An analysis of two years' worth of approvals and denials for two different forms in the immigrant investor (EB-5) program shows some odd trends when the results in the last five fiscal year quarters of the Obama era are compared with those of the first three quarters of the Trump administration.
The data deals with the forms filed by thousands of individual aliens seeking EB-5 status, and the much smaller total (in the hundreds) of those filed by U.S. business people wanting to set up the middleman entities in the EB-5 program, the regional centers. The regional centers, almost always for-profit entities, take funds from would-be alien investors and then re-invest them in U.S. commercial activities, mostly downtown real estate developments. The alien family then gets green cards for everyone in the family under 21.
In general terms, the Trump administration has been portrayed as gung-ho for U.S. business, and less than enthusiastic about immigration. So one might expect that in the Trump era it would be harder for individual aliens to obtain investment visas, and easier for the Chamber of Commerce types to get the regional center licenses.
In fact the exact opposite is true.
Comparing the Obama-era period to the Trump period, denials of individual alien applications fell by about half, from 15.3 percent to 7.9 percent, while the percentage of denials for regional center applications soared from 21.2 percent to 38.7 percent, as the table below indicates. I was surprised by the decline in denials in the individual category, but not by the increase in regional center denials, given the frequent scandals related to these entities. For a map on the widespread corruption in the program, see here.
EB-5 Approval/Denial Trends: Last Five Quarters of Obama and First Three of Trump
|Immigrant Investor (Form I-526)
||Regional Center (Form I-924)
|Q1 FY 16||1,257||372||1,629||48||D*||50|
|Q2 FY 16||1,864||637||2,501||57||13||70|
|Q3 FY 16||1,660||433||2,093||81||30||111|
|Q4 FY 16||2,851||293||3,144||79||21||100|
|Q1 FY 17||3,243||228||3,471||65||23||88|
|Q2 FY 17||2,816||199||3,015||85||28||113|
|Q3 FY 17||2,386||278||2,664||76||66||142|
|Q4 FY 17||2,876||217||3,093||83||60||143|
Source: CIS calculations based on USCIS statistical data, "Number of Service-wide forms by fiscal year" for FYs 2016 and 2017.
Let's think about this data from the proverbial altitude of 50,000 feet.
A mistake on a single regional center's application, in the past, has meant as much as $120 million in losses and many individuals and innocent companies hurt in one way or the other. The scandals in South Dakota and Vermont have proved this.
A mistake on an alien EB-5 application might mean that half a million in potential investments isn't available for a project; similarly, it might mean that a not fully qualified investor family is admitted, postponing the admission of a different, fully qualified investor family.
A mistake in a regional center decision would add to the number of these centers as there is no congressional ceiling on them.
A mistake on an individual alien's application would not increase the number of aliens being admitted as there is a statutory ceiling of about 10,000 visas a year.
In other words, it is much more important that the Department of Homeland Security get the regional center decisions right than the individual alien ones, and this seems to be what is happening.
Looking at the table again, the increasingly careful screening of the regional center petitions is obvious; there were only one or two denials of I-924 decisions in the first of the fiscal year quarters shown in the table for the Obama years. In contrast, in the last quarter for which we have data — July through September, 2017, there were 60 denials.
We are just dealing with numbers here. Perhaps the petitions in the Obama years were much better than in the Trump period. It is highly unlikely, however, that they were 30 times as good (two denials vs. 60 of them). So both the standards being used, and the rigor of the analysis, must have changed, and, I would argue, for the better.
I remain puzzled by the declining rate of denials among the individual alien applications; perhaps as more data becomes available the difference between the Obama-era denial rate of 15.3 percent and that of the Trump period, 7.9 percent, will lessen. The data we present here, after all, covers only the first nine months of the Trump administration, a period in which there were very few political appointees active in USCIS generally.