Rounds belongs to private investment club that owns 10 Midwestern hotels, disclosure shows

U.S. Sen. Mike Rounds of South Dakota has disclosed that a portion of his personal assets is held in a private investment club that owns hotel properties throughout the Midwest, including in Iowa.

Rounds tops the list for minimum net worth among members of the South Dakota congressional delegation, a review of lawmakers’ current financial disclosure statements shows.

Part of Rounds’ wealth is invested in funds managed by Bird Dog Equity Partners, a private corporation based in Sioux Falls that invests in and manages hotel properties in the Midwest. The group also makes some private equity investments, according to its website.

Rounds, a Republican member of the Senate Banking Committee, is invested in two funds through the group, financial disclosure statements show. Through the funds, Rounds is a part owner of 10 hotels in Nebraska, North Dakota, Iowa, Wisconsin and Minnesota.

The value of his stakes is between $361,000 and $815,000, a portion of his estimated $4.4 million minimum net worth, according to his financial disclosure statement.

Belonging to a private investment club — a group of friends, neighbors, business associates, or others who pool their money to invest — is allowed under U.S. Senate ethics guidelines. In a written statement, Rounds spokesman Dezmond Ward emphasized professional fund managers made decisions about the funds’ investments.

“Bird Dog Equity Partners is a private equity firm led by dedicated fund managers that invest in business and hospitality investments across the Midwest,” Ward wrote. “Bird Dog is a South Dakota company based in Sioux Falls. The firm’s investments and fund managers are publicized on their website. All decisions concerning the firm and its operations are made by the fund managers. Senator Rounds does not have a role in any decision making for the firm. His investment shares have all been reviewed annually by the Senate Ethics Committee and reported in his annual public financial disclosure reports.”

Mere membership in such a group is unlikely to cause any conflict of interest, said Delaney Marsco, senior legal counsel for ethics at the Washington, D.C.-based government watchdog group Campaign Legal Center.

Members of Congress are subject to relatively little regulation about what types of investment they can hold and for how long. The disclosure of individual assets is an important tool for transparency, Marsco said.

Required disclosures

The personal financial disclosure statements required of members of Congress and filed annually in May allow for relatively vague accounting.

Rather than providing an exact value of their assets, filers are only required to provide a range of value. For example, a savings account might be listed as being worth $500,001 to $1 million, or an investment account could show a value of $1,001 to $15,000.

Calculating only the minimum value of each asset, U.S. Rep. Dusty Johnson, the state’s lone U.S. House member, reported assets worth at least $3.2 million. Sen. John Thune reported by far the lowest value of assets in the three-member delegation, with at least $364,000. Both are Republicans.

Thune’s Democratic challenger, retired Navy and Air Force officer Brian Bengs, reported at least $1.3 million in assets.

Candidates are also required to submit financial disclosures if they have raised or spent more than $5,000 on their campaign.

Johnson does not have a Democratic opponent in his reelection race. Collin Duprel, who won the Libertarian Party’s nomination in the race, has not filed financial disclosure forms or Federal Election Commission paperwork that would show if he has met the $5,000 trigger for financial disclosure.

Rounds is not up for reelection this year.

Hotel stakes

Rounds’ disclosure report lists stakes in hotels in Chadron and Valentine, Nebraska; Oskaloosa, Iowa; Madison, Wisconsin; Bismarck, North Dakota; one each in Marshall and Shoreview, Minnesota; and two in New Ulm, Minnesota.

Bird Dog’s website lists the following hotels as part of the group’s portfolio:

• Best Western in Chadron
• EverSpring Inn and Suites in Oskaloosa
• Holiday Inn Express in Cedar Rapids, Iowa
• Best Western in Madison
• EverSpring Inn and Suites in Bismarck
• EverSpring Inn and Suites in Marshall
• Harmony Inn, Comfort Inn, The Niobrara Lodge and a golf resort called The Prairie Club in Valentine, Nebraska. It is unclear which of these Rounds partially owns.
• Best Western Plus in Shoreview
• Harmony Inn and Best Western Plus in New Ulm

A marketing officer for Bird Dog did not return an email Friday asking for additional information about the investment clubs.

“Bird Dog Hospitality Fund is probably, as a fund, not going to raise a conflict of interest,” Marsco, the ethics lawyer, said. “But there might be individual assets under that that do raise a conflict, or at the very least, voters have a right to know what exactly is someone invested in.”

Some campaign contributions were made to Rounds by members of the equity fund. Federal Elections Commission records show three Bird Dog partners made 11 contributions totaling $6,850 to Rounds’ campaigns from 2013 to 2020.

Rounds’ financial disclosure form showed his largest asset was not the funds — it was a Lyman County farm worth between $1 million and $5 million.

Thune, Johnson and Bengs

Most of Thune’s and Johnson’s assets are in mutual funds, according to their disclosures.

Thune listed two joint accounts with investments of between $100,001 and $250,000.

Thune also owns between $1,001 and $15,000 in stock of CHS, Inc., a Minnesota-based agriculture company.

He will begin receiving South Dakota retirement benefits in 2026, according to the disclosure form. Thune was a state employee as state railroad director from 1991 to 1993.

Johnson’s most valuable assets are between $250,001 and $500,000. He reported four mutual fund accounts and an individual retirement account with investments in that range.

Each of the mutual funds earned him between $15,001 and $50,000 in 2021, according to the disclosure.

Johnson listed $100,001 to $250,000 from the state retirement system. Johnson sat on the Public Utilities Commission from 2004 to 2011 and was Gov. Dennis Daugaard’s chief of staff from 2011 to 2014.

Bengs listed a mutual fund account worth between $500,001 and $1 million.

He reported owning several individual stocks, including heavily regulated companies such as Pfizer, ExxonMobil and AT&T. All his stocks are worth between $1,001 and $15,000.

Bengs also declared between $15,001 and $50,000 from the South Dakota Retirement System. Bengs was a professor at Northern State University in Aberdeen from 2016 to 2020, according to his LinkedIn profile.