Wednesday, October 22, 2014

U.S. State Department protests use of official in marketing "Atlantic Yards III" EB-5 investment to Chinese, gets mention cut from promotion

Also see coverage of the misleading video used in Atlantic Yards III promotion.

From the Qiao Wai web site, last week
The promoters of the "Atlantic Yards III" investment, aimed at immigrant investors seeking green cards in exchange for cheap loans, have provoked a slap on the wrist from the U.S. State Department, which asked them to stop claiming that a top State Department official supported the project.

Now mention of Assistant Secretary of State Charles Rivkin has been removed from a Chinese migration consultancy's website promoting the investment, which still lists six upcoming seminars aimed to recruit investors.

Last week, in an article, on Twitter, and in queries to the State Department, I asked whether it was appropriate for Rivkin to be portrayed as supporting "Atlantic Yards III."

It is a $100 million slice of the overall Atlantic Yards/Pacific Park project, marketed under the EB-5 program, in which investors and their families get green cards by parking $500,000 in a low-interest loan for five years or so, as long as an economist's report suggests those funds create ten jobs. (The job-creation requirements are fuzzy, actually.)

Rivkin, as shown in the screenshot above right, got the most prominent placement in the promotion. It was, to my knowledge, the first time an active State Department official was portrayed as boosting an EB-5 program.

Now he's gone from the Qiao Wai web site, as shown in the screenshot at right, and Brooklyn Nets forward Mirza Teletovic, who has nothing to do with the EB-5 program but (duh) likes the Barclays Center, got a promotion on the page. Though the Barclays Center serves as the centerpiece of the promotion to immigrant investors, the arena has already been built and thus can't be the subject of the "Atlantic Yards III" investment.

From the Qiao Wai web site, this week
The fig leaf of official support 

Another misdirection involves the other three officials portrayed as supporting the project: former New York Gov. David Paterson, former New York Mayor Mike Bloomberg, and former Brooklyn Borough President Marty Markowitz.

They're all out of office. And they praised the overall Atlantic Yards project, not this specific slice nor the previous two slices packaged for EB-5 investors, all of which come with their own separate business risks.

But the endorsement and presence of elected officials enhance a project in the eyes of potential investors from China and business ethics--in EB-5, in China--are often not a priority.

So the EB-5 promoters blur the difference. The promotion is the work of the Qiao Wai migration consultancy in China, which works with the U.S. Immigration Fund, a Florida-based regional center, a federally-approved entity to package the investments.

And the U.S. Immigration Fund works with Greenland Forest City Partners, the joint venture building Atlantic Yards/Pacific Park, which is owned 70% by the Greenland Group, a Shanghai government-owned enterprise.

As I wrote: as with the second round of Atlantic Yards fundraising, a foreign government is profiting by marketing a scarce U.S. public resource--green card slots under the EB-5 program--to its own citizens. And that, as far as I know, is unprecedented.

Rivkin's claimed role

In the screenshot at top, Rivkin was quoted as offering vague support for the overall project:
"Held and invested in by Greenland Group, the New York Atlantic Yards project has promoted local economic development, improved local employment, enhanced local urban functions, and made remarkable contributions to local development."
It's unclear whether he said those relatively bland words, and if so in what context. (He did hold a meeting with Greenland and did speak at a conference concerning EB-5.) But even if he did, that wasn't an endorsement of the EB-5 investment.

"Assistant Secretary Charles Rivkin has not endorsed or advised on any specific visa application or process," Kerry Humphrey, Media Advisor, Economic and Business Affairs Bureau, Department of State, told me, in response to my query.

"Assistant Secretary Rivkin is a public figure and sometimes his photograph is used without permission," she added. "His picture on this website does not constitute endorsement. We have asked for it to be removed."

Humphrey explained that State Department officials in Guangzhou contacted both Qiao Wai, which works with the U.S. Immigration Fund, as well as the Association to Invest in the USA (IIIUSA), the trade association of regional centers, to remove mention of Rivkin.

Thus the IIUSA, at the State Department's request, removed Rivkin from its website, apparently this 6/26/14 post:
For those who have been waiting to join IIUSA’s trade mission to Xiamen, China – we have some excited new information to share. As part of IIUSA’s commitment to bringing exciting and cutting-edge programming to our conferences, we are proud to announce that Charles H. Rivkin, the Assistant Secretary of State for Economic and Business Affairs, will be a special guest to the U.S. delegation to CIFIT. Previously, Mr. Rivkin served as United States Ambassador to France and Monaco. 
The headline has since been changed from IIUSA Trade Mission to CIFIT: Special Guest Charles H. Rivkin to Speak to U.S. Delegation to IIUSA Trade Mission to CIFIT Fast Approaching!

More questions

In response to my questions, Humphrey stated, "President Barack Obama has made it clear that the United States is 'open for business' and the United States warmly welcomes foreign investors to operate in our transparent, stable and open market."

That sounds like an overall endorsement of the EB-5 program and others drawing foreign investment. (Then again, note some new skepticism from the Migration Policy Institute.)

"We value the feedback we receive from overseas investors and others looking to do business in the United States," she added. And, apparently, they listen to feedback from those who see how such business can be hyped.

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