It looks like it has become a pattern: An executive gets involved with the EB-5 program and is subsequently charged with a variety of abuses. The latest such story has emerged from within Michigan's state government.
According to the Detroit Free Press, the state's chief internal auditor reported that the state's EB-5 office (part of the Michigan State Housing Development Authority) and a sister agency issued seven contracts that were marked by "a lack of competitive bidding, inflated charges, and invoices that were paid twice."
The director of housing and the EB-5 program, Scott Woosley, was forced out of office last year following other charges of extravagance and waste. For instance, the Lansing News reported the following under the heading "Escargot and a stretch limo; 5 expenses that landed Michigan housing director in hot water":
Woosley, Michigan EB-5 Director Joe Bergstrom [who reported to Woosley], and Detroit Loan Mod CEO Moose Sheib made at least two trips to the Middle East ... to recruit foreign investors. ... Woosley stayed at the Ibis Hotel in Dubai for $540 a night. He submitted a $1,171 receipt for a three-person dinner at the Ritz's Strata restaurant.
The stretch limo hiring, a 70-mile trip for $1,252.99, took place in Nebraska. The escargot was consumed, and charged to the state, at a dinner for Woosley and three staff members at an upscale Park Avenue (N.Y.) restaurant. Neither of these expenditures, unlike the ones in the Middle East, were linked in the report to EB-5, but were funded by the state's taxpayers.
Michigan, like Vermont and South Dakota before it, secured an EB-5 regional center license from USCIS so that it could play the middleman between foreign investors and projects in their states. I raised an eyebrow at the time when I noticed that the press release on the creation of the Michigan center said that Vermont was the only other state with a regional center – when clearly the highly controversial regional center in South Dakota was also a state agency, as I reported earlier.
The Vermont state agency has remained out of trouble, though its major investment, in a ski resort in the most northern part of the state, is said to be having state government-recognized financial problems symbolized by the absence of state officials at Jay Peak's last ground-breaking ceremony. The problems at Jay Peak, the ski resort, have been described in detail by a local alternative newspaper, the VTDigger.
The Michigan State EB-5 program's website still carries Woosley's photograph, and that may indicate that the program is not very active. I do not recall it proclaiming the funding of any projects, but may have missed something.