An EB-5 Success Story, Turkish Charter Schools Zapped, and the Samoan Amnesty

By David North on September 23, 2014

Today we have a menu of migration miscellany: an honest-to-God, if anonymous, EB-5 success story; some more negative news about those H-1B-program-abusing Turkish charter high schools; and the latest word on American Samoa's non-DHS amnesty.

EB-5. The EB-5 (immigrant investor) program offers aliens who invest $500,000 in a Department of Homeland Security-blessed, if not guaranteed, project designed to produce 10 American jobs a set of green cards for the whole family if all goes well. Both Chinese millionaires and the Obama administration love the program, despite its multitudinous warts.

These are routinely real estate ventures, but not always the best of the breed, or as Fortune's Peter Elkind put it in a recent cover story:

But because the EB-5 industry is virtually unregulated, it has become a magnet for amateurs, pipe-dreamers, and charlatans, who see it as an easy way to score funding for ventures that banks would never touch.

I have been following the program for years and have long been looking for a particular kind of EB-5 success story, one in which the alien gets all his money back. It is a modest request. I am not seeking an account of the start of a fabulous business or of the alien doubling his money in, say, 10 years, just the repayment of the capital. I raised this hope in a blog again just last month.

And while I have not found a specific story like that, I did learn (from an old Internet item) that such a story may exist. EB-5 Center, a website and service organization dealing with this program, ventured a guess as to the number of regional centers (the EB-5 middleman organizations) with a "track record of multiple EB-5 projects from which EB-5 investors have been able to recoup their original investment amounts".

Their best guess? "one or two".

The EB-5 Center, however, said it would not name any names, so I am still looking. That an entity that generally promotes the EB-5 trade would publish such a report is both intriguing and, I must say, a credit to the organization.

The Turkish Schools. This string of charter high schools, part of a network of entities revolving around a prominent Muslim cleric, Fethullah Gulen, now in residence in Pennsylvania, is organized by people of Turkish descent and got some well-deserved bad press this summer, notably in Ohio. As we have pointed out in the past, these schools — all supported by local and federal tax funds — have abused the H-1B program by bringing in teachers from Turkey to displace U.S. teachers. Their pitch is that they are good at teaching math and science.

Here's a sample of the reporting in the Akron Beacon Journal on their operations:

A chain of 19 publicly funded Ohio charter schools, founded by Turkish immigrants, is taking the position that the United States lacks a qualified pool of math and science teachers and is importing perhaps hundreds of Turks to fill the void. ... In addition, the [schools] are related through membership, fundraisers, and political giving to the non-profit Niagara Foundation, which provides trips to Turkey for state, local, and federal lawmakers.

What the Beacon Journal noticed in Ohio has been reported in many other states; both the displacement of U.S. teachers and the highly questionable financial relations with some politicians. Too many newspapers have ignored these troublesome charter schools, so the Beacon Journal is to be commended for letting investigative reporter Doug Livingston have enough time to report in depth on this matter.

A few days after Livingston's series went to press, the Ohio State Board of Education started an investigation of the same set of schools on a different set of issues: "sweeping allegations of test cheating, attendance tampering, improper sexual conduct, and other misdeeds", according to the Columbus Dispatch.

Unfortunately the Gulen network is quite skilled in wiggling out of such situations, and the press rarely pays much continuing attention.

That Samoan Amnesty. Speaking of under-reported aspects of the immigration policy, let's conclude with a note about the recently enacted amnesty for illegal aliens in American Samoa. Immigration policy in America's only south-of-the-Equator possession is left in the hands of the local government, a legacy from the old days when such decisions were made by the U.S. Navy captain in charge, so DHS has no role there.

Because American Samoa is subsidized by Washington, as neighboring independent country of Samoa (once Western Samoa) is not, those Samoans frequently show up illegally and in relatively large numbers in our Samoa, as we mentioned in an earlier blog.

The latest Samoa News report on this legalization program said that 4,111 people would benefit from the program, mostly former residents of Samoa. But within this total there were also seven people from Romania, perhaps a family.

Why would people from that country stay in American Samoa as illegal aliens when they could settle anywhere in the European Union as legal residents? Why migrate from a poor country like Romania (per capita income in 2013: $14,400) to a much poorer one (with a per capita income of just $8,000 in 2007, according to the CIA's World Factbook)? And why settle in a location about 2,000 miles from where anyone else might speak your language? I figure there might be someone in Auckland or Honolulu who speaks Romanian, but no one any closer.

Maybe these seven Romanians are honest, retired farmers, who seek the tropical sun, or maybe they are retired drug dealers whose goal is to avoid the cops.

Whatever moves them, their presence in Pago Pago would seem to indicate, despite what my colleagues and I assume most of the time, that not all migration is motivated by economics.