DHS Issues EB-5 Report

The Department of Homeland Security (“DHS”) internal Office of Inspector General has issued a report that the prior head of the USCIS, (now Deputy Secretary of DHS), Alejandro Mayorkas, showed favoritism for a few EB-5 RC projects, including one for a political friend of the Clintons, now the Governor of Virginia.

I have looked at this story in detail. Mayorkas actually refused many requests for help to reverse a USCIS finding about a RC project for an electric vehicle company. There was nothing expeditious, the case was denied and appealed. Finally, Mayorkas had his legal team look at the technical legal issue whether the RC had an illegal redemption agreement with its investors. Mayorkas’ legal team concluded the USCIS’s decision was wrong and he ordered the approval of the case. Mayorkas did the right thing in having his legal staff review the matter so a correct decision could be made. That is what managers are supposed to do.

A congressional hearing was held last week at which a DHS official said Mayorkas violated ethical rules but broke no laws.

Also, the DHS report says Senator Harry Reid (D-NV) advocated for USCIS to approve a few EB-5 projects including a RC casino project in Nevada. Questioned about this, Senator Reid was unapologetic. He said the bureaucracy is too slow and decisions need to be made promptly when foreign investors are trying to invest millions of dollars in the U.S.

Former Director Mayorkas has been the most involved head of the immigration agency that I have seen. He pushed USCIS to change. He hired economists, business and securities law experts for the EB-5 unit. He personally attended EB-5 stakeholder calls and approved the issuance of numerous policy memos to clarify the agency’s rules. If there is criticism of Mayorkas’ tenure at USCIS to be made, it should be that he failed to have the agency decrease the severe backlogs and slow decisions.

It is sad to see the EB-5 jobs and immigration program used as a political football. The DHS report and Congressional criticism of a top manager, who was actually getting work done, will only dissuade others from stepping in when cases go off the rails. As a result, people may have to resort to the courts to mandate decisions.