New EB-5 Program office to be created

A new office will be created to oversee the EB-5 Program, according to an announcement on July 19 by USCIS Director Alejandro Mayokas.
Also, a review board will be created by the end of July, consisting of two supervisory immigration service officers and an economist, to examine regional center applications recommended for denial, with applicants having the opportunity to meet with the board members in person.
These are major positive developments for the EB-5 Program, which has lurched from crisis to crisis over the past few years.
The new, dedicated EB-5 Program office will be led by a Chief of Immigrant Investor Programs.  Mayorkas said the job was posted July 19, and that he's looking for someone who has "significant experience in the business world and will assume responsibility for ensuring that the program is administered efficiently, with integrity, with predictability, and with an understanding of today's business realities."
"We understand," he wrote in the announcement to EB-5 stakeholders, "that more work needs to be done to further improve our administration of the EB-5 Program."
This is all good, but we'll see.  As my father used to say, "Don't listen to what people say; watch what they do."
The EB-5 Program enjoyed a brief period of clarity and certainty in 2005 when it was led for almost four years by a former Commerce Department employee.  Let us pray that USCIS hires someone who can understand the EB-5 Program.  Stakeholder meetings, conferences, conference calls, and requests for additional evidence make it abundantly clear that there are wide gulfs in levels of understanding of the EB-5 
Program generally, and regional centers and regional center investment projects specifically, among USCIS employees at the California Service Center.

Senators should vote for permanent EB-5 Program

Please encourage your U.S. senators to vote for S. 3245, which was introduced by Judiciary Committee Chairman Senator Patrick Leahy and ranking member Senator Charles Grassley.  Cosponsors include Senators Conrad, Hatch, Kohl, Lee, Rubio, and Schumer.

The bill would make permanent four existing visa programs due to "sunset" on September 30 -- the EB-5 Regional Center Program, CONRAD30, E-Verify, and religious workers.

This will have the very positive effect of eliminating uncertainty that Congress supports these important visa programs.

USCIS economists drop a bomb on EB-5 stakeholders

It was supposed to be a conference call to bring newly hired EB-5 economists from the California Service Center to USCIS HQ in Washington for a forum.  On June 22, Director Alejandro Mayorkas and the economists went first, and then in-person and on-the-phone participants could ask questions or make comments.
It was near the end of their presentation when the USCIS economists dropped their bomb on EB-5 stakeholders.  The USCIS economists said that land acquisition costs cannot be used in I/O models (methodologies) to show the creation of indirect and induced jobs.  I understand the reasoning, but this is another change in policy -- another example of "moving the goalposts", just like the now-infamous "tenant occupancy" memo of February 17, which was sprung on EB-5 stakeholders without warning.
I get that.  But what about pasture land for dairies?  What about cows?  What's next on the chopping block?
There was very little utility in the information provided by the USCIS economists.  The call was not a total waste of time, but almost.  USCIS employees generally demonstrate that the less said and the more vague the better.  That approach serves the agency's interests well, but does nothing to help its customers.

