Noem signs ban on “evil foreign government” contracts

March 23, 2023

SIOUX FALLS — With a fighter jet in the background, Governor Kristi Noem conducted a bill-signing ceremony Wednesday in a military hangar where she celebrated efforts to mitigate the influence of what she called “evil foreign governments.”

“I’ll do everything in my power that I can to ensure that our people stay as free as possible,” Noem said. “We have threats to that freedom on the horizon.”

Later, under questioning from reporters, Noem acknowledged ways in which the state’s approach to adversarial foreign powers is lacking or still under evaluation.

Joshua Haiar with South Dakota Searchlight ( reports the ceremony was at the South Dakota Air National Guard’s 114th Fighter Wing at Joe Foss Field. Noem signed a bill into law that prohibits purchasing agents for the state and local governments from contracting with companies owned or controlled by Russia, Iran, North Korea, Venezuela, Cuba and China. The bill puts into law an executive order that Noem issued previously.

The governor said the new law is part of a broader effort. She referenced her executive order banning the Chinese TikTok app on state devices, a new law requiring foreign companies with agricultural land in South Dakota to disclose information to the state, and her failed legislation to create a board to vet foreign purchases of agricultural land.

In response to a South Dakota Searchlight question about her push for a vetting board, Noem said Wednesday, “The problem with the current state statute in regards to foreign-owned ag land is there is no reporting requirement and there is no enforcement mechanism, which is what we were trying to address with legislation.”

Actually, there is a reporting requirement in federal law and an enforcement mechanism in state law — details that have seemingly been overlooked in South Dakota’s debate over foreign-owned ag land.

State laws passed in 1979 prohibit foreign people and governments from owning more than 160 acres of agricultural land, with exceptions for land that’s inherited, land covered by treaties, and land held by foreigners who have residency in the United States.

Those laws say the state Department of Agriculture and Natural Resources must monitor the reports of foreign ownership of ag land in South Dakota. The reports are produced by the U.S. Department of Agriculture, as required by the federal Agricultural Foreign Investment Disclosure Act of 1978.

The state laws further require the Department of Agriculture and Natural Resources to gather any indications of illegality revealed by the reports, and then to refer that information to the state attorney general for an investigation and potential legal action to force the forfeiture of any illegally owned land.

South Dakota Searchlight asked state officials on Feb. 23 whether they monitor the reports from the USDA, whether state officials refer any instances of non-compliance with the 160-acre rule to the attorney general, and whether the attorney general investigates and takes action against illegal land holdings. Representatives of the Department of Agriculture and Natural Resources and the Attorney General’s Office acknowledged the questions and said they were seeking answers, but have not provided answers.

Another area of foreign influence in South Dakota is the state’s trust industry.

The Pandora Papers, a leak of financial documents that made headlines beginning in 2021, revealed that South Dakota is a hub for wealthy individuals and families who want to establish trusts.

The documents showed that South Dakota’s trust industry, which allows individuals to shield their wealth and avoid taxes, has attracted clients from around the world, including a Colombian money launderer, a sugar cane magnate from the Dominican Republic accused of human rights abuses, and Ecuadorian brothers guilty of embezzlement.

South Dakota Searchlight asked Noem what her administration and the Legislature are doing to ensure the state is not aiding criminal or corrupt foreigners in offshoring their assets into a South Dakota trust.

“A lot of the discussion around the release of those papers had to do with people’s personal, financial information,” Noem said. “We’re continuing to always evaluate if there is something the state needs to do to take action, and that’s something that I’ll continue to make a priority as well.”