tourism and Economic Development, Richard Benda. Benda was once thought to be the major player in the scandal, which also resulted in the closing of the Northern Beef Packers plant in Aberdeen not long after it opened. Now Benda is considered only one of a variety of Rounds associates or Republican insiders embroiled in the mess.

What started as an unusual death last October—Benda used a stick to pull the trigger and fire his shotgun into his stomach—has exploded. Benda was accused of double-billed travel and accused that he used or had his new employer--NBP--use state money to give him a “golden parachute” from state government in trade for favors. There have been several state investigations of low to medium intensity into the matter—and a possible federal investigation by U.S. Attorney Brendan Johnson, current Democratic U.S. Sen. Tim Johnson’s son, remains as an “October surprise.”

As the months passed from last fall, the EB-5 scandal turned into a broader inquiry of insider dealing that privatized South Dakota’s EB-5 program under suspicious circumstances. It also may have cost the state over a hundred million dollars in lost fees from the green cards-for-investments program.

Rounds’ answers to questions posed by the media and a legislative committee investigating the matter have been unsatisfactory and sometimes even wrong, causing him to retract statements in the face of new evidence.

South Dakota Democrats have tried to make EB-5 their “silver bullet” in both the U.S. Senate and governor races. Democratic gubernatorial candidate Susan Wismer, a state representative and an accountant who serves on the committee investigating the EB-5 matter, has done most of the heavy political and legislative lifting in keeping attention on EB-5.

Her nitty-gritty efforts have not helped her own run against incumbent Republican Dennis Daugaard, who leads her by 28 points in recent polling. Dem Senate candidate Weiland has spoken more generally about Rounds and the EB-5 scandal, including spots erroneously calling EB-5 “citizenship for auction.”

But it has been Wismer, who sometimes seems to be a reluctant candidate, who largely has kept the issue in the public eye, as well as the state Democratic Party.

The beneficiary of these efforts, however, so far, has been Pressler.

The once boyish-looking, now grandfatherly appearing Pressler has added his voice to the “pile on Mike re EB-5” chorus but largely has avoided specifics.

His advertising shows him with both Presidents Clinton and Reagan; he pledges to serve only one term and he notes his 18 years of Senate and four years of House seniority as important in his ability to serve South Dakota. He’s also said he’ll caucus with whichever party gives South Dakota—and presumably, him—the best deal.

Pressler, who has run a largely issues- and solutions-based campaign, has become the South Dakota Senate race’s “none of the above.”

Which is ironic.

In 2002, Rounds, then the state Senate majority leader, was “none of the above” in the Republican primary for governor.

In that race, former, then current attorney general—now state circuit court judge--Mark Barnett and former lieutenant governor and venture capitalist Steve Kirby were both much better funded and better known than Rounds. The two of them also engaged in one of the most vitriolic primaries in South Dakota history, with nasty ads about Kirby ‘s investments keeping burn victims from needed skin grafts and Kirby throwing back hard accusations of his own against fellow Republican Barnett.

It is important to note that South Dakota is a large landmass with fewer than a million people. It is Midwestern small town “nice” writ large—and it worked for Rounds.

Meanwhile, the insurance executive—given the sobriquet “Smilin’ Mike” in his state senate days-- literally smiled his way to victory, taking a sunny, Reaganesque approach to his campaigning and TV ads.

He won the three-way primary then went on to an easy victory and two terms as South Dakota’s chief executive.

Fast-forward to 2014 and the Republican U.S. Senate primary.

Rounds emerged from the five-person race—one of the craziest in South Dakota history—with only 55 percent against two state legislators and two political novices. But the EB-5 scandal dogged him, particularly because of Rep. Stace Nelson, a 6-7 ex-Marine and NCIS investigator who wasn’t afraid to tell Rounds to his face at their few debates and joint appearances that he thought Rounds was a “crony capitalist” who gave state contracts to his friends. Nelson also liked to toss around the notion that Rounds was tainted by “Communist Red Chinese” money that came into the state via the EB-5 program.

Pressler largely stayed above the fray while the Republicans beat up on Rounds and Weiland toured all over the state, sometimes stopping to even play his guitar.

Now Pressler, who has been taking a page from the Rounds and Reagan books, finds himself under attack from Rounds, Weiland and outside groups.

Republican operatives recently circulated a Politico story to South Dakota reporters that said Pressler and his wife and chief campaigner, Harriet, took a tax deduction on their Washington, D.C. home and thus, claimed Pressler was “a D.C. resident.”

In Daschle’s defeat by John Thune in 2004, the Republicans ran a similar TV ad to devastating effect against Daschle, who was then the U.S. Senate majority leader.

The Democrats have tried to remind voters that at the end of his career in 1996, Pressler had taken a hard turn to the right and wanted to “kill Big Bird” and defund public broadcasting. Despite Senate Majority Leader Harry Reid’s dislike of Weiland as a candidate, the DSCC is now cutting loose with close to a million dollars in advertising on the Democrat’s behalf.

That Pressler has gotten this far on so little is remarkable. Whether he can continue his surge, keep his support while he has a target on him, all the while not having an Election Day GOTV program of consequence is yet to be seen.

But this hasn’t been a typical election cycle in South Dakota this year either. It’s been one filled with expecting the unexpected from candidates. A Republican-turned-Obama supporter-turned independent with nothing more than two nickels and a TicTac to rub together in his pocket winning a seat he lost 18 years ago isn’t any more far-fetched than what’s already transpired in the Mount Rushmore State.