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Initially, the program is positioned in an extremely strange and non-helpful bureaucratic area for the stimulation of international financial investment in the United States. Second, its range is all wrong. We are distributing also much for too little of a financial investment. Better, raising financial backing half a million bucks a tranche is, to state the least, ineffective.


The regional facilities, with their half-million plans, basically undercut the more practical million-dollar part of the EB-5 program. Third, such programs, if we have them in all, as they carry out in Australia, should have to do with producing organization entities, not passive investments. It must have to do with developing real tasks, not clarify calculations regarding the indirect creation of tasks, which is currently part of the legislation.


Possibly that is among the reasons it has stopped working year after year to reach the legal goal of 10,000 financial investment visas. Fifth, the Regional Center Program is naturally clumsy, and the program is as well loaded with intermediaries, both public and personal. The program has greater than its share of scandals, which I will get involved in later on if any person is interested.


This is an agency that likes to claim yes to applicants, but as the table in my statement reveals, USCIS policemans have far more trouble with EB-5 applications than others. I believe that is something that no one has actually actually spoken about a lot. EB5 Regional Center Program. There are high rates of interior denials in this program and completely reason

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Seventh, in this program visas go to individuals that might not get them differently and to people whose scheduled financial investment is in fact much less, according to the Federal Reserve, than the average mean total assets of all American households in 2007. Let me broaden on among my monitorings.


My price quote based upon the investors' copyright applications submitted 2 years after the very first investment-- these are the strong ones that remain and are approved. This is 2009-- was that they had concerning $191 million verified-- that is my estimate. USCIS does not provide the sort of data that we might make use of on this.


So for every single $100 of boosted foreign financial investment that year, the EB program added one cent. Under a a lot more shaky analytical base, the first applications of would-be immigrant financiers, USCIS is telling reporters that the level of financial investment in the just-concluded year had to do with $1.2 billion. Allow us approve that.

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Thank you for paying attention to me. I expect your comments and questions. [The prepared statement of David North looks like an entry for the record.] Chairman Leahy. Thank you. Our next witness is Robert Divine. He is a shareholder of Baker, Donelson, Bearman, Caldwell, and Berkowitz. He is the head of the firm's immigration method group.




Divine offered as Chief Guidance of the USA Citizenship and Immigration Services from July 2004 up until November 2006, the year in which he was Performing Director, and after that Performing Deputy Supervisor. He has functioned extensively with the EB-5 program secretive method. He was elected, as I understand, vice head of state of the Association to Invest in United States, the national market organization of regional.


STATEMENT OF ROBERT C. DIVINE, LAWYER, BAKER, DONELSON, BEARMAN, CALDWELL, AND BERKOWITZ, P.C., CHATTANOOGA, useful reference TENNESSEE, AND VICE HEAD OF STATE, INVEST IN THE United States (IIUSA) Mr. Divine. Thank you, Mr. Chairman, Senator Grassley, and others.


At most, if all 10,000 slots were made use of, it would certainly be 1 percent of the immigration each year to the United States. It is not near that yet, but it is growing and obtaining towards that. Especially as USCIS, the agency that oversees the program, has been making the rules clearer and the processes more reasonable and clear for the individuals who are arranging financial investments and for the capitalists who are investing, even more people have wanted and able to place initiative and money right into the process to locate excellent tasks and develop them, and afterwards extra financiers have agreed to invest their cash and take the danger and utilize the cash to develop the work that is the factor of the program.

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These tasks do not wait around forever, and USCIS recognizes that and are attempting to speed up the program, speed the process - EB5 Regional Center Program. That does not mean that they are unwinding their scrutiny, and, actually, they are prepared to reject applications that are not qualifying. And they do so, as was stated


The regional center component of the program is not. It is part of an appropriations bill that was passed in 1992, and ever since that program has been prolonged 5 times for 19 years. It is time for it to be irreversible, and it requires to be done currently and not nearer to the day of expiry in September.


The process takes a good while to function up a project and then to get the financiers authorized. And they do not desire their cash moving via till they have actually been accepted. And the specter of the expiry of this Regional Center Program in September is already preventing the growth of tasks.

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I want view it now to make clear that the Regional Center Program is not the like the half-million-dollar point. The idea of half a million or a million is a function of the normal EB-5 regulation that becomes part of the code. It just is a fact that a lot of the local facilities that are pooling investments have actually established those in areas of high unemployment or in rural locations where fifty percent- million-dollar investments are like it permitted, which makes sense.