Search Results for: eb-5

It’s Time to End the Federal Government’s Cash-for-Visas Program

The Washington Post rightly called on the Trump Administration yesterday to end the government’s controversial EB-5 visa regime and, in particular, its Regional Center Program, which was recently extended until the end of September 2017. In most cases, the “Immigrant Investor Program,” or Employment-Based Preference Five (“EB-5”) cash-for-visa program, permits foreign nationals to apply for a conditional visa by investing $500,000 in an area of “high unemployment.”  Once certain job creation requirements are satisfied, the visa holder can apply for a green card (i.e., for permanent residence).  Although advocates contend that EB-5 is good for the economy, the program has been beset with controversy.  Most recently, President Trump’s son-in-law, Jared Kushner, came under scrutiny for his family’s efforts to “push” EB-5 visas to wealthy Chinese investors.

Cause of Action Institute’s (“CoA Institute”) investigation into various aspects of the EB-5 cash-for-visa program and the Regional Center Program have shown that these initiatives are continually abused for political or fraudulent purposes—a fact now acknowledged by the Government Accountability Office.

  • CoA Institute published a comprehensive report detailing how Virginia Governor Terry McAullife’s former company, GreenTech Automotive, used his political connections to garner millions of taxpayer dollars in loans and tax incentives. GreenTech remains embroiled in an investigation by the Securities and Exchange Commission for its involvement with EB-5. The Inspector General for the Department of Homeland Security reported that McAuliffe and friends—including Anthony Rodham, brother of former Secretary of State Hillary Clinton—benefited from political favoritism in the administration of the visa program.
  • CoA Institute’s report on Forest City Enterprises explained how corporate interests and state and local government worked together to take advantage of weak and ambiguous regulations governing EB-5—manipulating census data to create “targeted employment areas” and relying on questionable job prediction models to meet green card conditions. CoA Institute also discovered that Forest City contracted the same immigration lawyer and economist as GreenTech.
  • CoA Institute filed an ethics complaint against former Senator Harry Reid, who contacted officials at the U.S. Citizenship and Immigration Services in an attempt to influence the approval of EB-5 visa applications for a casino development project owned by Reid’s donors and represented by his son. The Senate Ethics Committee ignored the request, claiming that it never received a copy despite evidence to the contrary.
  • In the wake of the DHS Inspector General’s report, CoA Institute called on the Department of Justice to investigate a number of government officials for violation of federal laws.

Simply stated, the EB-5 Program operates as a cash-for-visa scheme. Whatever economic advantage it might offer is outweighed by the corruption it engenders and negative influence it has on national security and good government.  Congress should end the program or work to reform its governing rules to prevent continued abuse by the political class.

Ryan Mulvey is Counsel at Cause of Action Institute

More Broken Promises: Taxpayer-subsidized electric car company misses debt payment

According to recent reports, GreenTech Automotive—the electric car company that was once a joint venture between Virginia Governor Terry McAuliffe and Chinese investor Charles Wang—missed its first repayment on a $3,000,000 public loan from the Mississippi Development Authority (“MDA”).

The story of GreenTech is one of broken promises. In a series of investigations, which culminated in the publication of a comprehensive report in 2013, Cause of Action Institute explained how GreenTech used McAuliffe’s political connections to garner millions of taxpayer dollars in loans and tax incentives, yet failed to meet expectations, instead exaggerating projections of job creation and vehicle production.

According to the Memorandum of Understanding between GreenTech and the MDA, the company promised to invest at least $60 million in the state and create at least 350 full-time jobs within three years of starting commercial production.  In exchange, Mississippi officials promised to loan $2 million to local government to purchase the plot for the company’s production facility, and to provide a direct loan to GreenTech of $3 million.  GreenTech also received a host of tax breaks and incentives valued at $25 million.

As of May 2016, however, sources suggest that GreenTech employs merely 75 people and has failed to sell a single vehicle.  On top of its apparent inability to make good on its promises to taxpayers, the company’s added failure to meet the initial repayment deadline on the public-funded loan calls into question the economic viability of the entire project.

GreenTech and its former chairman, Governor McAuliffe, have been embroiled in other controversies. The company is under investigation by the SEC for its participation in the EB-5 Immigrant Investor Visa Program, through which it has received approximately $46 million in foreign capital, according to some reports.  The watchdog for the Department of Homeland Security also reported that McAuliffe and friends—including as Anthony Rodham, brother of former Secretary of State Hillary Clinton—benefited from political favoritism in the administration of the EB-5 program.

It is unknown whether Mississippi officials will take action against GreenTech for its failure to perform under the loan agreement. But taxpayers should be concerned that the company be given a mere slap on the wrist for its apparent misuse of public funds.

Read Cause of Action Institute’s report on GreenTech Automotive HERE

Related documents can be found HERE

Weekly Rundown 11-6-2015

Cause of Action in the News:

Full MeasureFull Measure with Sharyl Attkisson

In the fight for government transparency, Cause of Action graded federal agencies on their transparency and response time to FOIA requests. Not surprisingly, many agencies earned very poor grades while two received A’s. Interestingly, the Department of Veterans Affairs scored an A, despite public exposure of the agency’s notorious wait-time scandal the same year. Cause of Action Executive Director Dan Epstein opined, “if you think about it, part of the reason the public knows about the VA scandal is because of the easy ability to get documents. That should show why transparency is actually a good thing for reforming federal agencies.”

Wall Street JournalFranz Kafka in Footie Pajamas (My consignment company for secondhand children’s clothes has somehow run afoul of federal regulators.)

