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First, the program is positioned in an extremely weird and non-helpful bureaucratic location for the stimulation of global financial investment in the United States. Second, its range is all wrong. We are handing out excessive for too little of a financial investment. Even more, increasing equity capital fifty percent a million dollars a tranche is, to say the least, inefficient.


The local centers, with their half-million systems, essentially damaged the a lot more practical million-dollar component of the EB-5 program. Third, such programs, if we have them whatsoever, as they perform in Australia, must be regarding creating business entities, not passive investments. It should be concerning producing genuine jobs, not elaborate computations about the indirect creation of jobs, which is now component of the regulations.


Maybe that is just one of the reasons that it has fallen short every year to reach the legal goal of 10,000 financial investment visas. Fifth, the Regional Center Program is naturally awkward, and the program is too loaded with middlemen, both public and personal. The program has greater than its share of detractions, which I will certainly get into later if anyone is interested.


This is an agency that enjoys to claim yes to applicants, but as the table in my testament reveals, USCIS officers have a lot more difficulty with EB-5 applications than others. I assume that is something that nobody has really spoken about much. EB5 Regional Center Program. There are high rates of internal rejections in this program and for good factor

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Seventh, in this program visas go to individuals who could not get them differently and to people whose organized investment is really less, according to the Federal Book, than the ordinary mean internet well worth of all American households in 2007. Allow me increase on one of my observations.


My price quote based upon the capitalists' permit applications filed 2 years after the first financial investment-- these are the strong ones that remain and are authorized. This is 2009-- was that they had concerning $191 million validated-- that is my estimate. USCIS does not supply the kind of data that we could utilize on this.


So for each $100 of increased international investment that year, the EB program contributed one cent. Under a a lot more shaky analytical base, the preliminary applications of potential immigrant financiers, USCIS is informing reporters that the degree of financial investment in the just-concluded year was regarding $1.2 billion. Let us accept that.

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Thank you for listening to me. I expect your comments and inquiries. [The prepared declaration of David North appears as 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 technique group.




Divine functioned as Chief Counsel of the United States Citizenship and Immigration Services from July 2004 up until November 2006, the year in which he was Acting Supervisor, and after that Performing Deputy Supervisor. He has functioned extensively with the EB-5 program in personal practice. He was chosen, as I comprehend, vice head of state of the Organization to Spend in USA, the nationwide sector association of local facilities.


DECLARATION OF ROBERT C. DIVINE, LAWYER, BAKER, DONELSON, BEARMAN, CALDWELL, AND BERKOWITZ, P.C., CHATTANOOGA, TENNESSEE, AND VICE PRESIDENT, INVEST IN THE United States (IIUSA) Mr. Divine. Thank you, Mr. Chairman, Legislator Grassley, and others.


At a lot of, if all 10,000 ports were made use of, it would certainly be 1 percent of the migration each year to the United States. It is not near that yet, but it is growing and obtaining towards that. Especially as USCIS, the company that supervises the program, has actually been making the regulations clearer and the processes more reasonable and clear for individuals who are arranging investments and for the capitalists that are investing, more individuals have been ready and here able to put initiative and cash right into the process to locate great tasks and establish them, and then a lot more financiers have actually been ready to invest their money and take the risk and use the cash to produce the jobs that is the point of the program.

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These projects do not wait around permanently, and USCIS comprehends that and are trying to speed the program, speed the procedure - EB5 Regional Center Program. That does not suggest that they are unwinding their examination, and, as a matter of fact, they are prepared to reject applications that are not qualifying. And they do so, as was mentioned


The regional facility component of the program is not. It becomes part of an appropriations expense that was enacted in 1992, and ever since that program has actually been extended five times for 19 years. It is time for it to be long-term, and it needs to be done currently and not nearer to the date of expiry in September.


The procedure takes an excellent while to work up a job and afterwards to get the investors accepted. And they do not want their cash streaming through till they have actually been accepted. And the specter of the expiry of this Regional Facility Program in September is already inhibiting the development of tasks.

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I wish to clear up that the Regional Facility Program is not the very same as the half-million-dollar point. The concept of half a million or a million is a feature of the regular EB-5 regulation that is component of the code. It just is a reality that a lot of the local facilities that are pooling investments have set those in areas of high unemployment or in backwoods where fifty percent- million-dollar financial investments are allowed, and that makes sense.