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The program is put in a very weird and non-helpful governmental location for the stimulation of international investment in the United States. Second, its scale is all wrong. We are giving away excessive for as well little of an investment. Even more, raising financial backing fifty percent a million dollars a tranche is, to claim the least, ineffective.


The regional facilities, with their half-million plans, basically undercut the more reasonable million-dollar part of the EB-5 program. Third, such programs, if we have them in all, as they perform in Australia, should be concerning creating organization entities, not passive financial investments. It needs to have to do with developing actual tasks, not elaborate computations concerning the indirect development of jobs, which is currently part of the regulations.


Perhaps that is among the reasons that it has failed time after time to get to the legislative objective of 10,000 investment visas. Fifth, the Regional Center Program is naturally clumsy, and the program is too loaded with middlemen, both public and private. The program has even more than its share of scandals, which I will certainly enter later if any person is interested.


This is a company that enjoys to say yes to candidates, yet as the table in my testimony reveals, USCIS policemans have far more difficulty with EB-5 applications than others. I believe that is something that no one has truly spoken about much. EB5 Regional Center Program. There are high rates of interior rejections in this program and permanently factor

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Seventh, in this program visas go to people who can not get them any type of various other way and to people whose organized financial investment is actually much less, according to the Federal Book, than the ordinary mean net well worth of all American households in 2007. Let me expand on among my observations.


My price quote based on the financiers' copyright applications submitted 2 years after the first financial investment-- these are the solid ones that stay and are approved. This is 2009-- was that they had regarding $191 million validated-- that is my estimate. USCIS does not offer the kind of information that we could make use of on this.


So for each $100 of enhanced international investment that year, the EB program contributed one penny. Under a much more unsteady statistical base, the first applications of potential immigrant investors, USCIS is informing reporters that the degree of investment in the just-concluded year had to do with $1.2 billion. Allow us accept that.

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Thanks for listening to me. I anticipate your remarks and inquiries. [The prepared statement of David North shows up as an entry for the document.] 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 company's migration practice group.




Divine functioned as Chief Guidance of the United States Citizenship and Migration Providers from July 2004 till November 2006, the year in which he was Acting Director, and then Acting Deputy Supervisor. He has actually functioned extensively with the EB-5 program secretive technique. He was chosen, as I recognize, vice head of state of the Organization to Invest in USA, the national sector association of local centers.


STATEMENT OF ROBERT C. DIVINE, ATTORNEY, BAKER, DONELSON, BEARMAN, CALDWELL, AND BERKOWITZ, P.C., CHATTANOOGA, TENNESSEE, AND VICE HEAD OF website STATE, INVEST IN THE U.S.A. (IIUSA) Mr. Divine. Thank you, Mr. Chairman, Legislator Grassley, and others.


At the majority of, if all 10,000 ports were utilized, it would certainly be 1 percent of the migration every year to the USA. It is not near that yet, but it is expanding and obtaining toward that. Specifically as USCIS, the company that supervises the program, has actually been making the guidelines clearer and the procedures much more sensible and clear for individuals who are arranging investments and for the capitalists that are investing, more people have wanted and able to place effort and cash right into the process to discover good tasks and develop them, and after that more investors have wanted to invest their cash and take the danger and use the cash to create the jobs that is the point of the program.

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These projects do not wait about for life, and USCIS recognizes that and are trying to speed the program, speed up the process - EB5 Regional Center Program. That does not indicate that they are relaxing their scrutiny, and, as a matter of fact, they are prepared to refute applications that are not qualifying. And they do so, as was mentioned


The regional facility component of the program is not. It is part of an appropriations expense that was established in 1992, and ever since that program has actually been extended 5 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 day of expiry in September.


The procedure takes a great while to develop a task and afterwards to get the financiers accepted. And they do not want their cash flowing with till they have actually been approved. And the specter of the expiration of this Regional Center Program in September is currently preventing the advancement of projects.

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I wish to clarify that the Regional Center Program is not the exact same as the half-million-dollar point. The idea of half a million or a million is a function of the regular EB-5 regulation that belongs to the code. It just is a truth that a lot of the regional facilities that are merging financial investments have actually established those in places of high joblessness or in country areas where half- million-dollar investments are allowed, and that makes good sense.