EB5 Investors Magazine Volume 2 Issue 1 | Page 24

The Tug of War Between the Hill and the Agency A Review of the OIG Report and the Potential Impact on the EB-5 Regional Center Program by Laura Foote Reiff The Office of the Inspector General (OIG) for the Department of Homeland Security recently released a long-awaited report analyzing the United States Citizenship and Immigration Services’s administration of the EB-5 Regional Center program1. Although dated Dec. 12, 2013, lawmakers received a copy of the report during the week of former USCIS Director Alejandro Mayorkas’s confirmation as deputy secretary of the Department of Homeland Security, which took place on Dec. 20. The release of the report was yet another controversy in a contentious confirmation process that has scrutinized Mayorkas for evidence of favoritism and misuse of the EB-5 program, for which he is the subject of a separate, ongoing Inspector General investigation. In light of these allegations and Republican opposition, Mayorkas’s confirmation would have proved much more difficult if the Senate Majority Leader had not invoked the “nuclear option” in November 2013, rendering more difficult the ability to block certain nominations through confirmation process. The Dec. 12 audit, although expected by some to be a harsher rebuke of Mayorkas, looks at the EB-5 Regional Center program holistically and contains four specific recommendations, of which USCIS concurred with three. http://www.oig.dhs.gov/assets/Mgmt/2014/OIG_14-19_Dec13.pdf Trust but Verify: A Legislative Perspective on the EB-5 Regional Center Program Based On Current Legislative Proposals and Judiciary Committee Action, By: Laura Foote Reiff – Greenberg Traurig, LLP. The Fall 2013 issue of this magazine published an article looking ahead to legislation and policy changes anticipated in the EB-5 program2. The OIG report contemplated many of the predictions found in that analysis, through regulation, guidance, and legislation. The newly released OIG report makes four specific recommendations: The first recommendation calls upon USCIS to update and clarify existing regulations to better reflect USCIS’s role in verifying and overseeing the program by giving the agency the power to deny or terminate regional centers on the basis of fraud or national security concerns, and to verify that funds invested went to companies creating U.S. jobs. Additionally, such regulations would ensure that the agency is applying EB-5 requirements consistently to all cases. The second recommendation asks USCIS to make connections with the Departments of Labor and Commerce, and the SEC to “develop memoranda of understanding” to share best practices when adjudicating EB-5 applications and petitions. The third recommendation asks USCIS to measure the program’s outcomes by determining “how EB-5 funds have actually stimulated growth in the U.S. economy,” working in concert with other agencies, if necessary. The fourth and final recommendation encourages USCIS to take steps to ensure the quality and integrity of the program and to scrutinize regional centers’ compliance with CFR requirements. 1 2 22 Laura Foote Reiff E B 5 I n v e s to r s M ag a z i n e USCIS issued a response to the report stating their commiseration with three of the above recommendations, agreeing to update regulations, build interagency collaboration, and establish quality