Biden's Lawyers Defend Trump Modifications of the EB-5 Rules

By David North on April 6, 2021

While the Biden administration is reversing many Trump immigration policies, as my colleagues keep reporting, there are exceptions, particularly when it comes to issues in the U.S. courts.

We have noticed at least four instances in which Biden administration lawyers have asked the courts to uphold policy decisions made during the Trump era; the most recent deals with revisions to the EB-5 regulations published in November 2019.

Those regulations had an interesting history; they were first proposed by the Obama administration at the end of its second term in office; they were then largely adopted by the Trump administration; and now a middleman user of the program has attacked them in the federal courts in California, according to industry website

The EB-5 program allows otherwise ineligible aliens to obtain a family-sized set of green cards if the alien invests in a Homeland Security-approved, but not guaranteed, financial project, usually an urban real estate deal. For years the program demanded only a $500,000 investment, and allowed the “targeted employment area” for the investment to be gerrymandered to meet the sponsors’ needs. Often the investments were made in highly prosperous areas that were connected on paper to distant census tracts where there was high unemployment, so as to yield an average unemployment rate high enough to qualify for the program.

The new rules, after a period of 25 years, lifted the minimum investment to $900,000 and made it less likely that the economic gerrymandering just described would be possible. The new arrangements, together with Covid-19, have diminished interest in the program by a large margin, as we noted earlier.

With all this in mind, an EB-5 middleman entity, Behring Regional Center, which operates in the Bay Area in California, sued to remove the reforms. The emphasis of the suit seems to this non-lawyer to be not on the substance of the changes, but the fact that former Homeland Security Secretary Kevin McAleenan, who held office at the time the new regulations were published, was an acting official who was not allowed to take that action.

The article goes on to say:

The U.S. Department of Justice said that the “de facto officer doctrine” established in the Supreme Court’s 144-year-old Phillips v. Payne ruling should keep McAleenan’s EB-5 rules in place even if he was invalidly appointed.

The article also reported that “A federal judge has indicated that she may reverse Trump-era changes to the immigrant investor program.”

The judge in question is not a presidential appointee. Jacqueline Scott Corley is a U.S. magistrate judge, a civil servant, presumably acting for a federal district court judge. It will be interesting to see if a civil servant can overturn the work of the three administrations, while ignoring an 1877 Supreme Court ruling. I would assume that any decision she makes will be reviewed by the district court judge to whom she is assigned.

The other three instances in which Biden administration lawyers seem to be riding to the rescue of Trump decisions, are these:

We will follow the EB-5 case as it develops.