Sad to sing my swan song

     I just rotated off the EB-5 Investors Committee of the American Immigration Lawyers Association.  For four long years I battled to improve, along with my hard-working colleagues, the management and function of the EB-5 Program and the Immigrant Investor Pilot Program.
     Sadly, if I were asked, "Is the EB-5 Program better off today than when you took office?", I would have to say no.  While the numbers are greater, i.e., there are more I-526 petitions (for the conditional green card) and I-829 petitions (for the permanent green card) being approved by U.S. Citizenship and Immigration Services (USCIS) today, there are also wrenching changes in adjudications and federal policy, without lawfully required rulemaking procedures, and failure even to implement what the headquarters staff tells immigration service officers at the California Service Center to do, or how to approach particular problem areas in adjudications.
     My disappointment in USCIS knows no bounds.  I am actually relieved to be away from the fray for awhile.
     It was bad enough listening to a USCIS CSC employee deride stakeholders, who traveled thousands of miles for the meeting in California, over an open mike.
     So the AILA committee's parting shot was a 10-Point Program, to-wit:
     1.  Provide a forum whereby USCIS representatives on a quarterly basis can advise regional center stakeholders of the issues it is seeing in applications that are producing the largest numbers of RFEs and denials.  At the same forum, allow regional center stakeholders to provide lists of adjudicatory issues on which there is a lack of clarity.
     2.  When new standards are going to be implemented that will affect large numbers of applications (whether it involves the methodology for the counting of jobs that will be created, or the structure of bridge financing, or any other aspect of an EB-5 transaction), provide notice to stakeholders in advance rather than issuing large numbers of RFEs on issues that were not issues at the time of filing.
     3.  Implement USCIS Director Mayorkas’ idea of a Decision Board as promptly as possible.  This Decision Board would be made up of economists and business analysts and would meet or conference with regional center applicants to discuss any issues that need to be resolved before a project can be approved.
     4.  Hire a sufficient number of examiners to bring processing times to levels that make some sense in a time-sensitive, job-creating program such as EB-5.
     5.  Instruct examiners that, except in rare instances, multiple RFEs should not be issued.
     6.  Publish meaningful guidelines on what adjudicators want to see when adjudicating a regional center application.  Most denials and RFEs are based on often-changing policies that are not contained in any regulation or even any government-issued memorandum.
     7.  Make the regional center amendment process workable.  Regional Centers are approved for specific geographical areas, specific industry codes and specific economic methodologies for counting job creation.  Right now, if a regional center wants to amend its geography, economic methodology or industry code, the published processing time is 8 months – longer than filing a new regional center application.  This is unworkable.
     8.  USCIS has created a process – the exemplar I-526 – that enables a regional center to have a project approved for EB-5 investment prior to receiving investments.  The problem is that, despite a $6,230 fee and an 8-month processing time, USCIS does not consider itself bound by any approval.  USCIS must make this process meaningful as a way of saving time and adjudicatory resources.  If it is not meaningful, stakeholders should not be expected to pay large filing fees and wait long periods of time; and the process should be eliminated.
     9.  Provide substantive responses to inquiries sent to USCIS’s EB-5 mailbox.
     10.  Last, but by no means least, increase the monitoring of approved regional centers.  We all agree that if there are any non-compliant regional centers or project developers, they do harm to the program and should be eliminated.
     Even though I was proud to serve AILA on the EB-5 Investors Committee, I was sorry to leave my fellow committee members with so many daunting challenges.  It should go without saying that the EB-5 immigrant visa investor program should be a win-win for everybody, but according to USCIS, it's just another visa program full of fraud and abuse.  More's the pity.

EB-5 Program statistics released

     The EB-5 immigrant investor visa program is still woefully underutilized, if newly released statistics are any guide.  The Office of Performance and Quality of U.S. Citizenship and Immigration Services shows that 1,563 I-526 petitions (for the conditional immigrant visa) were approved in federal fiscal year 2011, up from 1,369 in FY 2010.

     But based upon preliminary data from the first two quarters of FY 2012, 2,101 I-526 petitions were approved.  That's better, but still nothing for USCIS to crow about considering Congress makes available 10,000 visas each federal fiscal year.

     On the backside of the process, USCIS approved 1,067 I-829 petitions to remove conditions on residence, and there were 522 approvals during the first two quarters of FY 2012.

     The approval percentage for I-526 petitions in FY 2011 was 81 percent, and for the first two quarters of FY 2012, it was 85 percent.

New York EB-5 summit

I will speak to this group on April 27 at the Hilton in New York City.

EB-5 New York Summit

I invite you to sign up and attend if you want to learn more about the EB-5 Program.

USCIS throws EB-5 Program another curveball

I always enjoy talking with Jeffrey B. Carr. He is one of the most creative thinkers about EB-5 issues, particularly when it comes to economics and job creation.
Jeff is president and economist at Economic Policy Resources of Williston, Vermont (eb5economics.com).  I spoke with him Monday, March 5, when I addressed a special EB-5 seminar for Immigration Lawyers on the Web (ILW) in Orlando, Florida.
Jeff and I discussed a new "jobs displacement" issue that has popped up in who knows how many requests for additional evidence.  USCIS recently papered the country with requests that applicants show their investment project will not "displace" existing U.S. workers.
He said there is disagreement now between how USCIS defines a "direct job" and how EB-5 economists, generally, define a "direct job".  He said EB-5 economists can produce a rationale for counting tenant jobs as direct jobs.
The "tenant jobs" issue came up within the past couple of weeks after USCIS issued a memo declaring that "tenant jobs" are not "direct jobs".  Then we started seeing the RFEs referring to "jobs displacement".  I think this is going to get much worse for all of the stakeholders in the EB-5 Program, including -- most importantly -- foreign investors.
As a practical (real world) matter, the "jobs displacement" issue is never a consideration because the economy -- locally, regionally, nationally -- is constantly changing and evolving.  Some sectors of the economy and companies or industries do well; others don't.  Competition is a big part of this.  Businesses that compete effectively and adapt succeed; others fail.  A new hotel is built in a locale; an older hotel loses occupancy and closes.  That's life.