USCIS Promises NOT to Correct Previous EB-5 Mistakes

By David North on May 14, 2012

USCIS promised last week not to correct prior errors if they produce more visas in this program. It did not say so in so many words, of course. The promise relates to a particular — and peculiar — economic scenario in the EB-5 immigrant investor program and was described in elegant legalese.

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It is just another of those small-scale but significant decisions that the administration makes all the time to ensure that more visas are produced for more migrants.

In this case, it relates to whether or not an alien investor who could not secure admission to the United States as an immigrant in any other way can get a set of green cards for himself and his family by making a specific kind of passive half-million-dollar investment.

All EB-5 investments are supposed to produce 10 full-time jobs, directly or indirectly. One controversial scenario allegedly leading to the 10 jobs is the so-called "tenant occupancy methodology". It is based on the remarkable premise that if you build a structure for half a million dollars and some company moves in with 10 workers, you can claim that you created the 10 jobs by building the edifice.

Apparently a number of applications for green cards have been filed using this approach, and some of them must have been rejected because USCIS felt it necessary to call a "stakeholders' meeting" on the subject, which I attended and described in an earlier blog.

Since there is a series of different USCIS steps in this process, the principal pitch of the lawyers in the meeting was a request/demand that the agency be consistent — that if it had approved the tenant-occupancy methodology in an earlier proposal, it should be approved in subsequent ones. In other words, there should be no second set of eyes looking at once-approved petitions, no matter how questionable they might be.

I thought that a conversation about the tenant-occupancy methodology would be just that. I expected that the agency would present some examples of the methodology that work (explaining how merely building could create a tenant occupancy that created 10 jobs), and also present some that do not work.

The only segment of the meeting that met that expectations came from the Director, who, in almost a throw-away sentence, said that simply erecting a building that housed 10 jobs — when the jobs were already in existence and had been housed previously in another nearby structure — would not count.

He stressed, without defining it further, that decisions about this methodology were always "very fact-specific", without discussing any facts or hypothetical situations.

Most of the conversation was about procedures and precedents and a pitch that previous (by definition, favorable) decisions be given "deference" when follow-on decisions needed to be made. In other words, if you have said "yes" once, don't think about it again.

The May 8 USCIS Operational Guidance cited above gave the developers and their lawyers exactly what they wanted:

Consistent with our deference policy, [staff decision-makers] should rely on a previous determination that the economic methodology is reasonable when the methodology is presented to us in a later proceeding based on materially the same facts.

Nowhere in the document is there any discussion about "deferring" to previous negative decisions, just positive ones.

If the facts change, however, it is supposed to be a new ball game.

This is the latest of a series of moves taken by USCIS to promote the EB-5 program, and to press the staff to say "yes" more often to the various applications. CIS recently published a Backgrounder on the whole program.