Wednesday, January 25, 2012

Federal agency overseeing EB-5 immigrant investment program confirms that it will continue to let states gerrymander districts of high unemployment

I wrote 1/11/12 how a revised draft memo on EB-5 Adjudications Policy, issued that day by the United States Citizenship and Immigration Services (USCIS), punted regarding the practice by states of gerrymandering maps to ensure projects aimed at immigrant investment were located in areas of high unemployment.

And that allows for a lower investment level, $500,000, rather than $1 million, for those seeking green cards and their families.

Last month, in a front-page article, the New York Times put the gerrymandering issue on the national agenda, forcing USCIS Director Alejandro Mayorkas to acknowledged concern about the spirit of the legal provision which aims to help high-unemployment districts.

The Times article, which focused on the odd maps approved for New York projects (including what I've dubbed the "Bed-Stuy Boomerang" involving Atlantic Yards), even generated an editorial chiding the federal agency.

But the memo issued earlier this month stated that the USCIS would continue to give deference to the lines drawn by the state.

Further confirmation

The agency has since offered further confirmation. After a 1/12/12 meeting Mayorkas and staff held with stakeholders--almost all immigration attorneys and project promoters eager to ensure a smooth ride for their clients--EB-5 attorney Ron Klasko wrote, in a 1/18/12 post on the EB-5 News Blog:
USCIS reconfirmed that it will defer to the designation by a state of a specific geographical area as a targeted employment area.
On Monday, 1/23/12, in another teleconference with stakeholders, listeners heard it directly from a staffer, Kevin Bezaire:
"We've recently decided that, as in the director's iterative memo, that we are going to defer to state agencies in regards to the geographic area of TEA designation. And I guess that’s the main point I wanted to make today."
So, it seems Mayorkas was posturing for the press.

Prospects for reform

Will there ever be reform? Only if Congress steps in (as the Times urged). 
And it can, given that the main component of the EB-5 program--investments through federally-designated entities known as regional centers--must be renewed by the end of September.

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