Skip to main content

Federal agency stonewalls Freedom of Information Act requests on Forest City's EB-5 green card scheme, waits four-plus months to send denial letters

Will we ever find out how exactly federal authorities gave preliminary approval--and more--to the astounding efforts to get Chinese millionaires to invest in Atlantic Yards in exchange for green cards?

Not that likely.

During a crucial four-month period when developer Forest City Ratner and the New York City Regional Center successfully recruited immigrant investors in China and South Korea, the United States Citizenship and Immigration Service (USCIS) stonewalled my Freedom of Information Act requests in a a very odd fashion.

The USCIS responded to me in letters dated 10/22/10 and 11/2/10, as well as two undated letters.

However, it did not mail those letters until early March, some four months later, and gave no explanation for the delay.

(Was the belated contact made in anticipation of National Freedom of Information Day, held March 16 in honor of James Madison’s birthday?)

Moreover, the explanation given for three denials of my FOIA requests--that they were not of journalistic and public interest--seems belied by another letter that granted a request for expedited treatment, apparently because my request was of journalistic and public interest.

While that request was granted, I have not received the records at issue.

Little scrutiny

The denials essentially insulated the parties from another level of journalistic scrutiny by me, and potential scrutiny by others.

The story is juicy but complex, and while there have been quick hits in the New York Post and the New York Daily News, no news organization has dug into the story. The New York Times has virtually ignored EB-5, papering over the controversy in two paragraphs.

The Wall Street Journal scooped me in uncritical coverage apparently fed by the developer, then followed up by ignoring irrefutable evidence, raised not only by my reporting but also by Reuters, of deceptive marketing.

The background


In September, I began researching efforts by the New York City Regional Center (NYCRC), a federally-authorized investment pool working with developer Forest City Ratner, to recruit immigrant investors for purportedly job-creating projects under the EB-5 program.

The NYCRC, which had already been authorized to seek investors in several business sectors (and had recruited investors for projects at the Brooklyn Navy Yard), had successfully petitioned the United States Citizenship and Immigration Service (USCIS) to include the Atlantic Yards project.

They did not ask to include the "Brooklyn Arena and Infrastructure Project"--said to consist of the arena, infrastructure, and a new railyard--as marketed to immigrant investors.

Why? Perhaps because 1) there's no such thing and 2) the arena's already funded.

Documents sought


In September, I attempted to get documents from the USCIS under the federal Freedom of Information Act (FOIA).

My requests for documents, as well as expedited treatment and fee waivers, were filed in September and October 2010.

The specifics


In my first letter, dated 9/27/10, I made several records requests, all relating to the work of the NYCRC.

Knowing that the USCIS had earlier approved the requested designation of the NYCRC as a Regional Center under the Immigrant Investor Pilot Program, I sought a copy of the "June 18, 2008 business plan and job creation analysis and multipliers reflecting the development of various sample projects."

Given that developer Forest City Ratner and the NYCRC planned to seek immigrant investors to invest in the NYCRC to support the Atlantic Yards project in Brooklyn, I requested copies of updates to the NYCRC's business plan, and documents that explain the connection between that planned investment and jobs.

I also sought a copy of any representative Form I-526, and associated documents, filed by an immigrant investor regarding an investment in the NYCRC to support the Atlantic Yards project. I noted that I did not seek any personal information, which can and should be redacted, but rather sought "records that indicate the connection between such an investment and retention or creation of jobs."

I also filed a request for a waiver of fees, as is typically granted to journalists.

USCIS response

I got a quick response, in about a week.

My requests were divided by the USCIS into two parts--one regarding NYCRC documents in general and one regarding the I-526 request. Both requests were rejected, as was my request in each case for fee waivers.

I filed appeals on 10/5/10.

On 10/18/10, I wrote to update and amend my previous requests.

I noted that, according to a 9/23/10 letter from USCIS to the NYCRC, the latter had successfully requested to amend its designation as a regional center to include the Atlantic Yards project, having sent such documents as a business plan, job creation methodology, economic impact report and sample organizational documents.

I requested "copies of documents that help describe how the EB-5 investment is expected to create jobs, when combined with private and government funds."

The response


The USCIS responded to those requests--two for records, two for fee waivers--in four separate letters.

Two letters were undated, one was dated 10/22/10, and the other was dated 11/2/10. Presumably the undated letters were prepared at around the same time.

However, three of those letters were mailed 3/1/11; the other was mailed 3/3/11. (Click on graphic to enlarge, and also see below.)

The rationale: not of public interest


My appeal for access to records pertaining to I-526 forms was denied, according to the letter (below), because I did not sufficiently demonstrate that my request involves "an urgency to inform the public about an actual or alleged federal government activity (if you are a person primarily engaged in disseminating information)."

My request for a waiver of fees regarding records pertaining to I-526 forms was denied, as the agency stated, because "We are unaware of any significant public understanding of government operations or activities that would result from the release of the records you seek."

My request for a waiver of fees regarding NYCRC records was denied because, as the agency stated, "We are unaware of any significant public understanding of government operations or activities that would result from the release of the records you seek."

Very strange.

Request granted, not fulfilled

However, my request for expedited treatment regarding such records was granted in the 11/2/10 letter, "based on additional information obtained in reviewing your appeal."

The "additional information" implies that the USCIS did reconsider whether any "significant public understanding" was at issue.

(I had sent information about the controversy over the potential EB-5 funding, which had been covered in my blog, my Huffington Post coverage, the New York Post, and the New York Daily News. "As far as I can tell, no other EB-5 project has generated such public discussion and concern," I wrote.)

However, I have not received any records.

The bottom line

I was able to do a significant amount of reporting without the governmental records, as detailed in my Anatomy of a Shady Deal series and other coverage.

However, some information is still missing. How exactly are they calculating jobs? (We have some hints, from a web site set up by EB-5 marketers in South Korea.)

Indeed, the “urgency to inform the public about an actual or alleged federal government activity, if made by a person primarily engaged in disseminating information,” is greater than ever.

USCIS EB-5 letter C

USCIS EB-5 letter B

USCIS EB-5 letter A

EB-5 letters, mail dates

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.