Meet Cause of Action client Rhea Lana Riner, a business woman who started a small and successful consignment business in 1997 that now has franchises in 24 states. Rhea Lana relies heavily on volunteers who are willing to help before and during the events who then get rewarded with perks such as being able to shop first. The Department of Labor decided that her volunteers must actually be considered employees and that she owes them back wages. Even though none of the volunteers have come forward demanding payment for their volunteer hours, the Dept. of Labor continues to try to obstruct Rhea Lana’s business.

In Other News:

Government ExecInspectors General Continue Battle With Justice Over Document Access

The Justice Department has written to Congress that there should be a change in the law that would allow federal agencies to deny access to certain information by inspectors general. They write this as congress holds hearings on a bill that would empower the inspectors general to do their job. The IGs responded saying “While the DOJ agrees with CIGIE that legislation is needed and should be passed by Congress to reverse the impact of the OLC opinion, the DOJ’s proposal only applies to the DOJ Inspector General’s access to records and fails to ensure that all other federal inspectors general have the same independent access at their respective agencies. As such, DOJ’s proposed legislative language is not acceptable.”

PoliticoState Dept.: Outlook crashes delay release of Hillary Clinton schedules

The State Department has been unable to meet the deadline for turning over former Secretary of State Hillary Clinton’s emails due to multiple Microsoft Outlook crashes.  Kelly Degnan, the State Deputy Executive Secretary, wrote a declaration that stated, “[t]hroughout August and the early part of September, problems with the Microsoft Outlook software caused Outlook to crash during the indexing process (a process that is necessary in order to conduct searches of emails which have been retained as .pst files) for searches [State’s executive secretariat within the office of the secretary] was running for other requests, preventing S/ES-S from applying search terms to the records and forcing S/ES-S to restart the indexing process[.]”

Daily CallerEPA’s Smog Regulation Will Cost 40x More Than It Predicted

A new report by the American Action Forum says the Environmental Protection Agency estimate on the cost of the new smog limits is highly inaccurate.  According to the EPA, the new limits will cost $1.4 billion per year; however, AAF has determined the American people will be losing $56.5 billion in income. The report, which looked at counties who were not compliant with the 2008 standard, explains “[o]bserved nonattainment counties experienced losses of $56.5 billion in total wage earnings, $690 in pay per worker, and 242,000 jobs between 2008 and 2013.”  With so many penalties for noncompliance with the 2008 smog standard, it makes sense that the new standards will have an even harsher impact.

SF GateFeinstein calls for end to controversial EB-5 immigration program

The EB-5 visa program gives out green cards to foreign nationals and their families if they invest into U.S. businesses.  Without Congressional action, the program is set to expire in December.  One of the strongest opponents is Senator Diane Feinstein, who noted “[a]t its most basic, the EB-5 program allows a foreigner to invest $500,000 in a U.S. business, in return receive a visa that puts them and their direct family on a special path toward citizenship.  At the same time, individuals unable to buy their way into the country remain trapped in seemingly endless visa backlogs that often last more than 20 years. I believe the program is deeply unfair, sends the wrong message about this country’s values and is prone to fraud and abuse.”

Weekly Rundown 5-8-2015



CNN Money: Whistleblower accuses cybersecurity company of extorting clients – Cause of Action’s fight against the FTC continued on Tuesday… Read More

Law 360: Analyst Backs LabMD In FTC Row, Alleges Fraud At Tiversa — “LabMD Inc. on Tuesday scored a major hit in its data security fight with the Federal Trade Commission after a former analyst at the cybersecurity firm Tiversa Inc. testified that his company lied to the agency about the extent of LabMD’s data leaks after the medical testing firm turned down its services… According to LabMD’s attorney Reed Rubinstein… the testimony marked a “remarkable day” in the case and vindicated the company’s assertion that “the FTC action was based on manufactured evidence.” At the close of the hearing Tuesday, Rubenstein announced that LabMD will seek a criminal investigation against the Tiversa…” Read More

Epoch Times: EB-5 Visa Limits May Slow Flow of China’s Elite to US – Cause of Action will not allow public officials to take advantage of the EB-5 visa program… Read More

Fox News: Clinton agrees to testify this month before House committee on Benghazi, private emails — “Democratic presidential candidate Hillary Clinton has agreed to testify on Capitol Hill this month about two controversial issues when she was secretary of state — the fatal terror attacks in Benghazi, Libya, and using a private server and emails for official business, her attorney said Tuesday…” Read More

Washington Times: IRS still targeting tea party: Nine groups awaiting agency approval — “Nine tea party groups were still awaiting IRS approval for nonprofit status nearly two years after the political targeting program was exposed, the inspector general said in a report Thursday that, despite hiccups, claimed the tax agency has generally done a good job of cleaning up its act…” Read More

Washington Examiner: Reid retirement follows call for probe of his role in visas-for-cash mess

Read the full story: Washington Examiner

Senate Minority Leader Harry Reid’s announcement Friday that he won’t seek re-election in 2016 came at the end of a week in which his role in pressuring Department of Homeland Security officials on behalf of foreign investors in his home state of Nevada sparked one investigation and calls for another.


On Thursday, the nonprofit government watchdog Cause of Action called for a review by the Department of Justice’s Public Integrity Section of allegations that a top Homeland Security official improperly intervened on behalf of friends and political associates of Reid, Virginia Gov. Terry McAuliffe and Anthony Rodham, brother of former Secretary of State Hillary Clinton.


The review by Justice Department’s top anti-public corruption staff is needed, according to Cause of Action Executive Director Daniel Epstein, because “federal employees were pressured to make decisions that financially or politically benefited certain applicants and left many visa applicants feeling deprived of a fair process from their government.”

Fox News: Misuse of power in the Department of Homeland Security?

Watch: Cause of Action’s letter to DOJ on Fox News